Purchasing Rental Properties from Parents

[Kaitlyn Askey]

I will be purchasing 5 rental properties from my older parents. They are all currently occupied by tenants and the rent they are charging now is well below the market value. We are working with an attorney and CPA to step up mortgages and transfer the properties.  

What are some things I should have ready and how would the change of landlord-ship and new lease best be implemented? Are there any legal issues I should be aware?

Would one LLC be a good idea for all five properties? Any advice for this situation would be great, thank you.

[Richard F.]

As followup to my previous, you do also need to familiarize yourself with local LL/Tenant laws, including SD handling; time-frames for various notices and actions including initiation of repairs requested; and a good overview of the law. Additionally you need to read and heed Federal AND State Fair Housing laws and the Federal Fair Credit Reporting Act; also possibly the Servicemembers Civil Relief Act if you potentially have active duty members as prospects/tenants. Closely review your insurance for each property, and, particularly if any ARE condo/HOA, be sure to get current information on the Master Policy for each HOA, to ensure your policy meshes properly. Many HOA's are raising deductibles to as much as $50,000.00 which will come out of your pocket if not properly covered.