Bought a foreclosure but it’s occupied

[Jason Smith]

I’m in contract with Hudzu on a foreclosure. I’ve only seen the outside but someone is living there. It’s a 1700sqft 4/2 in a good spot and I’d like to turn it into a rental. I’m looking for suggestions and laws regarding how to best approach the people living there. I don’t know if they were the owners or renting from the owner. Thanks for the advice!

[Jay Hinrichs]

Originally posted by @Jason Smith:

@Jay Hinrichs.... help me with an opening line.  

“Knock knock”... Hi, I’m Jason______

Have your receipt..  and be matter of fact.. I was the winning bidder at public auction.. and I wanted to introduce myself and talk about what your plans are.

are you a tenant or are you the homeowner..  If they say tenant say fine can I see your lease please.  Owner then ask them what their plans are.. some will just say.. we are moving on Friday.. and will continually lie to you until you evict them..

I always give them a month or two if they are nice.. and are keeping the house in decent shape.. if you get hard nosed you can end up with a trashed house pretty quickly.. cement down the pipes etc.

Now some others do it different .. they just start eviction process with no personal contact.. if its a tenant the eviction flush's that out and then the owner is evicted.. and you deal with what you have.. Me I am more personal.

and I have made a lot of money doing it that you never know.. I have bought other distressed assets they owned.

one case in particular I got to talking to the lady it was very sad.. house was wreck .. lots of disabled type children adults living there stunk to high heaven.. and I could just see trying to get them out.. flushed out how she got there..  kids talked her into putting loan on house then blew the money ( common occurrence pre 08) when equity was all you needed for a owner occ loan.. it was on septic and well.

I ask where those are turns out the well was on the next door lot and their is no well agreement and the leach field same thing went across prop lines.. so I am thinking this could be 125k down the drain.. LOL.. so now I am thinking I am going ot need to get easements from the lot behind.. now keep in mind one reason I bought his is this property just came into the urban boundary and was zoned for development but it was a few years off.. but anyway.. I ask her who owns that 4 acres behind she says she does.. I say great .. how much do you owe.. she says ZERO... so knowing that the 4 acres one day would be worth stepped up value based on development I said to her.. and again most folks Would NEVER do this.. I said go to an attorney and come up with a number for that 4 acres if I like it I will buy the 4 acres and deed you the house back free and clear..   so long story short they come up with 150k for the land  I paid 125k for house so I sold her the house back and gave her an additional 150k for the 4 acres.. Her attorney valued it.. so I am relieved of any conflict.  So I go to work on it and turns out a developer is putting together 50 acres there and this was a key 4 acres.. I sold it to him one year later for 975k cash.. and walked away a year later with a 700k net profit.. and because I held it a year it was cap gains.. paid my tax and so on and so forth.. had I taken the avenue that most foreclosure buyers do and that is screw em .. kick their butt out they would have never got this deal etc.. I also gave the lady a stern lecture that now she owns her home free and clear.. ( oh and I gave her temp easement for water and septic until the parcel develops then we hook her up to city.. )  but stern lecture to not led the kids take her house and mortgage it.