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if i were buy a 3 Family house with existing tenants already living there, should I be worry at all with them for any reason ? how do I know if they've been paying their rents and good tenants or not ? or is there any chance once I become their new landlord they will stop making payments ? just some silly questions that I'm worry about, or should I not be worry ? can i break their lease if they have one ? or just leave them alone?
You must honor their lease if you buy this property. You can choose not to renew afterwards, but buying the property does NOT cancel out existing leases.
Don't forget to have the previous landlord transfer ALL security deposits to you, as you will now be responsible for it if you are the new owner.
I bought a duplex a few years ago, as a condition of buying, I made it clear that I wanted all tenants out before I took ownership of the property.
It was the right decision, one tenant was behind on rent for several months, the other people smoked like chimneys inside the house.
EDIT: One of my fears prior to buying my duplex, was the current owner would sign a 10-year lease at $1/month with the current tenants, and I'd be stuck with it. All lawyers and real state agents I spoke with told me that's not something to worry about. I guess I'm just paranoid.
I bought a duplex a few years ago, as a condition of buying, I made it clear that I wanted all tenants out before I took ownership of the property.
It was the right decision, one tenant was behind on rent for several months, the other people smoked like chimneys inside the house.
That's what I'm concerned about too, but how did you find out all this before purchasing a home? did you ask the seller if their tenants paying and they honestly tell you they're behind ?
Quote:
Originally Posted by CarlitosBala
EDIT: One of my fears prior to buying my duplex, was the current owner would sign a 10-year lease at $1/month with the current tenants, and I'd be stuck with it. All lawyers and real state agents I spoke with told me that's not something to worry about. I guess I'm just paranoid.
This is the main thing that worry me.. because I'm looking at some multi units home with the listing agent is related to seller and one of the unit is lease to the seller's relatives. do you think they could of doing this ? that info is disclosed in the listing tho
I would have the LL sign a document stating that the tenants are currently up to date in their payments. Also ask him if he has had problems with them and if so what.
Then have him sign as a contingent and later liability that he is stating the truth.
If he moves forward it good and if you find out later he was lying you would have legal recourse.
That's what I'm concerned about too, but how did you find out all this before purchasing a home? did you ask the seller if their tenants paying and they honestly tell you they're behind ?
Well, I figured out the one family smoked like crazy during the first time I saw the place, it just stank. As far as the other people, I wasn't concerned, because I wanted all tenants gone before I bought the place, regardless of their status as tenants. I found out they were deadbeats later while talking to the neighbors.
Quote:
Originally Posted by google9
This is the main thing that worry me.. because I'm looking at some multi units home with the listing agent is related to seller and one of the unit is lease to the seller's relatives. do you think they could of doing this ? that info is disclosed in the listing tho
I'm not a lawyer, but singing a contract with the seller to disclose all this info seems like the way to go. If they try anything shady, sue their pants off.
Personally, I would never want to inherit tenants from another landlord. Unless I'm buying a giant apartment complex, which I'm not likely to do anytime soon.
Request everything regarding the current tenants. Also while the current leases will remain in effect, if you can get the current tenant to agree in writing (plus compensation if applicable) you can terminate the lease if you'd like to. If they don't agree then you have to abide by the current terms. A landlord couldn't really have them sign a 10 year $1 lease because you would have already requested all the current leases and could see the terms.
Definitely ask for copies of the leases, payment history, and any issues/complaints. I would also run a credit check on the tenants before buying the property (you will have to get their permission). Get everything in writing.
Location: When you take flak it means you are on target
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You need to get "estoppel" letters/certificate from the seller and if possible the tenants. Such documents describe third party interests in property, such as terms of leases and deposits on hand. Without that yes, you could get a 10 year lease a $1 a year. Though $10K in lawyer fees would probably fix that. Get the estoppels.
Also, usually the previous LL is selling because the tenant are low life deadbeats and they just can't stand the situation any more. Determine if this is the case. If so require the seller to evict as a term of sale or get a price concession as you will never see a dime from them and it will cost you a grand to boot each one.
Are you using an attorney? If not, perhaps you should be.
I second that, along with a property management company to get you through at least the first year or so. It sounds as though you're not an experienced landlord at all and have a lot to learn before taking on the load yourself. Good luck!
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