Need advice on the first purchase_urgent

[Mun Mohsin]

I am new in BP and a new in real estate investment (out of state).  I liked a SF home in Akron, OH that came in the market as the previous contract fell through, not knowing what make the buyer backed off.  The house is tenat occupied since 2018 and from January 2024 til December 2024; the lease agreement shows the rent to be more than 17% higher, the new rent is $825 vs old the rent of $710.   The seller agent says the tenant no intension to move out.  I asked the agent for rent roll which I have not received it yet.  The lease paper indicates the new rent to be effective from Januray though the paper was signed on February 1, 2024, after I asked for it.  I had the opprtunity to look into the last inspection report, dated January 2024 (done for the other buyer who backed off)  indicates minor issues incluing lead water Line (from Meter to the faucets). I liked the house and willing to purchase, however, feel sort of undecided given the following reasons.  I would love to hear from the pros on how to proceed in this case. 

1. The increase rent by more than 17% appeares to be to very unlikely.  Is there any way to verify the tenat is reallying this much? Is it nmormal to ask and I should take the risk.  If I had to get a new tenat it would cost me around $7-10k to repair those minors issues mentioned in the inspection report.  

2. Is calling the existing tenant and verying would be a good approach?  

3.  How to verify the reason the other buyer to back off?

Looks like the buyer is desperate to sell and willing to negotiate.  He lowered the price by 5% this week.  And so far I am the only one interested for this per the seller agent.

Any advice would be highly appreciated.  

Thanks.. Mun 

[Charles Carillo]

@Mun Mohsin

In regards to the current tenant, I would figure out what the current market rent is for the property and what the market rent would be after you do the renovations/repairs. There is no way to know if the tenant is going to stay or not. After completing the work, you might find that the market rent is higher than $825. Reaching out to the tenant is not really effective since they can tell you anything, and I have never contacted any tenants prior to owning a property. Now, if you are doing the physical inspection and the tenant is there, ask them all the questions.

It really doesn't matter why the other buyer backed out. Hire an inspector to review the property in-depth. Get actual estimates on the work that needs to be performed. Bring in any other contractors as needed, and definitely bring in a plumber to verify the scope and cost of the work.