Would you buy a property knowing all current tenants need to be evicted?

Question

Elizabeth Colegrove · Answer

What is the actual discount amount (300k would be plenty of room for problem 15k not so much)? Are you willing to handle the issues and stress that go with eviction? What are you local laws? Do you have an attorney, I would speak to one and get their opinion.

I am an out of the box thinker. If the value is right I would go for it. I would just expect it to be a miserable and expensive experience. So make sure you have enough money i the deal to make it worth it.

Johnny Kang · Answer

@Al Williamson

I agree with what Al said. When we buy properties, it's always subject to the property being delivered vacant. That does not mean trying to evict people. Our office is in Flushing, Queens, so I know how evictions go in NY. (we've actually been trying to evict someone since June 2014!!! We've offered them $6000 and they still won't leave.) Instead we ask them if they have a place they've picked out; if they need assistance packing up and moving, how we can help, and listen to what they're going through (a lot of people get overwhelmed when thinking about moving, and when they see that you actually care about them, they'll be more willing to work with you to). One tenant from another property, we paid for his moving cost twice, because half of his stuff weren't packed on the day of his move, so we had to get the movers come back a second time, and offered to pay half of his security deposit as well, and added an extra $1000 incentive on top of all this if he can move by the end of February, instead of beginning of March. He moved in March. We're only working with the tenant(s) after we go to contract, closing being subject to the property being delivered vacant, so we're not doing all this work for nothing. (the move itself cost us $1700, and $500 for 1/2 of security deposit).

Regarding how much you'd have to pay them, it really depends on how willing they are to work with you. The more willing they are, the less you'd have to spend, which is also an indication what kind of people you're dealing with.

So the thing you want to do is, only close subject to the property being delivered vacant, and work with the seller and the tenants to move them, instead of closing on the property first, then trying to evict them out. If you've never done something like this, work with an investor who has experience doing this in NYC. And don't just take an attorney's word for it. My partners and I have dealt with many attorneys who sound good, but after they've got your retainer check, don't perform; but that could be in people in any profession.

Johnny

Aly W. · Answer

NY is a tenant friendly state. I would consult with an attorney that specializes in landlord/tenant law, and find out how much time and money this will cost you in fees and lost rent, not to mention tenant damage. If the deal is good enough, yes. Just know the numbers and timeline before you get into it.

And as @Elizabeth  Colegrove said, be prepared for some misery ;)

Account Closed · Answer

Yes I would consider it. I would  make the contract contingent on my inspection and a license  inspectors inspection.

You need to get all the facts to determine if it's an excellent purchase or not.

Ramon Jenkins · Answer

I would say remove bad apples ASAP.

Make sure to calculate one or two month vacant unit in your purchase price.

Example:

~~~~~~~~~~~~~~~~~~~~~

tenant x monthly rent is $750

tenant y monthly rent is $750

tenant z monthly rent for $600

$2100 off your estimated purchase

FYI: Some clients included legal fees and estimated cash for keys

off their initial purchase price.

Tanya Potter · Answer

@al Williamson

How much is typical to offer someone in a cash for keys situation?

Jean Bolger · Answer

Definitely consider it, especially for a duplex. If it were a big multi-unit maybe not! Too much carrying costs/hassle.

If this is your first property make sure you are being realistic with your numbers and factor in several months of holding costs without rent while you get the tenants out and  get the units rehabbed. Maybe it won't take that long, but you want to plan on the safe side. I think Al's advice about cash for keys is spot on. Give them the option of a carrot before you resort to a stick. Are you planning on using a property manager? If it comes to an eviction you may be happier if you have a pro dealing with it

Al Williamson · Answer

@Tanya Potter

Go for it! Cash for keys is the simplest way to get them out - and minimize damage along the way.

Howard Abell · Answer

You can consider this property. Are the tenants on a month to month lease or longer? If on a month to month you may be able to give them a 30 notice of non renewal. I would read the laws in your state pertaining to this circumstance. You may also make a deal contingent on the current landlord doing what is needed (the eviction) before you close. At 50% of market value in a good developing area (your words) you should be able to lease it in a short period of time. The landlord should be able to get you in to asses the property with proper notice to the tenants.

Good luck.

Rod Desinord · Answer

Their deposit should be transferred to you so began the eviction process and use their deposits to cover the months they aren't paying. And if its 50% less go for it!

Would you buy a property knowing all current tenants need to be evicted?

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