New owner, tenant discussions

[Samuel Girouard]

Hey everyone,

So I am in the closing process of a three family. This will be my first real estate investment and I'm extremely excited. I have been living in the building along with my fiancé for the last 8 months. It just so happened the owner was looking to sell so I'm buying off market with a pretty good deal.

As I'm getting closer to closing (and I mean a week away), I wanted to let the only tenant in on what was going on as well as what changes he may see. One thing that definitely needs to change is the current rental agreement of a large area in the back of the building. He states he was paying extra for the area but when I spoke to seller they state otherwise. What would be the best way of making sure this area gets cleaned out? I have all ready spoken to him about cleaning the area out and has made little to no progress. They have a camper, plow, a boat and more. This is taking up what would be a parking lot.

Thanks,

Sam

[Andrew Freed]

@Samuel Girouard - Congratulations, good stuff! I would like to mention that it is "best practice" to not disclose your ownership but advise you are the property manager. That will add an additional layer of protection from blame during times of disputes. At the very least, it this was already disclosed, whenever you request items for your tenants, make sure to mention you "have to check with your partner" or use the word "we". This will allow you to empathize with the tenant more while placing blame elsewhere if need be.

Regarding the tenant utilizing extra space, you can provide a rental increase package to him since it sounds like he has a verbal agreement. If he has an active lease, you have to honor it until its expiration. A rental package includes a letter indicating why this change is occurring, similar comps in the area, and options that he can do, e.g. move out all the stuff in a month, pay a high month to month rate, a lower 6 month rate, or an even more reasonable 12 month rate. At the end of the day, this is a business and to truly be successful, you have to treat it as such.

In addition, @Sabrina Sanchez and I host a real estate meet up in the Worcester area. It's a free event to network with other local investors in the area. We also have a ton of great guest speakers. If you're in the area, come check it out. We hope to see there. BP link below. 

https://www.biggerpockets.com/forums/521/topics/974742-pints-and-properties-in-person-worcester