We are in the process of buying a duplex in an area that is in an area that is "up and coming". Unfortunately we have some big costs associated with getting the place up to code and safe for tenants on one of the sides (30-50K). One side is vacant and is very clean and almost ready for a renter. The other side has a section 8 tenant and this side had a + meth test (level around 2-3).
We have asked the current owner to give the tenant in the occupied unit 30 day notice once we clear the financing since she is on a month to month lease. We will then close 4 days later. We are a little concerned about running into problems with this tenant as it looks like the person on the lease is not actually the person in the unit as well as the + drug use that may or may not be going on in the unit. There also seems to be an additional man in the unit that is not on the lease.
Has anyone had similar situations and how did you handle it? Any things that we should watch out for? Would love any advice other investors have had with + meth tests and removing tenants.
Also, any ideas on how we make sure we get the rent for the remaining month since she really has no obligation to pay us (but does to the current owner) since we did not sign a lease with her?
You have no guarantee of that tenant leaving until she's gone, even if current owner gives her notice to vacate.. I'd do PA with terms the unit will be delivered vacant..at closing.
The rent is the last of your worries.. but if you foolishly decide to accept this tenant,, the notice to vacate would be basically null and void once that owner walks,, the day you close, unless she's gone. you'd have to give her proper notice all over again . Your closing docs of Assumption and Assignment of Lease(s) is what is required, rent roll, copy of lease, and amount of security deposit..
The lease would be binding and would transfer over to you as of date of ownership,, you would have to then give her proper notice of non-renewal for her to vacate.
Meth remediation is a huge issue,, and I'd talk with a professional before you think you can handle the remediation yourself..
Thanks for your advice Deanna. I agree with you and like your idea of having an agreement that the tenant be out before closing. Not sure if that is going to be an issue but doesn't hurt to ask. Also we would definitely have a Meth remediation company deal with that issue. We have no plans to deal with that ourselves.
Thanks for your thoughts!