HELP!! (Urgent) Tenants From Hell - Deal or No Deal

[Fredrick Hock]

Hello,

I just put a rental property under contract. It cash flows quite well, however it comes with 2 tenants who have a history of evictions (I just found this out today, after I had already put the property under contract). How would you handle the situation? I still have a few days to get out of contract via the Attorney Review Contingency.

The backstory...

The property cash flows quite well (about 12% with a property manager, or about 20% if I manage it myself), HOWEVER...

There are 2 existing tenants who will be coming with the property, and they both have a history of evictions. The tenants just moved into the property earlier this month (March 2019) & signed a lease to live in the property until next year (March 2020). This was already arranged by the seller by the time I had put the property under contract.

My attorney just did a search on the tenants today and told me "they both have been sued a couple of times for evictions. It looks like one of the suits was dismissed (probably because the landlord couldn’t serve them and they probably moved out), but a couple of the suits went all the way to judgment".

That said, how would you proceed? Would you get out of contract ASAP (via one of the contingencies)? Or would you still close on the property and somehow replace the tenants (if so, how?)?

Is there any way I can still buy the property & protect my interests? Especially considering that it cash flows decently?

[Jill F.]

What state are you in? is it landlord friendly? They might be ok, you never know. Go look up the eviction records and see if the previous landlords were claiming damage (you need to know how to do that anyway). You might be able to negotiate a discount in sales price for the cost of two evictions in your state.