All Forum Posts by: Fatima Champagne

Buying a property with existing tenants is not risky like others have said. If you get a rent roll, profit and loss, leases and monthly bank statements that shows the payment history of the tenants, there is no reason to believe they will all of a sudden become bad tenants. 

Raising rent is possible as well if the my are under rented. Raise one tenant at a time when their lease expires. If they move out, then renovate the unit and ask for the new market rent. Then repeat.

@Fatima Champagne Existing tenants CAN BE a problem, unless you happen to know the seller had a thorough screening process (hah!) For that matter, new tenants can be a problem sometimes, despite your most excellent screening. Personally, unless I get information contrariwise, I give people the benefit of a doubt. I've read stories on BP where one tenant was great, and another was a pain. Do what you can to keep the good ones, and encourage the others to live elsewhere.

When purchasing occupied properties it is all to often necessary to evict or non renew leases. Inherited tenants simply do not always work out. You will find this is especially the case with long term tenants since the present owner has likely ignored the operations of their business. Beyond cashing checks they have likely had no involvement and the tenants will probably cause issues for a new owner. 

What I would do is purchase a property with two empty units or one empty and terminate one other after purchase, leases permitting. You then reno one and live in the other. Once reno is complete you move to that unit and reno the one you moved out of, rent it when completed and non renew another tenant to reno it etc. until all units are renovated and rented to new tenants. All existing tenants must  ultimately leave. This is the advantage of purchasing properties with all M2M leases.

 You can then move on to your next property.

Originally posted by @Brad Sicoli:

@Fatima Champagne

Whether or not a unit is vacant is irrelevant. When you go under contract ask the seller if any of the tenants have been a problem. In my experIence they have offered honest feedback and they even offered to evict them for me before closIng.

Also, “owner occupied” is a requirement for primary residence mortgage for 2-4 units. It is something you tell an underwriter. After the loan closes, you know, live where you want...

Failing to move into a property with a primary residence mortgage within 60 days is mortgage fraud... a felony punishable with prison time.

Don't take this advice.

@Fatima Champagne one thing to consider is how well the existing tenants were screened. Inadequately screened inherited tenants can be a real source of grief and frustration to say nothing of ruining a unit when you finally evict them. Or they move out one night and leave you a parting gift!

@Fatima Champagne

The main drawback that comes to mind is possible (likely?) evictions, unless you just get very lucky with the quality of the current tenants. So I'd mentally prepare for that.

Is the property in bad shape, or just "meh" shape and you want to fix up up and make it top-of-the-line to force the value up?