He is right, tenants do get a little spooked at a property sale as they do not understand the biz we are in, but with effective communication and relationship building with the tenant through excellent customer service would certainly minimize that or eliminate it all together.

With regard to potentially losing the deal, I think you are all right it could spook or aggrevate both the seller and the tenants.  

The unpleasant reality is that that spooks some of the tenant population. 

Too many foreclosures will spook banks, causing them to tighten up on loans - especially cashout refinances.So, tap your equity now, you can always refinance when rates drop in the future.

Many folks just get spooked and pay up.

Ever see that commercial where the three young adults get spooked and run and hide in an open garage behind a bunch of chainsaws hanging down.......then the the real threat just looks at them and shakes his head?

China collapse, China/Taiwan, China production moving to other countries, Ukraine/Russia war, Ukraine/Russia fertilizer and wheat, Panama Canal water levels, US debt versus GDP, US illegal immigration, US Baby Boomer social costs coming on line, Stock market P/E ratio.   

You were probably spooked by talk about HELOC deductibility under the new law.

We could never stop Russia from taking Ukraine back or China from taking Taiwan (semi-conductors) back. 

I bailed (spooked me) that one so fast wholesale style it would make your head spin.