Buying Out Existing Tenants

[Mark Anderson]

Currently looking at buying a 4plex however many are fully occupied and i would need to occupy the house within 60 days so my option would be cash for keys. Does anyone have some recommendations on how to pitch this to them

• Show the benefit to the tenant for compensation of money 
• Help connect the tenant with a property manger that could help them find a place
  • How much money should i offer 1 months rent?
  • Should i still take some of their security deposit if the place is in decent shape
  • Should i share with them the fact that i need to occupy the place for a cheaper home loan loosing leverage?
  • Is there any legal leverage to give them 60 days and tell them they have to vacate?

Would appreciate any past experience or opinions

[Nathan Gesner]

@Mark Anderson don't be so quick to give away the farm!

If a tenant is on a month-to-month, make it a requirement of your offer that the Seller provide you one unit vacant. It's best to do this before closing so you don't buy the property and then have to work hard to get someone out.

If nobody is on a month-to-month, talk to the tenants and see if any of them want to break their lease willingly. They may volunteer to leave early without you paying anything.

If they are all under term leases and nobody wants to leave, offer them cash. My recommendation is that you NOT hand them cash and then expect them to leave. Maybe pay equal to one month's rent up front so they have funds for a deposit on a new place and then pay another month of rent after they are out. Treat the security deposit separate from this deal just like you would with any departing tenant.