Closing on first Multi in a few weeks

[Michael Healy]

Hi all, So I'm closing on my first multifamily in a month. It's a big divided Victorian house in a lovely residential neighborhood in Massachusetts. There are six units with tenants all in place either on lease or month to month. What sort of things should I be doing in terms of information gathering and reaching out to new tenants? I did all the due diligence on leases and rents and such. Is there a specific set of items you would request from the previous landlord? Is it weird to reach out to tenants before I've closed? Many thanks.

[Ann Bellamy]

Personally, I don't officially contact the tenants until I own the building.  What if the closing doesn't happen?  The seller won't be happy with you, and the tenants will be confused.

Then I send or drop off letters to each tenant, including the following:

1. My contact info and what to do if there is a service request
2. How to pay the rent
3. Confirmation that I (or the company that now owns the building) am still holding their security deposit
4. Reassurance that I have no plans to remove good tenants and don't plan remove anyone to occupy one of the units (tenants are afraid you are going to remove them to either move in yourself or move in friends/family)
5. If I have any improvements planned, I let them know so they know the property will get better, not worse
6. Finally, I tell them I will be meeting personally with them to answer any questions and discuss any problems or concerns and so we can know each other.  I ask them to contact me to set an appointment.  Usually they don't, so I call them.  
7. If I am presenting myself as the new manager, if the property was purchased in an LLC, all the above still holds true, I just don't happen to mention that I am the owner.
8. Then I follow up and meet with each one.  I'm not at all making friends with them, just a professional courtesy visit.  It allows me to see the condition of each apartment again, make sure I have all contact info for the tenant, and set expectations for on time rent payments and how to request service for repairs.  

This is just me.  Most people don't do this.  If they are good tenants, I don't want them to leave.  Years ago I sent rent increases to all the tenants when I bought a building.  That was a textbook case on how to empty out a building.  Lesson learned.  Reassure them, don't leave them worrying. 

If you don't want to meet with them, you can accomplish some of this with just letters, but I think face to face is better.