Buying a property, existing rent agreement cant be provided to me

[Alex Parish]

Hey everyone, I am buying my first 4-plex property in rent controlled Los Angeles. This is a probate sale with every strange twist you can imagine, however I have gotten to the point where my offer is in lead position and is likely to be accepted. One of the issues regarding this probate sale is that no one, including the executor of the estate, has access to any rental agreements or past payment history prior to the estate taking over except possibly for the estranged ex husband that refuses to cooperate. The rent being paid to the estate currently is essentially what the tenants claim they were paying prior to the home owner's death, but they all seem to be paying in cash and paying an amount way under value for the area. These re the rents I stand to receive once I take ownership. 

Is there any way I can determine the actual rent these tenants were paying prior to the original owners death? If there are no lease agreements being provided to me, does an agreement exist after I take ownership or are these tenants considered month to month? The tenants can sign an estoppel, but that only acts as a support to an existing agreement, correct? Do I have any right to evict these tenants if no lease documents can be provided to me, and if so am I responsible for the relocation fees? It also seems no one has paid Rent Stabilization Fees or kept the rental registration up for the city. 

I do not want to remove them, but the investment does not make much sense at the rate they are claiming to be paying. Any help is much appreciated!

[Chris Mason]

If it were me? Ya know what, I like being 0 out of 10 on the sketch factor. But this deal is already 4 out of 10 on the sketch factor.

I'd roll with it, and ratchet it up to 5 out of 10 on the sketch factor, and here's how. 

Tie it up in contract with an X day inspection contingency.

On day X-1, I'd submit my counteroffer that includes two things and one alternative:

- Whatever I want to negotiate on, re: inspection results. I'd make sure that I or my realtor sent the listing agent the full inspection results, in writing (email and/or certified mail).

- All leases, for all tenants, and 24 months of rent payment history for same.

- If they can't that come up with that paperwork, I'd take a ridiculous reduction in price as an alternative. Or I'd walk.

Or they can put it back on the market, having just wasted X days, and with the stigma of being a property that was in contract and fell out due to inspection results, and because you sent them the inspection results in writing they lawfully MUST disclose all material defects of the property to any future buyers OR they expose themselves to a crap ton of liability. 

That's how I'd play it. Probably about an 80% chance they wouldn't be able to cough up those leases and rental payment histories, which would mean that I either walk or get that stupid-high discount. So don't fall in love with this property. 

As for HOW they cough up those leases and rental payment histories? When there's a few hundred grand on the table, and you've got it tied up in contract, sellers have an AMAZING ability to suddenly cough paperwork up that they previously said was impossible to come up with. That's their problem, not yours. 

Note that as a lender, I only work on the buyer's side of transactions, so IDGAF about what is "fair" to sellers. It's not at all fair that I sent those inspection results to the seller for no reason other than "do what I want, and figure out how, or it's scorched earth," but that's how I'd roll in your shoes, given that this transaction is STARTING at 4 out of 10 on the sketch factor.