Pass on the police activity and partying tenants

[Alecia Loveless]

I’ve got an opportunity to buy a solidly performing 7-Unit building.

However tonight my coworker told me she lives across the street from it and that when she gets home from her second shift job at around 11:30pm more often than not there are multiple people standing on the porch of this building drinking and yelling and having a good time, and that often the police show up there and many times while my coworker has lived in her building for the past two years an ambulance has showed up and put one of the tenants in a stretcher and taken them away to the hospital. Obviously I have no way of knowing why, but if I go further with this I will contact the police department to find out what’s going on with the property.

Would this be a hard pass for other investors? Or would you see it as an opportunity to clean out the riff raff and build a good solid tenant base? The building itself has been renovated and it is centrally located to shops and the highway for travel.

[Mike Dymski]

Drive by and check it on nights and weekends. Pull the police reports. If the rents are below market, you may have the opportunity to clean house. You may have the opportunity to clean house regardless. Many owners neglect their properties, don't perform proper screening, and don't enforce the lease and those can be good opportunities to pick up poorly run properties at distressed prices. Review the lease agreements to ensure you have the ability to enforce peaceful enjoyment and evict if needed. Ensure that you are in a owner friendly jurisdiction as well. Take a problem off another owner's hands, improve the NOI for you, and clean up the neighborhood...win, win, win!