Inheriting Tenants but current landlord/seller seems sketchy

[Shandrea T.]

Hello!

We have a home under contract and based on our numbers it cash flows quite well. The current tenants are pretty gross and don't take very good care of the place, but since its cash flowing well we were planning to keep them on for a few months then look to refresh in the spring and find new tenants. Some red flags for me from the seller is that they just sent us the Zelle information they received in an email, then for about 5 of those months they just put that the tenants paid in cash. We went back to them and asked for either the actual receipts or their Schedule E 2019 tax form. They sent over paper receipts not sure how much I really trust them though. The other issue is that the seller doesn't have a move in sheet, and when asked to provide a current walk through with the tenants to sign off on damage, as there was a lot, and all they sent us the pictures they had on the MLS listing prior to the tenants moving in and a letter signed only by the seller stating that these pictures were taken prior to move-in. This doesn't cover the light fixtures that need replacing or a section between the between bedrooms where the carpet is tore up because of the door not having enough clearance to open properly, walls that have been damaged etc.

Does anyone have any insight on how to handle where you don't trust what the seller is providing as far as payments or when they're being difficult in regards to documentation for the damage that was caused by the tenants?  Also curious if you think those cash payments could actually be non-payments?  I wasn't sure if that's common for sellers to fib on that part or now - still pretty brand new at all this.

Any help is greatly appreciated!

Thank you!

Shan

[Bjorn Ahlblad]

@Shandrea T. I would have the LL and tenants sign Estoppel Certs agreeing to rent amounts and payments. I would absolutely seek help from your attorney regardless what the seller may say. If you are dealing direct w/o a realtor you will have problems getting disclosures etc. Don't go leaping into this thinking there is cash flow-verify!

Get a professional inspection. Make or amend your offer to be contingent on inspection of financials and property. If you suspect the seller is sketchy you can be sure that he/she is. If you can't complete the deal to your satisfaction walk away. Real estate can be extremely risky so don't take chances and don't trust the seller or seller's broker.

No deal is way better than a bad deal. This one is very likely to blow up in someone's face. Hope it is not yours.