First Rental Property where Strategy Changed at Closing

[Daniel McFadden]

So we just closed on our first rental property in a different city about an hour an half where we live on yesterday YAY!!!, but there was some craziness all throughout the day and throughout the process.

It seem to start with the seller of the property. He was selling the home and currently had tenants living in it on a VERBAL month to month lease with no real annual written lease agreement (Strike 1 against us). He was trying to be fair with the current tenants and told us that he only wanted to sell the home if we would allow the current tenants to stay for 6 additional months without eviction or an increase in rent. Now this home is a 4 bed 1.5 bath home in a not so affluent area, they are charging $800 a month when the rent could easily be $950-1100 a month. But we negotiated the terms and agreed to not evict the tenants or raise rent for 3 months. We agreed because that appeared to be a win-win for us to at least have some cash flow until we figured out what repairs and renovations we were going to do to the home.

During the inspection period, we went by the home and noticed that the tenants had boxes and things packed. They told us the seller came by and said they were selling the home and needed to find a new place. We contacted our agent to make sure that their listing agent and seller was going to communicate that information to them. 
To make a long story short, we didn't find out until right before closing that the tenants had already moved out even though we have in our contract addendum that "we will not evict nor raise rent in the next 3 months". I feel like the seller never truly communicated with the tenants about what they were trying to do. We tried reaching out to the tenants about a week before closing to make sure they knew who the knew property managers were but they never answered our calls or responded to our text (Strike 2). 

I was little bummed about it because I went into the situation ready to starting making some cash flow but now we have to do some repairs probably about 5k-10k to get the home back up and also to justify the increase in rent. 

I'm certainly learning from this experience already and hope this will continue to work out better than it's starting.