1st future rental and inherited tenant help

[Alfonso Mora]

Greetings everyone! we are getting ready to buy our 1st property (duplex), we are going to check a duplex in a few days,this one has both sides occupied, they're on a month to month lease, now my first question is while checking the place what are the most important things we should look for? roof and ac are a must for sure, second question is since we are gonna live there that means one family will have to leave and we have to decide which side we want so how do we approach this in the most delicate manner? and third question is whats the most important to ask the seller about inheriting a tenant? any help would be kindly appreciated, thank you!

[Sam LLoyd]

This is how I would go about it.  In your walk through, make a decision about which tenant takes the best care of the property.  Also, you'll find out from the seller if they are current on payments.  Usually, the tenant that takes the best care is on top of payments... that's the one you want to keep.  In your contract, you need to have the seller give the tenant notice, and get them out.  For me, it's worth waiting a month to have someone else make sure that the unit is vacated.  Another thing to note... if you have handy, and/or plan on doing remodel/upgrades, you'll probably want to move into the unit that needs the most work because you can do the work while living there without have the cost of a vacancy.

Inheriting a tenant:  You'll need a copy of the lease... read this carefully, so you'll know what' you're obligated to, even if the tenant hasn't.  You'll also need to get an estoppel signed by the tenant that is staying.  This is a statement that there are no other agreements in place.  For example, I have an inherited tenant who... after our closing told me that the previous landlord had promised to do some repairs, and when was I going to do them....  I am not responsible for promises that the previous landlord made, since the tenant signed the statement saying that there were none.  Fortunately, in this case the previous management didn't tell their handyman it was sold, and he finished his work.

That's all I got.  Good luck on your next step into real estate investing.  You might loose some sleep over it, but if you stick with it, the returns will be great.

[Nathan Gesner]

Part of your inspection process should include a review of the lease agreement and other documents, payment history, and a complete inspection of the unit. I would also meet them and talk to them personally since they will be your neighbors. I would keep them on a month-to-month lease for a while until you see how it works out. You can ask the owner about payment history, lease violations, and other things but you can expect them to lie about it.