Foreclosed but Owner still there !

[Sante R.]

Hello BP Family,

I am contemplating on buying a property that has been foreclosed on. However, the previous owners are still there! I have a few other foreclosed properties with tenants in them but the owner had vacated long before I purchased them. The bank has started the eviction process 3 MONTHS ago but will cease once the property is sold allowing the new buyer to continue the process. Does anyone have any advice on if I should move forward or let this one go?

[Joel Owens]

Sante in these situations IF, IF you take it on you reduce your offer heavily to the bank on the REO.

If the bank wants a premium and to dump a problem then move on to another property. Tell the listing broker to tell the asset manager that you are not dealing with a former holdover home owner tenant unless the price is really cheap.

The bank might just write off a bigger loss than wanting to deal with fighting a holdover tenant. If you are buying and holding you would just need to factor in a long time of no cash flow coming in. The other part is you can't just like a short sale accurately assess what kind of damage the outgoing tenant will do to a property if they are not out yet when buying.