Tenants son severely damaged unit

[Alex Rodriguez]

Hello everyone, I just acquired a 4plex in Sacramento California which has a unit that has had the renter in there for 10yrs current rent is 900 Market at about 1500-1600. During the inspection It was obvious with the amount of damages that were in this unit would need a full rehab once the tenant is gone. Apparently over the last ten years her son (special needs) has thrown things into the walls, broken the door, kicked every closet door down. I purchased the property knowing the damage is there. She is a. M-M tenant and has payed the rent on time over the last 10yrs. I was able to track down her original lease along with photos from the old Pm at the time of move in. My question to you guys/gals is what would you do in this situation? Have any of you dealt with a similar situation where you inherited a really bad unit where the old owner/pm's didn't do anything about the damage? Ideally I would like to serve a 60day notice as I have proof that the unit was given in good shape at move in and now has been heavily damaged, which would be against the original lease she signed. Trying to weigh my options. 

[Nathan Gesner]

Quote from @Alex Rodriguez:

Hello everyone, I just acquired a 4plex in Sacramento California which has a unit that has had the renter in there for 10yrs current rent is 900 Market at about 1500-1600. During the inspection It was obvious with the amount of damages that were in this unit would need a full rehab once the tenant is gone. Apparently over the last ten years her son (special needs) has thrown things into the walls, broken the door, kicked every closet door down. I purchased the property knowing the damage is there. She is a. M-M tenant and has payed the rent on time over the last 10yrs. I was able to track down her original lease along with photos from the old Pm at the time of move in. My question to you guys/gals is what would you do in this situation? Have any of you dealt with a similar situation where you inherited a really bad unit where the old owner/pm's didn't do anything about the damage? Ideally I would like to serve a 60day notice as I have proof that the unit was given in good shape at move in and now has been heavily damaged, which would be against the original lease she signed. Trying to weigh my options. 

This is remarkably simple from a business standpoint. Terminate her lease with 60 days notice (or whatever the law requires) so she has time to find something and you have time to line up contractors and materials. Get her out, renovate, and get it rented at market rate.

If she gives even the slightest hint about fighting you, I would make it very clear that you're letting her walk away without penalty. If she fights you, then you intend to hold her accountable for all the damages which will probably add up to $10,000 - $20,000.

Too many investors think low rent rates will keep tenants happy, that they'll appreciate what they've got, and they'll take better care of the rental. I've been in the business for 13 years, I network with thousands of investors and property managers around the country, and I can tell you that this type of Landlord loses almost every time.