Going to look at a duplex this weekend

[Brian Lesko]

I'm going to look at a duplex in my town this weekend.  It is fully rented.  Currently pulling in $525 per month per unit.  Total gross rent = $1050 per month.  Utilities are separate and paid by the tenants less the yard maintenance and snow removal.  It's only a few miles from me and in a good part of town.  Asking price is $69K.  The agent said that it's owned by an older couple who are tired of being landlords.  They just want out apparently.  From the pictures, the units look to be in good shape with updated hardwood, paint, and appliances.  I don't have info yet on HVAC, plumbing, roof condition.  I'll find out when I view it.  Any tips to look out for or questions and info that I should be asking?  Thanks in advance. 

[Ricardo R.]

@Brian Lesko

Without looking at property, these are just a few that come to mind, of course some of these are a bit to soon to ask during a showing and even the realtor may not be prepared or know the answers to these, but eventually if you want to proceed with this property you should definitely get answers to these:

How long have current Tenants been there?

When is their lease up? (are you stuck with them for years to come, or is their lease up before closing)

Can you review the leases? (would it be a surprise if you find out subletting is allowed later)

Can you review their initial applications and background verification if any? 

Did the Landlord offer any concessions to the current Tenants i.e. free month's rent, credit towards utilities, etc.?

Can you show a rent payment history for current Tenants/have they always paid on time? ( any deposit paperwork from the current landlord would do for as far back as you need to show that indeed they have been receiving rent for those months)

How will the current Tenant's security deposits be treated upon sale? (preferably transferred directly to you and hopefully not back to Tenant and then to you or worse not transferred at all)

Would you be able to meet the current Tenant's prior to closing?

What company/who currently maintains the yard/snow removal? (you can verify later as to how much they charge)

What do the current owners allocate for maintenance/repairs currently? Would they be willing to allocate all of that or a portion of that to you (for this year currently), since they have collected it and you are starting with 0 for the maintenance/repairs?

If any units are empty, would the current owners allow you to list and show the property for rent before closing after you sign the purchase agreement?

Does the county/township require that your register your duplex? If so, how often, how much, is it currently registered, can you see it? 

If utilities are paid by Tenants, which ones specifically? Does that mean water utility is currently in the Tenants names? (You would like that specific utility in your name and then forward the balance to your Tenants) would current owner help facilitate that before closing if you sign the purchase agreement? (I would like to think the Title company would catch this but, if water is in Tenants names you need to ensure they have not racked up an unpaid balance, because this is the one utility that will not follow the Tenant and will instead stick to the property, like I said I'm sure the title company should catch this but never hurts to be sure otherwise you may be facing the option of paying an extremely high water bill or having the water shut off.) - This may also be a question for your Title company first.

In your inspection contingency  you would like to review most of the above during that time, can it be provided for your review then? -- If you are not going with an inspection contingency then when can you review the above and verify? What if the paperwork doesn't check out and you want out but you have no inspection contingency what options do you have then - can there be some kind of 'document review period contingency'?

Are the owners open to owner financing? 

Hope this helps.