Offer Accepted - Due diligence under way on SFH with two separate dwellings

[Kylene Heykants]

Hi BP community,

I recently got an accepted offer on a SFH in Alberta, Canada that has two separately metered legal suites. I'm currently performing due diligence with the property and need some advice. The property has two tenants currently in place which makes me nervous as I personally didn't screen them. This will be my first time managing a residential property which I'm assuming will take a bit more work than my commercial properties (I currently own and manage 4 commercial bays in the city I reside in). Because of this I want to make sure these tenants meet my standards. One of the units has a lease in place until early 2024, and I'm unsure of the other lease as I have not received the leases yet. When choosing my own tenants I would like to confirm their income, run a credit check and speak to past landlords but unsure if I can do this when the tenants are already in place.

Both suites are currently below market value (~20%) and I would like to do some work on the suites (light renovation) when they are not occupied.

What strategies do you use to ensure the current tenants are up to your standards when purchasing a property? Can I still run a qualification process when the tenants are already in place? Is there something in the due diligence phase that is a MUST to review that I may miss?

Any advice would be greatly appreciated! Love the BP podcast, their books and courses but rarely post on the forum. 

Thank you everyone!

Kylene