So, I have a 6 unit I am looking to wholesale. 5 units are rented and there are lease agreements - does anything need to be stated in the purchase and sales agreement that these leases are to be honored? or is it assumed? as well, what happens to the security/damage deposits? should that money be added to the sales price and the cash transferred to the new owner?
what is the best way to do this? in fact, it need not be with wholesaling, but any sort of multi-family purchase with existing tenants.
In most instances, in most jurisdictions, existing leases are inherited by the buyer who must honour them. That said, there are some places where the buyer may request part or all of the property to be delivered vacant. If you are working in such a jurisdiction, then you should be prepared for that situation.
Unlike an SFH, the buyer for a multi-unit will - or at lease should - be requesting actual financials for the property (we ask for 3-5 years) and will want to review all the existing leases and then collect estoppels of their own to validate the information provided by the vendor.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!