Buying a Fourplex with existing Tenants; Realtor is Useless

Buying a Fourplex with existing Tenants; Realtor is Useless

Investor · Bronx, NY · Member since 2015 · 24 posts · 10 votes

Buying a Fourplex with existing Tenants

HELP ME PLEASE

I have been trying to gather information on a fourplex for several weeks. My realtor seems less than enthusiastic about the property and its location and it being a short sale. There was little to no information listed on the property and for some reason I expected my realtor would put something together for me. NOPE. Big Mistake. If I want this process to go faster I’ll need to do this on my own. Which I am fine with. Good learning experience. The property is being managed by a PM whose contact information I received while viewing one of the units.

I mentioned to my realtor that I wanted all the information she could find on the property including financial history from the PM; she said she would look into it. After some pressure my realtor sent me a text saying that there were washer and dryer connections in each unit, and forwarded me an email from the listing agent which listed the rent roll and agent notes.

In summary; 3 out of the 4 tenants are on a month to month lease paying and pays $385; all the tenants have been there for over a year. One receives a 65/month discount because they maintain the yard. Owner passed away, wife is just finding out about the property.

There were no attachments and no documents to support the information in the email. Very disappointing. For some reason I expected more guidance, more professionalism, more concrete information. At this point I feel like I have no use for her.

I understand that during the purchasing and negotiation I’ll need a realtor, so I plan to keep her for that, but do I need her for the research? I do not want to overstep my boundaries or create friction, but I cannot keep wasting time. She doesn’t seem to have many answers or perhaps she has bigger fish to fry.

So maybe someone here can help me please

Can I contact the PM company directly and request copies of leases and agreements, income and expenses. How do I find out if tenants are paying rent on time, and if there are any reoccurring maintenance requests? Is there a report that PM’s should have with this information? And when is it ok to ask for all this info, after I put in an offer, hopefully before. Are there additional questions that I should be asking or documents that I should be requesting?

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  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    10y

    You are stepping into a situation that sounds quit difficult to begin with.  You have rent rolls etc. If there is a PM specifically ask your relator to get in touch with the other relator or PM and see what they have in terms of expenses.  Give her a list of what you want.  What are the owner paid utilities etc., even if there are no numbers.    Get the market rents in the area. My guess is you will need to estimate alot.  Anything the owner paid directly you are probably not going to get from the widow, you are not her first priority.   Make an offer based on what you get and an inspection specifying you get copies of leases, etc.   In short, I don't know if your relator is not diligent or maybe what you want is just not readily available.

  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    10y

    For one, the odds of closing a short sale are very low. Sounds like you're already in love with this property.  Don't be.  It should be one of several dozen you have in your hopper to try to buy.  The agent knows you aren't likely to close on this one property.

    Financial information from previous owners and their PM's may or may not be accurate.  If you can get it, fine.  But even if you do you must make your own determination about expenses and income.

    $385 a month is a really low rent property.  Lots of headaches in that price range.  Given those rents, I'd expect you're looking at well under $100K for the purchase price.  Another reason the agent is unenthusiastic.  

  • Investor · Bronx, NY · Member since 2015 · 24 posts · 10 votes
    10y

    @Colleen F.!

    More direct question is my solution; so I appreciate you giving me a few. Thank you. If you think of anymore please feel free to share them.   I'm not sure she bothered to ask the PM very many questions. While looking at the property with the PM she was not very engaged and I didn't want to steal her thunder. I thought that perhaps she was playing hard ball so I followed her lead, and assumed that once I told her that I wanted to proceed she would dive in, but no.  I have a clear understanding of what they mean by investor friendly Realtor. I could use one of those right now. 

  • Investor · Bronx, NY · Member since 2015 · 24 posts · 10 votes
    10y

    Jon Holdman

    If by "in love" do you mean am I seeing dollar signs, Then yes I am. The property is in a C+ class neighborhood. Its transitioning slowly and I believe it has a lot of potential as a buy and hold. The city has been investing a lot in that area. Its not a big market and there are not very many fourplexes. This property is one of two fourplexes on the market. The other one is in a different B neighborhood and gets 450 per unit and they're asking 159,000. I can see why she may not be motivated. So what would you suggest; should I contact the PM directly in order to find out this information? What should I ask them for?

  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    10y

    Just another example of the unprofessionalism of realtors. Most of them only do what is right for their pocket. Drop'em! There are hundreds more.

    In the past I have gotten the name of the owner and contacted them directly. Sometimes they are willing to talk to me and sometimes not. You can get a lot of info from the owner and save lots of time with just one phone call.

    I have often skipped my agent and went to the sellers agent to get info quicker.

    There may not be any info to get. In this case you should offer what makes sense based on worse case senerio.

    With a short sale the seller has to agree to the price before the bank. With the way that short sales work and the recent removal of forgiveness, the saler normally has to pay thousands of dollars in income taxes. So, they are trying to get a higher price. Usually if the seller will accept then you have a better chance of the bank accepting.

    I always put in an offer. 2 months down the road you may get a surprise.

    Hope this helps.

  • Investor · Long Beach, CA · Member since 2012 · 313 posts · 190 votes
    10y

    Dump that useless realtor. find one that specialies in short sales and / or investment property. The Realtor is lazy and doesn't want to wait while the short sale goes through. Get rid of her, find a good agent, in the meantime contact the PM company yourself, they may give you some info.

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