Speak with tenants before putting in an offer?

[Heath Jones]

Is it against professional courtesy to speak with current tenants in an apartment before having an accepted LOI?

[Mike Cumbie]

This is also why some investors don't allow showings without an accepted offer. From a single investor looking at buying the place and chatting up tenants and walking through the yard and measuring stuff is one thing. Now imagine 30 investors who want to see your place. You have tenants that are entitled to quiet enjoyment of the property. Each one "Doesn't care about upsetting you or hurting your feelings". Tenants start calling for rent adjustments, these same investors are pointing out stuff and asking questions the tenant never thought of "This standing water here, is it always like that"? "When was the last time it was tested for Radon, do you know?"

In the end it is up to you. It is a free country and you can talk to who you want. Investors all know each other as well though. Sitting around having coffee at the diner together and they start saying "Fred Smith went and was talking to my tenants, got them all fired up about a $6.00 loose fitting". Regardless if that was the intention or not some investor who has zero skin in this house at all has started problems that the owner now has to deal with. If it is a competitive situation and I have 3 offers in front of him, you can bet at one point the words 'Wait, is that the guy who got Marcy all worried about losing her house"? will come up. 

Is it against professional courtesy? I will stand by saying, "Yes, that's something you don't do". Is there anything good that can come from it? Either the tenant is trying to impress you or the tenant is trying to discourage you from buying. Not sure how many have tenants who think this is the best unit ever and tell people what a great deal they are getting...... because a rent increase is coming if they think that. But in the end your choice, I personally like starting a negotiation off with the other party having a positive impression of me.