Buying an occupied 3-unit with NO leases

[Mike Dorneman]

Considering submitting an offer on a 3 unit which is fully rented. The current tenants have been living in each unit between 3-10 years. Concerned about my recourse / ability to collect rent consistent with what the current owner states it is. I don’t want to get into a situation where I’m evicting 2 or 3 of the units. The plan would be to execute new leases the moment we take ownership, however the tenants may simply refuse. Per the current owners rent are and my calculations, I’ll cash flow about $500/month on the entire property. This accounts for all normal expenses as well as cap ex. Any advice would be much appreciated! Thanks

[Colleen F.]

Look up estopel agreements. This is when the tenants and in this case current landlord sign to say this is my rent, my security deposit etc. It should work similiar even if there is no written agreement. It states current facts, talk to your lawyer about it. Then you can do a lease with your terms or have them vacate.