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Updated over 11 years ago,

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12
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Nichole Mollica
  • Chattanooga, TN
0
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12
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Tenant Occupied property deal... How would you proceed?

Nichole Mollica
  • Chattanooga, TN
Posted

I have a potential deal that I received a call from a bandit sign on. It is in a pretty strong value town, and it is a bulk of several properties. They are all free and clear inherited properties and most tenant occupied. This landlord is tired of fixing things, and just wants out.
Here are my issues:
The properties are owned by two siblings who inherited these along with a lot of other real estate.
The caller is the person managing the properties, tenants, rents, and repairs. He is also the Husband of one of the owners. He has told me that they all agreed to sell, but I have not spoken with the actual owners as of yet. (this I will address today when I speak with him.)
I have walked through ONE of the units, that was empty to see condition but not all units yet, as he doesn't want to "spook" the tenants and "empty the places out if they think we are going to sell."
He tells me they are all on 30 day notice, tenant at will status, no leases on any of the units. 4 of the 6 are occupied.

Ok... So. Here are my questions.
1.) Would you proceed and ask to walk through all units? draw up full repairs estimates and proceed with each property individually? or Would I be better served to just shoot him a conservative offer number based on a worst case scenario guestimate of repairs on the one and assume the same condition on the others? (he said this is the worst one, which is partly why it is not rented.)
2.) How would I proceed with this deal? As a wholesale or turn-key to landlords? The properties are worth much more as individual flips, but the trouble to get tenants out in the tenant friendly state of Mass. might be more than it's worth.
3.) I am thinking of bringing someone into this deal that I trust, and respect, simply because this is a big deal and I don't want to screw anything up and lose it. Would you (if you have never done tenants or anything bulk) go it alone or bring in reinforcements who can help steer this deal in the right direction?
4.) Knowing there are no leases, and he doesn't want to "spook" his tenants because he thinks they will stop paying and move out, makes me a bit worried about other issues that may arrise from tenant issues like security deposits and verbal agreements that I will be expected to uphold if these tenants aren't gone by the time this is put together at a closing table. How would I present this to possible buyers?

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