Inheriting problem tenants?!?

[Mark Douglas]

I thought I found a solid deal.....FHA owner-occ on a 4plex.. I had been asking to see the rent roll, and finally got it. Here's what I found:

1)  One tenant has been leasing for 8 months and has had 3 late pays.  Currently going through the eviction process, but his lease doesn't end till 01/31/2016  (I was wanting to close before the new year)

2) Two tenants are leasing (separate units) but they've got 4 late pays between them, and they haven't rented for a full year.

3) PM company (which I will let go upon purchase) charges late fees inconsistently, and in varying amounts.

The only positive thing was a 2 year tenant with 0 late pays, but her lease ends at the end of the month.

Is the problem with the tenants, PM, or both??  (I'm keeping in mind that HOPEFULLY the tenant going through eviction will be out by Feb 1, and that since I'm occupying a unit, one of the tenants in complaint #2 will be out)

I don't want to buy a headache..

[Sarnen Steinbarth]

@Mark Douglas

You could make the purchase contingent upon the current landlord / seller having the problem tenant removed prior to the close of escrow.  

You could then hold back (escrow funds) of a given dollar amount (e.g. $5000) that could be used to offset your costs if the tenant is still in place at close of escrow.

The buyer may not be willing to accept this, but I have done similar things in the purchase of multi-family units.

Regardless, make sure to the have tenants complete an estoppel statement so you know that everything regarding the tenant's lease agreement is correctly represented.