Renting to Seller after short sale - do you need to have them leave the house first?

[Ted Bloomfield]

I have an offer approved for a short sale and am just waiting for the final paperwork. The seller wants to stay on in the house and I have no problem with that, The bank contract says they must leave. How earnest are banks in checking on this? Can the seller move out and then move back a short time later? Any other thoughts? I am from out-of-state and have no relationship to the seller in any way.

[Jon Holdman]

The sellers need to leave and never come back. End of story.

Yes, the bank may check and discover the fraud you've committed. Since they've taken a bath on the deal, they're not going to be sympathetic to you.

For a rental to be cash flow positive, the rent needs to be 2X the P&I payment. Even if you buy at a significant discount, once you double your P&I payment to get to a good rent, their rent is not likely to be much less than their previous PITI payment that they couldn't make.

Just say no.