Acquiring a tenant occupied property

[Solomon Morris]

All,

BLUF: Ask the seller if he or she told the managing element of their intention to sell the property

Last month, I purchased a small multifamily property off the MLS in baltimore, Maryland. Currently the property is not 100% stabilized (as anticipated) and I am working diligently to make it so. I am continually learning as I take action along my path and would like to offer a word of advice that will save you a 30 day headache..

If you wish to purchase a tenant occupied property from another investor or landlord and move the asset to another property management company, ask the seller to inform the property manager of his or her intention to sell.  I learned there is a management industry standard 30 days to inform tenants of the sale, finalize payments and to gather the necessary paperwork related to the property and all of its affairs.  Things get even more convoluted if a tenant is on a voucher.  Contact must be made to the office along with documentation regarding the transfer. A pay period has since passed and I am still working with the seller to isolate rent payments, transfer the security deposits and obtain all the licenses and documents for the property. 

Have a happy holidays BP!

[Solomon Morris]

@Anthony McEvoy I would also ask about any pending or reoccurring inspections that may be scheduled for the property.  In baltimore, we have numerous annual "due outs" I had no idea about prior to buying my first property. inspections for lead, section 8, rental licenses, insurance etc.  Understanding the current schedule for any and all inspections and what they may entail will keep you from getting blindsided. 

Wish you a smooth transaction!