REO, came without security deposits

[Paul Stern]

Hi all, I am closing in two weeks on a bank owned property. The previous owner did not have/give up security deposits. Have you been in this situation before? Should I send the tenants a letter telling them to seek out the previous owner for their deposits? Oh and by the way, you owe me the first month's rent plus a security deposit? Your advice is appreciated.

[BeBe Cheng]

@Paul Stern

I bought a short sale in Oakland knowing that I will not get the security deposit. It is a fix upper. I also had to take the not paying well tenants. But with purchase price at $100k, I took it.

Evicted the tenant $1250, fixing $30k, property now value at$230k, renting $1695, much higher than before.

If it is a good deal, do not focus too much these little stuff. If you know your end game and you know how to get there with means (money, time, lawyers, brokers, agents, BPers), go for it. Ask people around to see how many people lost deals over $2k, $5k....... In Bay Area, those costs had easily recovered in couple month's appreciation.