Advice on JV and on buying a building with OLD tenants

Advice on JV and on buying a building with OLD tenants

Rental Property Investor · Fredericton, NB · Member since 2019 · 16 posts · 2 votes

Two things I am desperate for advice on! 

A) I just bought two 6 unit buildings in a part of Canada with medium strictness for tenanancy, impossible to evict tenants without cause, can’t put rent up without major renovations ( a coat of paint won’t do) and there is a tenant that has been there for 25 years , paying insanely low rent, and he called me asking when he should leave as I just bought the building? Obviously I can’t just tell him he has to leave because I have to honor the lease he has signed but anyway I could talk to him? Not sure he could ever find a place for similar rent. 

B) I own my 20 units right now in a JV 50/50 and I do all the managing but when we get to a higher number of units I'll pay myself a salary and I pay myself for any extra other than collecting rent or small tasks right now. I just had one of the Investors that gave me a PML for the down payment of the two 6 units ask if I would be interested in doing a JV with him and again I would manage... does anyone have experience with buying a building JV and where I find the deal, I have the team and I will manage I wouldn't put any of the initial down payment down?? My JV partner would and I would be the operating partner and still be 50/50 on the deal? Any advice or ideas??


thanks everyone for reply’s, I know the Canadian rental rules aren’t familiar with everyone and this is a new province I just bought in so I am not that familiar I’m just seeing if I could sit down with this guy and maybe offer him some cash to leave ?

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  • Real Estate Broker · 3412 S. Harlem Avenue Riverside, IL 60546 · Member since 2015 · 6k+ posts · 5k+ votes
    6y

    @Alex Jamael when it comes to long term tenants there are the rules, and then there is the personal soft skills part of managing. It sounds like the tenant is willing to move out from your post and may even be expecting it. You might mention how the rehab you are having to do is extensive and would be very hard to live through. I often times try to make the rehab, the city, the city inspector, or some other nebulous "they" the bad guy. Then I say I wish they could stay forever, but I really have to address the last 30 years of issues. This has worked for me several times when I have taken over more tired buildings. 

  • Rental Property Investor · Fredericton, NB · Member since 2019 · 16 posts · 2 votes
    6y

    @John Warren Thanks for your reply John. I think the rehabbing reasoning is definitely best, and the renovations are needed. Will follow this route. Thank you 

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