Rental Property Investor · Springfield, MO · Member since 2016 · 1k+ posts · 890 votes
Good Morning, Afternoon, or Evening all.
There is somebody in my area of investing that is trying to offload a lot of houses. I'm assuming that they have reached retirement and are content to sell and relax. This individual is selling houses below market value, and if the advertised gross monthly rent is accurate they would be a great deal!
The issue is that this individual does not maintain a copy of the lease agreements for any of their property, doesn't maintain profit/loss statements, and can't tell me what kind of maintenance might be needed. I am currently stationed across the country so I can't physically go look at any of the properties. Any advice on how I could attempt to verify the information, or is it worth taking the risk because an 80k property supposedly rents for 1800 a month. Is the best bet to turn my back to all of the properties listed, and ignore them?
Real Estate Agent · Circleville, OH · Member since 2008 · 633 posts · 488 votes
9y
I'd pay a real estate agent in that area, or a property manager money to go investigate them. I've had some that were in terrible condition with tenants who were not paying any rent at all and the landlord claimed everything was just fine. Wiring that was exposed, drain problems and all sorts of crazy stuff.
Risk can be mitigated somewhat, but not personally investigating adds another layer of difficulty to the deal.
Real Estate Investor · Houston, TX · Member since 2015 · 54 posts · 7 votes
9y
I was just listening to an older podcast on BP and this guy mentioned he uses wegolook.com. I doubt they will go ask tenants questions like I would but it may get you more info.
Investor · Saint Louis, MO · Member since 2016 · 970 posts · 1k+ votes
9y
I think that risk of not knowing anything is being reflected in the discounted price. I guess I would just research rents/neighborhood on Zillow/craiglist/etc. and make a decision from there if you don't have much time
Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
9y
Even if the landlord does not keep records of leases, the tenants probably do. Ask the landlord if you can give estoppel letters to the tenants and then you'll at least know what the tenants think their lease is. If the landlord says their rent is $1800 and the tenants say it's $800, then you know you've got some issues to work through.
Get boots on the ground to walk the property for you and take video/pictures.
Real Estate Agent · Circleville, OH · Member since 2008 · 633 posts · 488 votes
9y
I'd pay a real estate agent in that area, or a property manager money to go investigate them. I've had some that were in terrible condition with tenants who were not paying any rent at all and the landlord claimed everything was just fine. Wiring that was exposed, drain problems and all sorts of crazy stuff.
Risk can be mitigated somewhat, but not personally investigating adds another layer of difficulty to the deal.
Rental Property Investor · Springfield, MO · Member since 2016 · 1k+ posts · 890 votes
9y
I really appreciate the advice, and I'm glad that you are suggesting I continue looking. I was trying to justify that I wasn't walking into a blackhole, and I appreciate the optimism. Thank you very much!
I would look at rental comps on craigslist. If the comps look consistent with what the seller is claiming, I would send a real estate agent to check out the houses, take pictures and email them to you.
It seems like the seller is disorganized. However, I don't think that makes them a slumlord.
Rental Property Investor · Springfield, MO · Member since 2016 · 1k+ posts · 890 votes
9y
I wouldnt use that term on my own accord, the selling agent (representing him) has stated that he is known as the slumlord of the area haha. I appreciate the advice!