Should I buy a foreclosed home with tenants that come with it?

[Yolanta Kornak]

I recently found a three family foreclosed house on the market in NJ, a tenant friendly state (being sold as is). It is undervalued and in an B+ neighborhood with great schools, etc. One of the three units is occupied and would come with the sale. The other two units are vacant.  It is a bank owned property and they aren't letting anyone on the premises. On the exterior, it looks ok- maybe would need a new roof soon. But, I wonder if there are red flags that I am missing. Perhaps the tenants that are coming with the property are bad tenants? There is no more information I can get on it. Any advice? This would be a first time home purchase and I don't want it to be a complete money pit. Can I get an inspection before finalizing the sale? Is there a way I can find out about the tenants that come with the property?  Any help would be greatly appreciated!!

[Natalie Schanne]

@Yolanta Kornak - @Jason Hirko gave you some good advice. Be friendly and talk to the current tenants/occupants. Always factor in the holding costs and damage from acquiring an occupant or tenant (1.5x rent max security deposit, mortgage, property taxes, trash & water for 6 months for that unit, extra repairs you don't know yet, cash for keys payout). Laws are different from state to state. I'm an agent in NJ and I just bought an occupied property from auction.com & wells fargo, as-is, inside unseen. I'm going to use a CASH FOR KEYS contract (google it) to get the occupant to vacate the premises and leave it in as good a condition as it currently is (minus their stuff). How much is subject to negotiation. If they won't take my money, I'll pay the neighbors to make sure they don't loot my property and You never know if an angry tenant who also hasn't been paying rent for months will trash your new unit on the way out if he/she has to be evicted... so factor that in unless you've already talked to them and they seem reasonable.  If a property is foreclosed, it is likely that this person doesn't pay rent on time. The bank may or may not have tried cash for keys. In PA, it's 6-12 months to eject a former owner occupant. A tenant would be sent a 10 day notice to vacate for non-payment of rent or 30 days notice to vacate/not renew the lease. You may be stuck with whatever lease is signed on the property assuming it's not unreasonable (20 years for $1/mo). Read the landlord forums, A LOT of inherited tenants are trouble and headaches and not someone you would have picked if you had received the application. If you buy the property, get the tenant to fill out a new application and lease with you. Make sure you file to evict them at the first sign of non payment or trouble.  Talk to your realtor and/or check out craigslist to figure out if the rents are below, at, or above market rates. Another way to encourage a tenant to move on is to keep raising the rent by 5-10%.