Purchased a home with non-paying tenants

[Catalin Chindea]

Hi everyone, I just purchased my first flipper last week. At least that's the idea. The house has a non-paying tenant. Because of this fact, I negotiated the price of the home extremely low. Here is the problem. The previous owner made an agreement (on paper, and yes I have it) with one individual to rent the property for $900 a month or repairs to the house in that amount each month with the option to purchase the home. A month later this individual was sent to jail and he won't be out anytime soon. The owner made a verbal agreement with the individual's girlfriend for $600 a month. She hasn't made a single payment either. The previous owner (being out of state owner) didn't want to mess with the eviction as he would rather have someone live in it then have it abandoned. I'm assuming he was a buy and hold type of guy. Question is how do I evict these people? I don't want to rent it, I want to flip it. Any ideas?

[Michael Jones]

Originally posted by @Catalin Chindea:

Thanx Eric, yeah i have been told that before. I just dont believe in rewarding non paying tenants. They have been living for free for a while now and now i find it hard to give them my own money so they can get out... i guess i will save that as a last resort.

Cash for Keys is not a last resort. It is the quickest way to solve you problem and most likely the lowest cost to sovle the problem as well.

For example, $600.00 for a months rent...it will take at least two months to get an eviction if they force you to court. That is $1,200 lost rent. Then the court cost added to the $1,200. Damage to the unit because they are pissed off that you are throwing them in the streets.

I can go on with a sympathetic judge saying due to Covit and the economy they will have an extra month to find a new place, then cost of the sherif if you have to do a set out.

Or you can put emotions and principle aside and realize that it is business the same as if you had a bad hot water heater. I need a water heater and it cost xxx to replace this and fix my problem. When can the plumber begin work.

You have a business problem: You have a tenant that isnt paying rent on a house you want to flip and due to this you were able to save several thousand dollars on the deal. Now lose one of those thousands and wave it figuratively in the face of the tenant and if by say one week from today a walkthough is done and the tenant is moved out you will hand them the $1,000 and you can get to work you will be rewarding yourself.

Its business. its never personal and sometimes we have to pay to fix the issue.