Short sale seller wants to be my tenant...

[Jon Huber]

When buying a recent property in New Jersey, I was personally inspecting the property with the realtor when I began to make small talk with the current owner. He was upside down on his mortgage, and had come to accept the short sale process. He began talking about how he had decided to stop paying his mortgage and is now dealing with the consequences. He reached out (via the realtor) that he would like to be my tenant so he didn't have to move out. The contract says the house will be vacant and I already have a prospective tenant. My thoughts are... It would be nice to take a property with someone already moved in. He didn't take great care of the house, as it needs approximately 10k in repairs... He's been there for 15 years. I also understand that his financial situation may not have allowed him to cover those costs. My other thoughts are... If he decided to stop paying the bank, he could just as easily decide to stop paying me. 

Had anyone else been in a similar situation... Where someone had stopped paying their mortgage and then wanted to be a tenant after the short sale?

[Wayne Brooks]

Documents you will sign after the Approval Letter is issued will include an Arms Length Affidavit which will state, among other things, that there are no undisclosed agreements and usually specifically that the owner will Not be allowed to remain in the house and/or rent it from you.