Buying A Property Occupied With a NonPaying Tenant?

Question

I wanted to get the community's opinions on buying a property when the current landlord has already let it be known that they are selling because of a nonpaying tenant?

Johann Jells · Answer

Just as all tenants are not created equal, neither are all landlords.  You can sometimes get a bargain by taking on what others would not. I have a nicely cashflowing property that was full of scummy tenants and had an immense fuel bill. I was able to solve those problems.

Ashley Davis · Answer

Hi! I just closed on a tenant occupied REO so I just asked a bunch of investors the same question. Luckily for me, the tenant moved out without a hassle... BUT I was prepared for the worst! I was researching eviction/laws. Which obviously vary. So be sure to read up on that.

And factor in zero revenue for a couple months while you are dealing with the eviction. The eviction itself is little $ but the time getting the tenant out is what can hurt your deal.

Hope this helps!! Good luck!

Jim K. · Answer

Account Closed

I would do it for a local property. I know the eviction laws of my area well and getting rid of the nonpaying tenant would take an amount of time and money that I can estimate accurately. But to the former landlord, you are buying his headache. Make him pay for his treatment -- drive the price down as hard as you can.

One of the key things that you need to make sure you do in this situation is do as much as you can to minimize the probability that the tenant doesn't damage the property significantly just before they are carried kicking and screaming over the threshold. Unless you have a plan to deal with that, you really shouldn't buy this place.

Michael Gefvert · Answer

Factor the cost of removing the nonpaying tenant and any associated carrying costs into the purchase price

Buying A Property Occupied With a NonPaying Tenant?

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