Tenant Buy Outs

[Sam Quinlan]

Hello hello! Looking to purchase a duplex tenant is month-to-month and the other has a 12 month lease that ends in April 2025. I was looking to move in to the unit that the month-to-month currently occupies. Wanting to weigh up my options on either keeping the tenant until their leases up in April or considering a tenant buyout. How do you price out a tenant buyout? And is there more way to do this?  anybody with information on this topic I would be happy to get a response from thank you! This property is located in Roseville, California.

[JD Martin]

Quote from @Sam Quinlan:

Hello hello! Looking to purchase a duplex tenant is month-to-month and the other has a 12 month lease that ends in April 2025. I was looking to move in to the unit that the month-to-month currently occupies. Wanting to weigh up my options on either keeping the tenant until their leases up in April or considering a tenant buyout. How do you price out a tenant buyout? And is there more way to do this?  anybody with information on this topic I would be happy to get a response from thank you! This property is located in Roseville, California.

 If they are M2M why would you need to wait until April? You said you are looking to move into the monthly unit, so I would just give them their notice and proceed.

[Noah Laker]

Hey Sam,

Good move. The m2m tenant presumably has lived there for MORE than 12 months, so based on AB1482 "no-fault eviction" legislation, you cannot simply give notice to vacate. However, if you as the owner are moving in, that would be a valid reason, so long as you give them ample notice time -- 60 or 90 days I think, depending on how long they've occupied.

As for the other tenants, if this is their first lease term and they've lived there for less than a year, you can simply give them a non-renewal 60 days in advance of the end of their lease. 

If you want to go the "cash for keys" route, there is no specific formula or legal limit, it's just something you negotiate directly with them. I've seen 1-2 months rent used in the past, so that might be a good starting point. 

I'm a local broker and PM, let me know if you need any help with this. 

[Jake Andronico]

@Sam Quinlan

I would get very familiar w/ tenant/landlord laws in CA and specifically in Roseville. 

I'm just over the hill in Reno, NV and I'm obviously bias but this would be extremely easy with a MTM lease! 

A buyout will just depend on what a tenant agrees to. 

[Scott Scoville]

Quote from @Sam Quinlan:

Hello hello! Looking to purchase a duplex tenant is month-to-month and the other has a 12 month lease that ends in April 2025. I was looking to move in to the unit that the month-to-month currently occupies. Wanting to weigh up my options on either keeping the tenant until their leases up in April or considering a tenant buyout. How do you price out a tenant buyout? And is there more way to do this?  anybody with information on this topic I would be happy to get a response from thank you! This property is located in Roseville, California.

Hey Sam, I'm an agent and investor in the greater Sacramento area. We've done a ton of "Cash for Keys" in the area. Be happy to give you some pointers anytime. DM if you'd like to chat.