Real Estate Deal Analysis & Advice

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Toula McGinley
  • Seminole, FL
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requesting advice on how to proceed non paying tenants

Toula McGinley
  • Seminole, FL
Posted Sep 14 2015, 19:09

Hello,

We just purchased a duplex from an auction. Everything has gone smoothly so far. The closing was fast and seamless. We bought the duplex knowing they were tenants that have not been paying. One unit is occupied by a couple. When the property went in foreclosure they moved their adult daughter, her two children and her boyfriend in the other unit. They have not paid rent and also the water bill in months. 

We met the tenants and introduced ourselves as the new owners. We offered them a lease (they kept the place in good shape and it only needs minor repairs). We offered them a month to month lease (50 dollars a month more than they were paying with the previous owner and catching up on the water bill) plus a security deposit contingent upon meeting our criteria: clean background check and showing proof of income).The daughter said she could not afford it because she just got a job. The father said he would think about it and give us an answer the next day. Today is the next day and he did not call.

We told them that if they decided that they could not stay they will have 10 days to vacate the premises. (neither one of them had leases at this point). 

We are thinking if we don't hear from them by tomorrow to start the eviction process as they may just be dragging their feet to buy more time. I have contacted a company called Evictions Plus and they said they could start the process.

If anyone has any input on this or has gone through this before please advice. 

Thank you

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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
ModeratorReplied Sep 14 2015, 19:18

Wow. We must have vastly different ideas of "smooth and seamless" :D  - I can't envision purchasing a duplex full of deadbeats unless I was getting it for almost free. 

I can't believe they didn't jump at your offer of higher rent and catching up on the water bill!

If it were me I would just go straight forward with evicting and starting over. 

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Account Closed
  • Real Estate Agent
  • Las Vegas, NV
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Account Closed
  • Real Estate Agent
  • Las Vegas, NV
Replied Sep 14 2015, 19:37

hire an attorney and evict immediately Don not wait. To you have security deposits from the tenants

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Joel Owens
  • Real Estate Broker
  • Canton, GA
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Joel Owens
  • Real Estate Broker
  • Canton, GA
ModeratorReplied Sep 14 2015, 19:40

So they are a holdover tenant then with no lease because they were foreclosed on. They moved the daughter in to the other unit.

Even if they produce a lease it is a biased lease from the previous owner. Those get thrown out by courts as unenforceable most of the time.

If their credit is trashed then likely banks generally pay cash for keys so they move out. In your case you are the new owner and it sounds like they do not like your proposal. Remember if they were foreclosed on then probably have just enough money to get by. That means no deposit, moving expenses, first and last months rent to move to the new place.

At this point I would be very surprised if they move voluntarily. They probably want thousands to move to get into the next place. If not they will milk free rent and try to delay eviction or wait until the last second to move.

Either way you are going to be out some money on this one eventually. Banks give a slightly better deal and buyers bite. When there are holdover tenants the discount can't be 10% of a normal foreclosure price but more like 50% off when you factor in lost rent, damage to the unit, and evicting holdover tenants. They might get angry and damage the unit, pore concrete down the drains etc. You just do not know what is going to happen.

I hope you didn't overpay for this thinking you have a deal.

No legal advice given.     

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Toula McGinley
  • Seminole, FL
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Toula McGinley
  • Seminole, FL
Replied Sep 14 2015, 19:55

Thank you JD, Joel and Steven for your replies. There is a common pattern in your responses and I think I am hearing you loud and clear. Start the eviction process. 

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David Dachtera
  • Rental Property Investor
  • Yorkville, IL
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David Dachtera
  • Rental Property Investor
  • Yorkville, IL
Replied Sep 14 2015, 19:55

I'll agree with the posters who say get qualified legal assistance and pursue your options through the courts, or whatever the eviction process is in the property's area.

You've already done the "be nice" thing. Now, it's time to not be nice and do your duty as a property owner: protect YOUR rights!