People still living in the property we are purchasing. What do we do?

Question

Hello BP!

What would you suggest that we do in this situation?....We are set to close on a fix and flip property on 8/3. The property is currently in a trust. The owner has passed away and the successor trustee is now selling the property to us. There are 8 or so siblings who stand to get an inheritance from the proceeds. Two of the siblings currently live in the house. All of the siblings, including the two living in the property, are pressuring us to close quickly because they all need the money. However, the two living in the property don't want to have to move until the 15th. How do we best protect ourselves from a situation where the two siblings decide not to move out, or want to take their sweet time?

Erin P. · Answer

Thank you all for your great advice! We decided to go ahead and close, but only after the trustee signed an escrow amendment stating that no funds would be released until the house has been delivered vacant. They were out in a day and a half!! I am certain that things would have likely gone very differently had we not put that amendment in place. Thank you all again for taking the time to share your thoughts and advice. Go Bigger Pockets!

Account Closed · Answer

all extra costs you incur such as interest on the loan etc. should be passed to sellers.

Cal C. · Answer

I'm glad you were able to get them out.  However, I think you took a huge risk by buying the house with them in it.  Two siblings living in the house out of 8 total siblings could have very easily led to years of lawsuits while your money is tied up in a house you don't have in your possession.  Yes money is a great motivator to get someone out, but that doesn't always work particularly in a family home.  Bottomline you gambled and won.   I wouldn't have done this in any state and absolutely not in tenant (they were tenants or the equivalent for a day and a half) friendly CA.

Elizabeth Colegrove · Answer

Money talks :) I would let the other sibling put the pressure on them if they think they are losing the deal. I personally am not a fan of extra risk with out huge reward.

Cal C. · Answer

I missed that this is in  CA.  Forget option 2.   That would work in most states but maybe not CA.  See Will Barnards monster thread on the occupants from hell.

Erin P. · Answer

Thank you all for your feedback! Looks like the consensus is to delay the closing until the siblings are out, and let the other siblings help and/or put pressure on them. Your second option is intriguing as well @Wayne Brooks -- I'll have to give that some more thought. Thank you all again. Your comments are very helpful!!

Cal C. · Answer

I'd guess like most people in America the two siblings in the property are broke and need the sales proceeds to move.  Make it their siblings responsibility to get them out not yours. Do not close until it's verified empty.

Wayne Brooks · Answer

1) don't close until it's vacant.  Let the other siblings help, or put pressure on, the two living there.

2) Close, but hold back in escrow a Large chunk of their equity, put $1-2k a week in penalties of they're not out on time, plus eviction costs.

3) Close and take your chances.

Brian G. · Answer

@Erin P. I have seen this one before. Not the same but similar scenario. Not me but a good friend of mine. He was tipped off that the seller family members could not move out right away after closing. He inmediately involved his attorney and was able to secure and agreement with the seller to have access 100% to the property after closing. At the closing date he showed up on time, funds were at escrow, the seller was there, and his brother showed up at the property. My friend didn't close until his brother confirmed the property was vacant. Lots of back and forth and many hours to close the deal.

Victor Argueta · Answer

If you close the property as is, occupied and the siblings decide to stick around, you will then begin the eviction process. My advice is to get an extension and only close when the house is vacant. Do a final walk through before this of course. By explaining the only reason you are getting an extension is due to the siblings in the house this may get the brothers to help out and get them out. Also, if you decide to go ahead and close it tenant occupied, I strongly encourage you to get  tenant occupied property insurance in case they tear up the place if you end up in eviction proceedings (regardless of property conditions).

People still living in the property we are purchasing. What do we do?

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