Un-cooperative Tenants

18 Replies

So I have this house that I am trying to wholesale. ARV is $150,000 and I am selling for $105,000. It is being rented for $1300 a month and needs little repairs (paint, flooring) about $7,000 -$10,000 in repairs, if that. The tenants are adament about staying there and paying rent. The Seller says the tenants have a perfect tract record of paying rent. I let them know that this type of house will attract alot of first time homebuyers and can make no guarantee they would be able to stay in the house. The past month I have lost alot of buyers and offers because they refuse to let the buyers see the inside of the house. They slam the doors in our face or will not show up to the house to let us in? Can someone please explain how I should go about this situation.

Forgot to mention the owner of the house is an elderly lady who is currently going through alot of back surgeries and cannot deal with the added stress of a rental property and cannot physically go to the house to show it.

Is it a month to month?  If so, you could give the tenants a notice to leave (# of days is based on your state laws) and let them know that it's because a vacant house is easier to show.  If they had cooperated you would not have had to do that.

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

It is not a month to month but their lease is up in September, I was trying to be nice and respectful but it is costing me valuable time I dont have. Is there another route I could take? And thanks for the reply!

Maybe you should post this in the wholesalers forum (if there is such a thing) here, or whichever one is more relevant.  Also, the title of your post would not attract the type of person who could help you.  Maybe you should retitle, "trying to wholesale house and tenants are not cooperating."  If you are trying to wholesale, I assume that means you do not own it, so the lady who still owns it would need to be the one taking action to get the tenants to either cooperate or move out.  You have no legal hold on the home.

Is it up 9/1 or 9/30? I would provide them the required notice to vacate and plan on showing after they have left. It sounds like a deal on paper so you shouldn't have any trouble selling, and she ( the elderly woman) will collect another month of rent besides.

What does the lease say?  Mine has provisions for showing the property.

Get the key from the owner, follow your municipalities rules for advanced warning to tenants, usually 24 to 48 hrs, then go in but politely and simple inform them of these ' rules' and ' rights' & permission from current owner.

@Robert Martinez

What ever you come up with I strongly recommend you proceed with caution. Not being on tile or an agent those tenants can get you in a complicated situation.

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Thanks for all the feedback guys. @Kelly B.  where would I get that information from? And would I need to show a copy of the lease agreement to the tenants @Amy E.

Robert, go to your municipalities website, they should have renter/landlord rules listed and it is usually also spelled out in most leases which they should have a copy of but, with the owners help, you could give them a highlighted copy of it.

Interesting situation.  Heres what I would do. 1. I would get a copy of their lease agreement from the seller.  2. Read it for provisions regarding showing the property.  If it works in my favor, I'd give the tenants a copy.  Id leave my card so they could call me.  Im not in the situation so i cant assess how hostile they could become for a face-to-face.  Id avoid that for now.   3.  I'd call my attorney.  If I didnt have one, id find one online, in my area and get a free 20-30 minute  consulation (some do that).  You'll get your legal answer and probably your best options in that conversation.  4.  If all that fails, then I'd pay them to move and help them relocate, if it was cheaper than having them stay and use up the remainder of their lease.

Sure man.  Good "luck" to ya!  Keep us in the loop on how this unfolds.  Im interested.

Robert Martinez Re-negotiate the price with the owner using the information you described. Get the deal under 100k and sweeten the pot for the buyer. Everyday I'm trying to create more value in real estate and relationships. Frank

@Account Closed described.  The big issue is whether or not you are acting for the seller and what do you need, legally, to do that.  They are within their rights to slam the door in YOUR face, but probably not in the Seller's depending on how their lease is written.  If the Seller wants to show the house, she needs to abide by whatever terms the lease says to do so (mine says 24 hours written notice and that I do not have to wait for the tenant to be there, this is legal in my state, some states may have provisions about entering a tenants home without them there, not sure).

@Account Closed   There's some bad advice given to you in this thread so I'd be careful how you proceed.  You mention you're trying to wholesale this house, so I'm going to assume that means you're trying to find a buyer to assign the contract to (as opposed to actually taking ownership and then reselling to the end buyer).

If that's the case, you cannot "give the tenants notice to leave/vacate" as it has been suggested.  You don't own the property and you're not a party to the lease agreement, and (if you're just assigning the contract) you never will be the owner or party to the lease agreement.  So you can't legally give notice of anything. 

It was also suggested that you "pay them to move and help them relocate".  Really?  A wholesaler is going to pay someone else's tenant to move?  If I was the homeowner, we would have a big problem if you paid my tenants to move out.  What if you can't find a buyer and the deal falls through?  You just paid this elderly lady's tenants - who had "a perfect track record of paying rent" - to leave, and she could end up stuck with no buyer and no tenants. 

I'm not saying you would actually do any of these things, but I thought I'd point out the inherent dangers in the suggestions.

As for what you could do in this situation, I would suggest marketing the house to investors as opposed to "first time home buyers", for several reasons.  First, there's already tenants in place who, as you stated, have a perfect track record of paying rent and want to stay.  This could be very desirable to an investor who plans to rent the house out anyway.  On the other hand, most first time home buyers will not want to deal with a tenant-occupied property if their plan is to live in the house themselves. 

Speaking of first time home buyers who intend to live in the house, most will be using bank financing.  A bank may not be okay with your assignment fee.  On top of that, the bank likely won't use you're $105k price as the sales price for qualifying the buyer's for a loan.  They'll use whatever sales price is listed in your contract with the seller (i.e. $105k minus your fee).  If that price is only $90k, for example, then your first time home buyers may have trouble coming up with the different because they won't be able to get financing on your assignment fee.   (One of the reasons most wholesalers look for cash buyers.)     

Ultimately, if the tenants aren't going to cooperate, then there's not a lot you (as the wholesaler) can do to force them to (even if it's in the lease), and it doesn't sound like the current elderly owner is in a position to get involved. 

So start by marketing this to your investors/cash buyers and see if one of them is looking for a tenant-occupied property.  Short of that, you may have to renegotiate with the owner on the sales price to something lower (or lower your assignment fee if that's possible) to account for the extra time/expense it will take for the end buyer to remove the tenants (i.e. do an eviction). 

Best of luck to you with whatever route you choose. 

@Account Closed

I agree with Kyle that you have been given some questionable advice.  You have absolutely zero standing to demand anything from the tenants much less give them any kind of notice.  The owner is the only person with standing to handle any of this

You are also not going to be able to assign the contract to a first time buyer unless it is a cash buyer which we all know if very rare

I would the owner give the tenants notice to vacate at the end of the lease and ramp up my marketing at that point

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