Ever buy property with a tenant?

[Brenden]

Have you ever purchased property with a tenant already living there? I haven't, but I know it can be tough to deal with. I know some people who would force them out eventually, and some who will let them stay there. 

What would you do? Would you ever consider buying a property with a tenant? 

[James]

Just did this in November of 2020. Purchased a tenant occupied home from a wholesaler. The owner was retiring and getting their estate in order and the home needed a lot of work. When touring the property I was very clear with the tenants what the plan was going to be if we purchased the place so the expectation was set. 

When the home transferred to our ownership I served a 30 day notice since we needed the house empty for a full remodel. Everything went smoothly and it seems the tenants understand that when a home changes ownership there will be change in same way. 

This worked out because the tenants were month to month of course if they had a lease that would have been honored. 

The tenants were paying way below market rate for rent and we purchased the home to fix it out and rent it out at market rates. 

[Justin89]

Nah, I wouldn't want to deal with it. My brother owned an apartment complex years ago, and he was going to sell it off, and wanted everyone out. One lady decided she didn't want to leave, and that became a burden on him. He had to go the eviction process, and that didn't work either. 

But yeah, ever since that, I never wanted to buy real estate with someone living there. 

[James]

2 hours ago, Justin89 said:

Nah, I wouldn't want to deal with it. My brother owned an apartment complex years ago, and he was going to sell it off, and wanted everyone out. One lady decided she didn't want to leave, and that became a burden on him. He had to go the eviction process, and that didn't work either. 

But yeah, ever since that, I never wanted to buy real estate with someone living there. 

Sounds like your brother lived in one of those super tenant friendly states. Here in AZ if things would have gone bad with my 30 day notice it would have been about another 30 - 45 days to have them out. 

I am not saying there is no risk with evicting someone and yes it does go sideways sometimes. We do have to remember though a majority of people are good and we are all just people. Conversation with someone and setting clear expectations goes a long way and a majority of the time things will go correctly. We will always hear about the negative sides to everything (the reasons that keep people from jumping). 

Yes there could be trouble buying a place that already has tenants. Yes things can go sideways. Factor that risk into your offer price and see if you can make a deal still :). Have a good eviction lawyer on your contact list to quickly get them involved if things go bad.