Demanding Rental History from Seller?

Question

Hey, Total Newb question but is it possible, when buying an occupied apartment building, to demand a history of tenant rent payment?

Furthermore, if there is a trouble tenant can you put an offer in contingent on seller initiated eviction of said tenant?

Jay Hinrichs · Answer

looking at the financials and tax returns are SOP when buying existing multi family at least on the deals I have brokered..

Ben Smith · Answer

Thanks for the great replies guys!

Tom T. · Answer

Hi @Ben Smith I agree with @Jeffrey H. on the financial end.A question you can ask that will give you some insight is "How much revenue do you collect in late fees over the course of the year?"  You will also want to get any insight you can on maintenance costs and weather or not the previous landlord has been doing good maintenance or just enough to get by? (Is the place looking spiffy or more run down, barely hanging to minimum standards?)Regarding trouble tenants: I would strongly suggest you make yourself familiar with eviction processes in the county which you are looking to invest in. Some counties are investor (landlord) friendly and some are not. I doubt the seller would be highly motivated to do that "dirty work" and offer you  a smokin deal on his place at the same time...  but, it is possible...  You need to know the rules though. Sooner or later you will have to evict someone probably. It's just part of the game. From my experience it's about a  20-45 day turn around (and that is pretty quick). I have heard other places that take 60-90 days for the process to take place...

Good luck!

Jeffrey H. · Answer

You need to get the Seller's financials if you plan to have the deal financed.  The tax statements will give you an indication of the revenue, which will imply occupancy and collections.

I include something in the contract that the Seller will provide reasonable documentation to support financing of the deal and that is a contingency to close.