Like Joe, I use those same techniques. You can find out all kinds of things about the property from the tenant. Some are real, some are exaggerated & some will even make you think twice about buying the property. Whether or not the comments are indeed true or not, is something you’ll have to decide for yourself. Sometime tenants will tell you anything to keep you from buying the property because they’re afraid their rents will go up.
The way I usually handle this, after doing the above, is after the sale, I’ll go & talk to them. Have to go talk to them anyway, cuz I usually have to increase the rents, if I’ve bought right. At that time, I explain what my rules are & have them sign an agmt. that stipulates that I’ve explained the rules to them. Some will get upset that rents are being raised & want to move, so I try & do these one at a time, in case they do move, I won’t be totally vacant. For me, this has worked out OK so far. I have thought about using that propety mgmt. technique written about above, buy haven’t done so yet.
I was wondering how some of you handle introducing yourself to existing tenants when you buy a building. Do you write a letter, knock on the doors, what? I need to let them know where their payments should be sent to and who to call etc. What’s the best way? Thanks!
We did our first last summer, a duplex, and the seller did not admit to the tenants that he was selling. The day of closing, I composed a rather formal, strict contract, and also a more friendly, personal letter, something to the effect of: “I am pleased to introduce myself and my husband as your new landlords. (fill in name, etc.) We hope to make this transition as smooth as possible, etc. We see that there are several repairs to be made, and these will be done one at a time, as funds permit. These will generally be done during work days, and therefore, we will from time to time be entering your apt during your absence. Your rent in the amount of $_______ will be due the 1st of every month. Payment should be made at (such and such address.) We look forward to a happy working relationship, and to getting to know each one of you. You may call us at this number between the hours of ___ and ___ for routine matters, and of course at any time for emergencies.”
After that, the meetings occurred whenever I happened to be working there, although if that wasn’t going to happen, you should just go by after they’ve had time to receive the letter to greet and shake. Not too hard.
Re: Closing on apt. house tomorrow, how to handle existing tenants? - Posted by Mark (SDCA)
Posted by Mark (SDCA) on April 14, 2000 at 11:45:37:
I typically do both… I try to introduce myself in person during the inspection. I write a letter immediately after closing telling them my policies and philosophy, giving them my contact address and phone numbers etc.
Then anyone I was not able to meet during the inspection, I try to hit with a follow up visit in the 30-60 days after closing…
I hate this part. I write a letter, and hand deliver it when I am introducing myself. I know I should use the idea that I am just the manager, but I feel like I am lying and just can’t. Anyway, I don’t want to be caught in a lie either. I am going to do this for my Corporation, however, because it won’t be a lie, I am just the President, and don’t own anything.
As was mentioned above, there are usually rent increases, and I handle them one at a time, but they all usually find out that rents are going up when they talk together. I give them my office phone number for calls, tell them they will deal with Jennifer on repairs, and not me. That rent is due on the FIRST without exception. That they can expect a 5 day notice on the third and I will not be delayed in rent payments. I also explain that I have bank payments to make and my bank will not wait, so I have to be strict. It is out of my hands. So, I still get the good guy/ bad guy thing working for me.
Good luck. Be friendly, and all business. After you state the terms you work under, ask them about their family, or comment on their furniture, etc. Don’t be a butt-hole. It’s win-win.
One suggestion I’ve heard and like is to tell the tenants you are merely a guy from the property management company instead of the owner. This makes it a lot easier handling tenant requests and complaints. That way you can listen to them and be very understanding (the good cop) and then warn them that this big company is pretty strict and sticks to certain policies but you will pass the concern on to them just the same. It gives you a lot more elbow room to work things out when they think you’re just the go-between for a big company; and they won’t get personal with you. That’s the theory anyway. I’ve never actually followed through on it because my wife - who does most of the real work - always blabs that we’re the owners (“pride-of-ownership” rears its ugly head).
Re: Closing on apt. house tomorrow, how to handle existing tenants? - Posted by JoeKaiser
Posted by JoeKaiser on April 13, 2000 at 23:19:50:
You missed a step in your due diligence . . . talking to the tenants.
BEFORE you close tomorrow, go knock on doors and with any luck, you’ll discover the really good stuff that only people living there will have knowledge of.
Tenants are one of the very best sources of info when it comes to the nitty gritty. You may want to take what you hear with a grain of salt, but ALWAYS talk to the tenants.
When we look to buy occupied houses, we always show up 15 minutes early for the appoint and spend that time chatting up the tenant. That’s when the real info comes out.
