Tenant Occupied Property

[Dominique Ellis]

Hey bigger pockets fam! So I’m a brand new investor looking to make an offer on my first deal and hoped you all could give me your opinions and advice. So this property has a tenant already in it. According to the seller the tenant has been there 10 plus years and are paying below market rent. They are on a month to month lease and would like to stay. The property definitely has some updating and remodeling that needs to be done and from the pictures it looks like the tenants have a slight hoarding problem. If I was to close on this deal, do you all think that I should move on from the current tenant and remodel and get some new people in there so I can bump the rent to market value? Or go with the stable tenant until they are ready to leave? What are some downfalls I could face with this current tenant? Obviously this being my first potential deal it is a bit scary. Also does anyone know of any good real estate lawyers in the Baltimore area that you all have had a good experience with? Any help would be greatly appreciated!

[Mark Cruse]

If they are paying steadily for ten years it seems stable to me. If you spend the money on upgrades, finding new tenants and all the holding costs involved how long would it take the higher price point to recoup that? Suppose you put 10k in upgrades and front all the other expenses with no rent coming in for a few months, how long would it take to get all of that back?