All Forum Posts by: Garrett Spear

Hi @Caleb Clay,

Can I ask where you are in the process of your real estate investing? I operate in the Lexington market and would be happy to share my knowledge and contacts if there is something you are looking for specifically.

Interesting post, thanks for sharing!

Thanks everyone for weighing in! Here is an update on the outcome of this transaction following my original post: 

Unfortunately the Seller declined to pay any rent and only would give a $500 security deposit holdback at closing. I maintained that was not nearly enough, and tried to negotiate a higher number, but they completely refused to negotiate and instead decided to break contract and walk away from the sale. 

I was baffled at the speed they abandonded the contract. But I could not let myself be forced by strong-arm and bad-faith negotiation tactics.

I faced the tough decision to abandon the money I'd spent on inspections and lender fees. Not to mention the time spent. But the risk of the Seller living there after close with minimal security deposit was too great.

In April I got a four-plex under contract, sourced from the MLS. The seller/owner occupies one apartment and the other three units are used as storage. The seller took their time getting their loan payoff and tax information together, and we had to push our initial closing date back about a month. Frustrating, but not a deal-breaker.

We were scheduled with the title company to close today, but yesterday afternoon the seller's agent contacted me and advised that the Seller needs a 30-day post-closing occupancy agreement. They said that the seller hasn't moved their stuff out and hasn't found a place to stay.

I was surprised, but I replied that we might be able to work something out, if there was some sort of consideration: security deposit and rent payment. The seller is refusing to pay rent or security deposit, and now is threatening to break contract. I suggested we reschedule the closing (to give them time to move), which they also denied.

I feel that I am taking on too much risk and liability if I let the seller keep possession of the property. The extremely short notice and lack of security deposit or rent are also red flags for me. I don't want the contract to fall through, but I don't want to close on this property without being able to take possession.

What are your thoughts, BP? 

Have you ever been in a situation like this/ What would you do?

Hi Sara,

I would recommend you contact Stephen L Marshall, PLLC.

His blog, https://kylandlordlaw.com/blogs/news is a great resource for Kentucky landlords with articles and relevant news updates.