Brrrr with tenants on a lease

[Katelyn Gardner]

Hello,

First post here! I'm looking to do my first Brrrr on a duplex in Tx. Each side is a 2/1. Current rents are at 750/900. I believe I could get 1300/side after renovations. Duplex needs new flooring, new drywall ceiling, bathroom updates, new siding on one side. I believe the ARV would be 400k+. Repairs estimating 30-40k. The tenants are on a lease, I don't have lease details yet, but the duplex is in poor repair. One of the tenants was not happy to let us view the home. I wouldn't be comfortable being legally liable for taking over the leases and having renters live in slumlord housing under my name. Ceiling has water damage (new roof though), water heater is a fire hazard, etc. How would you get the tenants out after closing? Do renters typically agree to cash for keys? If so, how much would you offer to pay them to get out?

Thanks! 

[Steven Foster Wilson]

Quote from @Katelyn Gardner:

Hello,

First post here! I'm looking to do my first Brrrr on a duplex in Tx. Each side is a 2/1. Current rents are at 750/900. I believe I could get 1300/side after renovations. Duplex needs new flooring, new drywall ceiling, bathroom updates, new siding on one side. I believe the ARV would be 400k+. Repairs estimating 30-40k. The tenants are on a lease, I don't have lease details yet, but the duplex is in poor repair. One of the tenants was not happy to let us view the home. I wouldn't be comfortable being legally liable for taking over the leases and having renters live in slumlord housing under my name. Ceiling has water damage (new roof though), water heater is a fire hazard, etc. How would you get the tenants out after closing? Do renters typically agree to cash for keys? If so, how much would you offer to pay them to get out?

Thanks! 

 Hi Katelyn, 

Everyone has a price in which they are willing to move. I know you feel that about the property although they have choose to live there in that condition before you even came into that picture. I think it is good that you want to fix it up though. I always like to make sure my properties are in good condition. I would make sure you are planning for more than what you expect for renovations. It is always best to have worst case in your mind so you are not surprised or you do not start on something and cannot finish it. I have done cash for keys for one of my properties. I also helped another tenant find another property to rent that she was happy with so that the pressure was not all on her.