Sub2 Two'fer! Today on "Deeeeeal or No Deal!"

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Seller is a retiring, out of state absentee owner who called looking for options to sell a 1572 sq/ft 3/2/2 with damage from previous tenants (needs appx $7-8 worth of repairs)

Comps are at $120k

Seller owes 117,235

PITI: 720

Potential rent (RTO): $925/mo w/ $5000 Option Fee @$125k PP (Hooray for tax time!)

In it’s current condition I was going to pass on it, as I didn’t want to dump money into a no-equity property and best case scenario break even when/if a tenant buyer gets financing and buys it. So I decided to swing for the fences and see what the seller would concede to.

I asked for and Seller agreed to pay $5000 at closing towards repairs on the above property AND THEN also offered to sell her other move in ready rental Sub2 as well:

Comps $125

Owes: $75k

PITI: $570

Potential rent: $900

This has pretty much sold me on the deal, BUT theres a catch..…her son and his family live in the house, want to remain in the house and have been enjoying $570/mo rent for several years. I told the seller that I would only agree to it, if her kids agreed that in order to remain in the house I would be raising rent. She agreed, and they agreed. There is currently no lease in place.

I want to have them sign an estoppel agreement verifying that there is currently no lease in place, and they are indeed on a month to month etc

I don’t imagine I have the rights to have them pre-emptively sign a lease agreement prior to closing..

I would honestly like to boot them out and RTO, but also like to remain on good terms with my Sub2 sellers (You know..so they don't get a wild hair up their a$$ and call the bank screwing us both over etc..)

QUESTION: What type of legal document /agreement is available to have the tenants sign agreeing to a rent increase BEFORE we close?

I’m probably going to move forward with it, but would definitely like some input/experiences on how to best deal with the kids.