Posted by Jim FL on September 07, 2003 at 23:38:18:
Dear Inexper…
There are several ways that you can tie the deal up and proceed with eviction.
Since you are not a lawyer, or a broker, there must be some agreement with the seller, giving you this power.
The simplest way would be to just draft an option to buy, with the provision included that the option can be exercised once the tenants are out, and who will handle it.
You might even get the seller to deed the house to you, and take a note for the balance, which would be payable upon resale.
This would give you ownership of the house, and all rights associated with that.
Talk to a local RE lawyer, with experience in evictions and creative buying techniques.
The attny should be able to recommend some ways to get it done, and perhaps handle it for you.
Since you have admittedly never done an eviction before, it is best to have a pro handle it for you the first time out anyway.
This will help you make sure it is done right and legally.
A cheap enough expense, if the deal is as you describe.
I’d still try to get the seller to get the tenant out, as a contingeny in the purchase agreement.
Perhaps talk to attny’s first, and when she is signing, give her their contact info.
Obviously, tie the house up tight first, sure would not be fun for her to decide not to sell, once her problem tenants are out.
I met a seller who wants to sell a house she inherited a year ago and decided to rent out. The tenants have been making irregular payments since June when their lease ran out. She owns it free and clear and the price is right - $43k, needs about $8k-$10k in work, comps at $80k. My exit strategy is to wholesale it.
I am hesitant, however, because of the tenant in the property.
I see 2 options:
Wholesaling with the tenant there without inside access
Evicting the tenant, then wholesaling the property with full access
Here are my questions regarding these 2 options (please let me know if you see another way to do it)
How do I show a property to my wholesale buyers if there is a tenant inside?
How many days would I need to stipulate in my closing if I need to evict the tenant before showing the property? I am in Ohio and have never owned a rental, let alone evicted someone.
What’s the worst “likely” thing that could happen with this deal?
The owner mentioned that the tenants had the house rekeyed a couple weeks ago without notifying her, now she has no key to the house and has to rely on the tenant’s mood that day to gain access. This kind of stuff makes me nervous.
Re: Help wholesaling a property with tenants - Posted by Jim FL
Posted by Jim FL on September 07, 2003 at 22:23:41:
Dear?
I think you have two options here.
Make your purchase contingent on the seller getting the tenants out. (this might be tough, but you can use this to negotiate)
Get them out yourself, but make the deal better as a result.
A lower price, perhaps a terms sale, short term, giving you ownership rights, with a note to the seller, payable when you resell and the tenants are out.
Also, try to talk to the tenants.
See if they want to buy the place?
If not, follow the law, and serve notice, after the deal is tied up.
Explain to the seller that this will cost you to evict, and take time.
However, since they are willing to sell for a low price, less than the $43k if you can get it, you will take care of the eviction.
You just need to have the right to do so, and an agreement signed between the sellers and you should give you that.
Their lease is up, so check state laws about a “Notice of non-renewal” and serve them as soon as you can.
Call around and find a good attny who does evictions all the time…let them handle it.
You are right, it is much easier to move a house when it is vacant, so work from that angle…remember, the seller will have just as hard a time selling now as you will, for the same reason.
Use that to get a better deal.
Although $43k for an $80k house, is not bad at all.
Good luck, and let us know how it turns out,
Jim FL
Thank you for pointing out those points of leverage in the negotiation. Emphasizing the seller’s difficulty selling with a tenant inside is a good tactic. I will also put the eviction issue on the seller and use it as a bargaining chip in the negotiation.
With my wholesaling strategy in mind, is it possible for me to arrange a 60 day closing, evict the tenants without owning the house, then wholesale it in the last couple weeks before the closing? I’m assuming it takes 30-40 days to evict, this is a pure guess as I have never been through the process in Ohio.
This would seem to mo to be the lowest risk strategy. Any idea what documentation I would need the seller to sign to have rights to evict her tenant?
