Purchasing Multi with non-paying renters

[Jason Cote]

Hello, I’m in the market for a 3 family in a very competitive area. The price for these properties is around $600k; with each unit commanding between $1,600-$2000/ month in rent.

I’ve come across a couple properties that fit my criteria in all aspects, except one. At least one of the renters is not paying rent due to COVID. As a landlord, what options do we have in this situation? I understand that these tenants, in most states, cannot be evicted.

As a person that wants to purchase a property with one or more tenants in place, that are not paying rent, are there any good options? Losing out on $3,000-$5,000 in rent each month is not something I want to do. My mindset is that once a tenant is in this situation, they will not resume paying rent, even if their financial situation is perfectly fine.

It seems like the smart idea would be to pass up on this type of property, but I’ve come across more than one in this situation and it scares me. I don’t want to wipe out my reserves in the first year, because of this.