Help Navigating Purchase of Tenant Occupied Property

[Jennifer M.]

Hi everyone!  This is my first post on BP, and I would like to share about a deal I'm currently working on and get some feedback and help.  I have 6 small houses (all under 1000 s/f) in a row on a little side street under contract.  They are in pretty bad shape and I want to fix them up and turn them into rentals.  Actually, they already are rentals, but I would like to have the current tenants move out, renovate and then rent at a higher rate.  Each house is currently leased, 5 of them month-to-month and 1 with a lease term expiring later this year.

This morning, I had an inspector booked and my realtor had informed the listing agent, who was supposed to coordinate with the property manager.  I had requested the tenants not be on the property during the inspection and my agent was supposed to pass this request along (the tenants were actually all home during the one opportunity I had to view the properties).

Somewhere along the way, lines apparently got crossed, and when I showed up to the property this morning with my inspector, the property manager was nowhere to be found, the tenants were all at home and had no idea an inspection would be taking place.  I informed my agent of the situation and was told the property manager was MIA.  So, very frustrated that I wasted the inspector (and the termite inspector's) time.  Luckily they were very kind about it and we have rescheduled.

HOWEVER, this is making me rethink purchasing occupied properties...it is probably going to be a big burden to deal with making sure that 6 families move out of their homes.  Not to mention the fact that I feel bad making them move.  I tell myself that if it weren't me purchasing the properties and kicking them out, it would likely be another investor.  So, either way they will likely have to move.

I really would like the burden of removing the tenants to be on the seller...do you all think there is any way to motivate the seller into doing so as a requirement of closing on the property?  I am sure the month to month tenants are allowed 30 days notice, so this would delay closing by quite some time.  But, I honestly think the seller is going to have a hard time selling these houses, being that they are occupied by people who seemingly never leave the property (not even for showings!).

Please let me know your thoughts.