Inheriting tenants in Connecticut - late on rent, cops & COVID.

[Christopher Kolasa]

I have a three family under contract in Connecticut. It is a side by side duplex with a ancillary unit (converted garage into a single family) and after running through it with my home inspector and contractor, it's looking like I'm going to need to put $40k into it in just safety upgrades (3 unfit falling over porches, deteriorated window sills, smoke alarms, second means of egress). The purchase price was $230k, it's making $3075 per month, I went in without seeing the inside, it's nearby to my other duplex in an area I like. It's a big cost but it's easy enough to figure out, ie here's the is the most I can pay, take it or leave it. I'm in the price of the inspection ($650). Hunch is current owner's have moved to Florida and looking to get rid of this headache and tenant fiasco, they don't want to deal with them.

Here is the cost I can't figure out: Emotional and financial cost dealing with tenants and possible removal.

Tenants are all month to month at this point. Unit 1 had a woman who was just down on her luck, hated the two other tenants (brother and sister), the unit had lots of wear and tear, saying she was on her way out and she's been there for 3+ years, paying $1075. Unit 2 was nicer, large family, but head of house was already telling me about her being behind and willing to pay extra $100 each month to catch up. She was working at a Laundromat so worried she's making 3x the rent per month ($1300x3=$3900). The bungalow was the brother, strong minded, paying $700 who was smoking inside the unit, he's been there for 3 years. The side by side units are very desirable spacious 3 bed/1 bath and the bungalow is a bonus. Eventful day concluded with the cops show up during the inspection arguing about someone keying their car, a sort of gift, a sign of future interactions maybe?

Besides the price tag of the need repairs, each unit seems to be equipped with challenge tenants. Lawyer mentioned it has costed her $600 to $6,000 for an eviction and up to 3 or so months. Compounding the issue, Connecticut is landlord unfriendly, and with COVID, no evictions can take place till end of August (this has already been delayed). What kind of discount could I request to take on this risk? Should I request the sellers to deal with the tenants? Or should I walk? What do you all think? Would be great to also hear from people with Connecticut experience.

This would be a great addition to my portfolio to add cashflow as I can comfortably estimate getting rents up from $3075 (current) to $3500. Thank you!!

[Theresa Harris]

@Christopher Kolasa  When do the current leases end?  You can add what you want to the new leases (following local laws).  Look up what market rents are and how much you can increase them if they are below market.  Until you close, you can't do much.  Get all the leases estoppeled and have the deposits and prorated rent in the offer.  You can't really do a background check if they are already occupying the unit.  You could ask to have the units delivered vacant, but that will cost and most owners would be reluctant in case you fail to close. You could try a larger deposit and write that the seller keeps $X of that should you not close after all contingencies are removed.  Talk to your realtor.