Making an offer on a Property while Tenants being Evicted

[Brandon Mclendon]

Hey, I have a question for the seasoned investors on here.  I am looking to purchase my first investment property in an upcoming area. They have been trying to sell the house now for quite some time, but just recently put it back on the market. The way properties are going in this area, its a hot market. I have to be aggressive in order to have a chance at getting a property. I decided to put an offer in on the property. The only caveat is the seller is going through an eviction for both sides (duplex) so I can't see what shape the property is in. I've lost out on a couple deals trying to wait and see the property.  We put in our clause that we won't start the due diligence until the seller has gained control back over the property. Looking for some advice - is the a smart move on my part or rookie mistake? Do I need to be aware of any other potential issues? At worse case scenario I lose out on my home inspection fee during the due diligence and I back out if it is to much to bare but I'm going with my gut on this. I know nothing about the house except the numbers look good. I'm pretty sure with evicted tenants there is going to be some issues that the typical renter would not neglect.

[Thomas S.]

It does not seem like a high risk based on your escape clause but I would be making a lower initial offer based on the sellers situation.

Based on a double eviction I would expect the present owner was a terrible landlord, completely burned out, and the units are most likely in rough shape. You need to be very carful that your desire to own does not override your business interests.  

Based on the history of the property I would take advantage of the situation once you have completed your due diligence and make a much lower offer. By that point the seller will be desperate to make the deal work and will likely be prepared to drop the price just to get the sale completed. This seller is exactly the type of landlord we want to take advantage of when investing. Leverage his suffering.