Purchasing A Multifamily Property With Tenants

[Ronnie Phillips]

Hi I'm new to this and looking to start my journey towards financial freedom, I'm looking into purchasing a multi family rental unit to start earning passive income. One huge question i have is why would someone sell a duplex that already has tenants living in both homes. Is this a red flag?

[Noah Laker]

What's up Ronnie, I'm a local broker, investor, and PM. Every property has a unique story. In many cases like this, it will either be one of two things:

1) Lifestyle change. The owner is going through a move, or a divorce, or some other life-altering decision, and needs to offload the property.

2) Flippers. Some savvy investors will buy a multifamily property in rough condition, fix it up, and rent it out so that the end buyer (you) has a turnkey experience. This can enhance the property value for a fast sale, so they can pull their capital back out to do it again.

As always, best thing to do is ask, but also be skeptical and perform your own due diligence. I buy and help people buy multifamily all the time and you really wanna be thorough during inspections. Don't forget to ask for tenant estoppel certificates as well as tenant ledgers!