4-plex, tenants, and partial payments/evictions.

[Andrew Adam]

I close on a 4-plex next week. It is fully rented and the expenses are low, and even though the rents are low it is cash flowing nicely. We met with the landlord last week and found out that 2 of the 4 tenants are behind on rent, and All 4 are paying weekly or biweekly and call/text when they have another payment. I do not want to go down that road, On my duplex rent must be paid in full, due on the first, late on the 5th and I will start eviction proceedings if they still don't pay. What am I to do?

   My lawyer said we have to give them 30 days notice so if we notify them by the end of this month that we are not renewing their leases then they must be gone by the end of next month. Because we are not super desperate for cash, and don't have to make a mortgage payment till April  we can handle the turn over. Should I...?

  1. Offer 1 year leases to All 4 tenants under the condition that they pay in full on the 1st and if they don't then I might just have 4 evictions to do in April? Or even next month?

2. A:  Tell the two tenants that are behind in rent that we are not offering them a lease and give them 30 days to move ( do I still try to collect from them next month?) ??

    B: Offer the other two tenants a year lease and if they do not pay in full on the first start evictions?

Here is the thing. 1. I do not want bad tenants.   2. I do not want to collect rent on a weekly/biweekly basis.  3. I am ok with turning over the tenants    and 4. I want to stay legal.

My hope is that by summer I have 4 tenants that pay in full on time and are in a year lease. 

I plan on calling the tenants today or tomorrow to ask them about their income/ ability to pay rent on the first and then possibly after interviewing them to offer them a year long lease. 

Any thoughts?  

[Mike Wood]

@Andrew AdamOnce you close, I would meet/talk to the tenants and let them know that you will need a new application (I would not charge them) and vet them like any new tenant.  Its likely they will not meet your requirements, and once you decided that, kindly tell them you are not renewing their lease, assuming they are all month to month tenants.

You really have no idea why they are behind, maybe the previous owner let them know he was selling and they think they do not have to pay for some reason.

Tenants late on the rent should be given a pay or quit notice (with the number of days per your local laws).  If they are very far behind, I would offer them cash for keys, just so the whole thing is easy for all.

I would focus on the tenants that are behind first.  Not sure I would want to evict everyone at the same time, simply due to the fact that tenants could talk and get very frustrated that everyone is getting tossed out.  Unhappy tenants could lead to damages and other unpleasantness's.