When I'm wholesaling a house that has tenants what are some obstacles/solutions I should be aware of? Specifically, what if the tenants have 6 months left on a lease and my end buyer is a rehabber who wants to gut the property?
Cash for keys is always a good motivator for tenants.
Last one I did like this resulted in the tenants calling me everyday for a month. Fun. The best solution is to be honest with your end buyer and the tenants (especially if they have kids). Let them know to begin looking for alternative places to live.
Thanks for responses.
Do the tenants have the ultimate leverage here?
Does the change of ownership affect the lease?
Tenants rights are a big thing, they have the leverage as change of ownership does not affect the lease terms.
Your buyer is going to have to wait 6 months before starting work. Which means you probably don't have a buyer.
So you need to pay off the tenants. Do not expect it to be cheap. They hold ALL of the leverage.
Wholesalers are always claiming that wholesaling is about relationships, right? Well in the situation you have outlined, the most important relationship you can build is with the tenants.
Try the cash for keys angle and if that doesn't work, either you or the rehabber will have to wait. But at least you'll be getting rent the whole time.
I would assist them in finding another place and offer to help them move knowing how stressful that can be. You can also offer to pay first month rent to where they move.
Just some suggestions
Great info, thx
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