1st potential property- current tenant won’t allow showing

[Bridget Pasternak]

Hi everyone. I am currently looking at my first deal. In my market it seems like everything gets snapped up the day it goes on the market and sometimes above asking price.

I found a condo that I am interested in. It’s currently rented with a tenant who would like to stay on after the lease is up on 4/30. This part seems attractive to me as long as the tenant’s rent is not too low and they have a good history of timely payments. The tenant won’t allow anyone in to see the unit until an offer is in place.

My realtor called the listing agent to find out more. The owner lives out of state and thinks the market here is “hot” and has priced it based on what he thinks it should go for (comps are showing quite a bit lower). My realtor said this is probably not a great idea for my first property but I think it could be great since others have been turned off by this.

What do you all think about the idea of learning more about the tenant situation and then making an offer (at a reasonable price considering comps) with an inspection and appraisal clause? I feel like there’s not tremendous risk in that. I can see the carpeting needs to be replaced and the kitchen/bathroom could be upgraded but I like the idea that I won’t have to do that until the tenant moves out at a later date. If anything really bad comes out of the inspection, I can back out.

[Chris Davidson]

@Bridget Pasternak you are on the right track. As long as your realtor writes the offer correctly you will be covered and could back out and get your earnest money if something came up during the inspection (either yours or a third party). It is not uncommon to see investment property showing contingent on an accepted offer. This eliminates the tire kicker types that want to look but have no intention of actually buying.

Best of luck!