20 year Property Manager

[Fernando Barcelos]

Wading into the property investment waters. I know this is a new member intro. but I need advise on a home purchase. We found a single family house that is $260,000 below market, after further inquiry, we discovered the house has a renter which the seller wants the new buyer to evict. The house looks abandon and in need of some repair from what can be seen from the outside ( can only imagine the inside). I don't know the detail as far as the tenant paying rent or not, if there's a lease contract etc.

What questions should be asked before buying this investment opportunity?

[Rick Albert]

Buying a property in Los Angeles with a bad tenant is very costly and time consuming. 

To be frank, if this is your first investment property, I'd find another one. It could take you six months to a year to get them out and/or tens of thousands of dollars to do a cash for keys agreement (basically give the tenant money to leave). 

If it is that much below market value, then I would offer higher and have the Seller evict. It is not something for you to handle. 

If you are dead set about this property, some initial questions I would ask:

1. Why does the tenant need to be evicted?

2. Have you offered cash for keys before? If so, what was the outcome?

3. It appears the property is in bad shape, what can you tell me about the condition and is the tenant causing more and more damage?

4. What is the expectation of the tenant? Are they expecting to stay or do they know they are heading towards an eviction?

5. Has anything been started for the eviction? If so, where are you in the process?

Good luck!