Buying during COVID???

[Ryan D.]

Historically, my model has been to buy properties that have been mismanaged, and where there is value to add by bringing competent business/management skills to the asset to get it producing more efficiently. Almost always this involves eviction of some of the inherited tenants, typically b/c the previous owner didn't screen well (or at all).

With all the eviction moratoriums due to the pandemic (and it seems like its going to be this way for the foreseeable future), I feel like this model now carries unmanageable risk - it feels like there is no way to manage the risk of buying any property with tenants that you didn't screen (unless you hold the property debt free) but cant evict if they don't pay. 

How are you all managing the financial risks of buying during the pandemic? Maybe I've got my binders on & am not seeing a way around this wall. 

Note: I'm not interesting in debating the eviction moratoriums. At this point, its just part of the landscape - what I want to hear are strategies people are using to adapt & overcome. 

[Ryan D.]

What we've discovered is that although the eviction moratoriums are in place, this seems to only cover when tenants are not paying rent under the terms of a current lease - tenants who are not under current leases are considered trespassers & can be removed from the premises. So the tactic to which we have switched is letting all leases revert to MTM when they expire, & new tenants are being placed into MTM leases - no more 12m leases at all.

What this means in practical terms is that for responsible/paying tenants, nothing changes and life goes on as usual, but for tenants who decide to stop paying, their MTM agreement is not renewed at the end of the month, at which point they become trespassers & can be evicted.