Specialist · Hermosa Beach, CA · Member since 2016 · 94 posts · 55 votes
I have the opportunity to buy a distressed property 3 blocks from the beach in the Torrance area. The owner has 2 weeks before the home is auctioned off. Complicating the matters are 3 tenants, non of them paying rent. One of the tenants appears mentally ill and another has anger issues.
The owner wants $1.4 million, I'm thinking closer to $900k, on account there is deferred maintenance and then having to get rid of all 3 tenants. I would plan to live in the house, rent out what appears to be an ADU unit in the backyard.
He says he "needs" cash within 2 weeks. I'd plan to offer him a cash offer of $900k, or $100k cash down and he take back a note for $1.3k.
I'm looking for suggestions, possibly even an equity partner in the deal, and/or a down payment help funding source.
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
2y
2 weeks will be extremely challenging especially without pre arranged financing.
In some ways the delinquent rent is a positive because it implies that rent control does not come into play.
On purchase, you want the owed money to transfer with the purchase. Not because you are likely to collect any of the owed money, but because it establishes that they are delinquent so that you can start the eviction process on day 1. I am not in the Los Angeles market, you will want to get referrals to a rock star eviction lawyer prior to the close. Again this is so you can start the eviction process on day 1 with someone that knows what they are doing and can minimize the time and process.
Realize evictions can be a slow process in CA. Be prepared to potentially have zero income for many months.
In addition, you will want to check the permits. I state this because "what appears to be an ADU" could be an unpermitted unit. Unpermitted units are worth a small fraction of what a legal ADU is worth.
You will need to work this hard to make this happen. Obtain financing, permit checks, inspections, start and close escrow, being prepared to start the eviction on day 1 all in 2 weeks. Good luck
Specialist · Hermosa Beach, CA · Member since 2016 · 94 posts · 55 votes
2y
Great advice on getting the rental income transferred to me upon purchase. I do plan to get an experienced, rock-star eviction attorney. Thank you as well for the advice on checking on the legality of any extra work done on the property, permitted or not.