Auction Purchase with Owner Inhabitants

[Alexa Potocki]

Hi,

We just bought a foreclosure home at auction that we intend to rent. The house is currently occupied by the owner. 
How should we approach them? Should we offer to let them stay and sign a lease contract? Is it better to approach people in person or in writing? How should we identify ourselves - investors, landlords? We intend to come across as friendly, but this is a tricky situation and we don't know what we should present at the forefront.

Does anyone have experience with something like this? 

Appreciate any advice!

Alexa

[Andy Mirza]

@Alexa Potocki First, be familiar with the specific state laws that deal with occupants post-foreclosure.

I highly recommend not offering to let them rent from you. First, for some, it's difficult to transition from a homeowner to a renter mentality in the same house. Second, they lost the house because of a failure to pay a significant number of mortgage payments. Why on earth would that change with rental payments to you? (We actually rented a foreclosed condo to a former owner and it worked but that was an exception and was done for a specific reason.)

We almost always offer cash for keys to occupants of properties that we foreclose. The occupant agrees to leave the property in broom swept condition in 30-45 days and we agree to give them cash to do so. We have a cooperative occupant who will most likely not cause any damage to the property and they get certainty of outcome and cash. Even if the occupant seems agreeable, always make your required posting on the property as soon as possible. If the occupant changes their minds or become uncooperative, your posting keeps the clock running on starting the eviction if you have to.

Allow the occupants about a week to decide what to do. If they need more than that, they're usually stalling and have no intention of leaving. Proceed with eviction.