Buying a Six House Package Deal -- Need Transition Advice

[Ehab Shoukry]

Hi  all -

I am a relatively new landlord who currently owns two rentals.  I'm off to a good start with these rentals--I ran background checks on my tenants, collected a full month's security deposit, setup online bill pay and have good tenants who are paying on time.  So far so good!

However, I am buying six houses from an investor who is moving to another city and is ready to  sell.  Four of the six houses are section 8 and the owner has already told me that he has put effort into collecting rent from the current tenants.  His handyman goes around every month and persistently knocks on doors until the tenants pay.  The good news is that the tenants portion is around $50 and section 8 pays $950+.  Even though it's a small amount I still planning on collecting it.  He also only collected a $200 security deposit from each tenants.  All leases have expired on the six houses by the way.

Here's my question...how would you handle the transition process once I close on these houses?  I want to sign new leases but don't want to sign leases with tenants who are slow to pay.  On the other hand, 95% of the rent is paid by the city so I don't want to lose the tenants either.  I was thinking I would send change of ownership letters and then give each tenants a three month trial before allowing them to sign new leases.  I wasn't planning on making them fill out rental applications and running the usual checks on them since they are already tenants.  

Thanks!

Ehab

[Al Williamson]

Hi @Ehab Shoukry

Yep, you're going to need to re-train the slow paying tenants or move them out. No way around it. I'm not optimistic about re-training them. Once they have bad habits, they need a hard reboot.

Factor full transitions into your budget.