Seller's current tenant has a lease agreement for FREE rent!

[Account Closed]

Seller is out of state and inherited a property from seller's deceased father. Deceased father's girlfriend (tenant) has remained in the property rent free since the passing of the father over 1 year ago. Seller and tenant absolutely hate each other, but remaining family members have pressured seller into entering into an agreement to allow the tenant to remain in the property, rent free, until June 2017.

Seller is in a financial bind, can't afford to pay the taxes and wants to sell ASAP.

In previous situations where an occupant needed time to vacate, I paid seller half the purchase price at closing and left the other half in escrow until the occupant vacated the premises, obviously with the condition the property is left in similar condition before remaining funds were disbursed. But that was always for short term, occupant just needed time to move etc. I wouldn't mind doing so IF the tenant was actually paying rent and/or was leaving in the near term, but i don't want to deploy capital to sit for 4-5 months before i can get started on renovations. Just by the context of the conversation with the seller, i wouldn't be suprised if the tenant 1. doesn't leave on time and needs evicted and/or 2. trashes the house on the way out the door.

Quick Sale ARV: $90k
Repairs: Unknown. I'm viewing the house tomorrow. The seller says it's "livable".. but we all know what that could mean

Seller initially asked for $50k, i declined as it's 2 hours from me in a very rural location; however two months later the seller recontacted me and is now BEGGING for an offer.

Offer $25k cash and take the risk?
Offer Seller Financing with deferred payments?

What would YOU do?

[Roy N.]

We had a situation similar to that: Seller wanted written into the Agreement of Sale that tenant in one unit would not have a rent increase for 24-months {their rent was not free, but was 25% below market}.    We sized up the situation - unit could not be re-rented w/o a substantial renovation - and agreed to the 24-months of frozen rent in exchange for a further reduction in the sale price by the amount of 24-months rent at market rate.   The vendor accepted.