Taking on a bad tenant

[Edward Smith]

I need your advise BP....Just closed a my first rental property yesterday. 1 hour after I closed on the property the previous owner told me that the current tenant has been late on the last 2 payments. and still owes $300. Before the deal was closed I ask her how the tenant is and she said fine.....not good. Anyway probably can't do anything about it now. I've had one conversation with the current and he didn't mention he had any issues paying on time. I have an in person meeting with him on the 3rd of March. The reason property was sold to me is current owner moved to FL and did not want to be a land lord anymore. How should I approach this meeting with this new info dropped on me? ...

Details of deal

7yr land contract 6%

rent $900

Sale price 3900.00

Current Value 70-80k ( 2 different comps with different agents)

Lease signed with current tenant 1/1/2017 

[Jennifer T.]

The tenant just moved in January and (I'm guessing) were already late on their February's rent and was trying to make up the shortfall with payments, but are still running late on those and still $300 behind?  Really not a good sign.

But, like @Deanna McCormick mentioned, that's money owed to the previous owner.  As of right now, they owe you nothing.  That's great you are meeting with them on March 3rd.  Assuming rent is due on the 1st, you will either already have rent paid in full or know there is a problem.

If March rent is paid in full at the time of the meeting, I would just explain whatever your "standard" is, ie rent needs to be received by X date or a 3-day/5-day pay or quit notice will be posted on the door.  If rent is not received in full by 3rd/5th day, you will start eviction proceedings.

If March rent is not paid or not fully paid, I personally would just want them out.  I'd bring up that I knew their rent was late with the last owner.  It seems this property is not financially feasible for them.  And then try to negotiate a move-out plan.  If you all can't work something out, then unfortunately, you're stuck dealing with an eviction right off the bat.  It happens.  It's a bummer.  But sometimes that's part of the cost of a good deal.

I bought a duplex a couple years ago where the owner's brother had been living in one of the units...for free...for over 10 years.  I knew that was going to be ugly and probably an eviction, but it was a good enough deal to take it on.  Fortunately, a 30-day move-out with $350 "cash for keys" was all I needed.  But the first time I met with him, although he was in the same room, he was too furious to even talk to me and had one of his friends acting as a mediator.  As an aside, I do live in a landlord-friendly state, so that does make it easier to consider an eviction as just part of the "getting a unit rent ready" process.