"Communal" tenants

[Sam Leon]

Looking at an single story 8-plex building and the numbers work, but there are a few items that bothered me.

All eight units (1/1) are currently occupied, tenants are either on month to month leases or no lease at all, but they all pay on time (according to seller).

It's an approved short sale, owner is the broker, and is saying tenants are getting a bit impatient with frequent visits from buyers, he wants the buyers to waive the inspection contingency, which I have no problem doing if I can see ALL the units at my own pace and make sure I know what I am up against repair wise.

There are a series of buildings in a row and the tenants all seem to know each other.

When I went to see the building, the owner/broker told me someone would meet me there, a Maria. I thought Maria would be an agent. Turned out Maria is someone living in unit 6.

After meeting Maria she took me to see her unit. Typical 1/1, but in her bedroom I saw 2 spots she has a bucket collecting water leaks and the ceiling sheetrock is stained. I asked Maria what's with the roof and she said she needs to get it fixed. I asked why didn't the owner fix it? She said they normally just get a friend to fix the place...hmm...OK. Maria has 4 cats in her 1/1.

Now she told me we can't get into unit 7 because Jose is in Cuba.

So we went to unit 8 and I noticed one of the window has been boarded up. Why I asked and Maria said because the tenant Victor put a board over it when it broke during the last hurricane...which hurricane I asked, she said hurricane Wilma. Wasn't that in 2005? How long has Victor been renting here? 25 years she said. 25 years? He's been here 25 years and the window broken since 2005 still not fixed.

I asked Maria if they signed leases, she said no, and they all pay her...she collects the rent money and mails it to the current owner. So she is kind of the property manager? She told me she pays the electric and water and sends the balance to the owner. How much is Victor the 25 year tenant paying a month? $535...which is on the low side, and rent hasn't been increased for 25 years. Another tenant been there 18 years, 15 years, 10 years, Maria has been there 2 years, but before that she was in unit 1, she got married and divorced and came back after 2 years.

They all speak Spanish, but Maria is the only one who speaks English, so communication is a problem.

They have no lease, but are all long term tenants and they stay because of the low rent and because they all know each other.

So who mows the yard, oh Orlando does...who is Orlando? Orlando lives in the next building he has a lawn mower he comes mow the lawn here. Do you pay Orlando? No Orlando no pay Orlando nice guy. Orlando lets us use his washing machine...so you all use the laundry facility in the next building? Yes it's very nice.

I started to have a head ache...

I wonder if they are legal residents...

It's not a war zone area, probably very nice people who work hard, some of the residents do not have vehicles, but the building is only 3 blocks from a major road with public transportation.

The numbers do work.

But I doubt I can raise rent without upsetting the dynamics of that group.

I also don't think these tenants found this place online, it's word of mouth.

Something doesn't feel right.