Buying a property with bad tenants

[Jennifer Fernéz]

Hi all,

I'm new to investing and saw a 4-unit property this week.   I like it and the numbers look decent.

Pro Forma is 7.21% and CoC ROI is 10.04%.

However one of the tenants is late for rent ($1,000 in late fees this year), a smoker and their unit is hard to even be in.   It's the biggest unit of the 4 with the highest rent.

What can I expect with this tenent?   They are month to month.   What is the etiquette in evicting?   Sorry to sound cold.

[Stuart Udis]

Make vacating the unit a condition to close in your offer. Much better you place the burden on the seller than accept the responsibility. Maybe the seller rejects the term but until you ask you don't know. Also,  make sure your turn over costs account for the smoke damage. The odors are not always easy to eliminate within the normal apartment turnover routine.