Steps for Acquiring a Turnkey Investment

[Cameron C.]

I have  a verbal agreement in place to purchase the 4BR home I currently rent from my landlord, which I would then continue to rent out to my other 3 roommates in order to ensure I'm cash flowing each month, covering my obligations etc.

I would love some perspective on specific steps I should take as it relates to taking over a property that will have existing tenants, leases, security deposits etc?

For instance, I understand the lease will transfer with the sale of the property and I can have them sign a new lease when it expires but a couple specific questions I have are...

1)  Should I draft adjustments to the lease and have tenants initial to update owner information etc in the interim?

2) How should I handle the security deposit the current owner has?  Keep it separate from the purchase price and have a check transferred outside of the closing room as a separate transaction?

3) Because I'm a Realtor, I've already sent over "Seller Disclosure" paperwork but are there other due diligence documents I should have completed prior to submitting an offer?

Thanks in advance for any advice you may have!

Cam

[Ross Schneider]

@Cameron C.  Some good questions. 

1.  I think that would be a good idea to update them with your information.  I would consult a real estate attorney before making any changes to the existing contract.  

2. It might be easiest for the current owner to escrow the deposit check with the title company.  Once it closes, it will then be given to you.  

3.  Other than a sellers disclosure, I'm not sure what else you can do.  Have you had a contractor check out the house, or have an inspection done? Since you have lived in the house, have you noticed things that don't work? 

Hope this helps some! 

Ross