Considering Investing in Tenant Occupied Real Estate

    Real Estate investment strategyHere are some items that you will need when it comes to buying a tenant occupied property, where the tenant desires to stay and become your tenant.

    Current Ownership – things to consider

    If investment property is bank owned, and they are buying tenant occupied, make sure investor realizes the potential risks of non-payment and/or obligation to evict upon default.  Other concerns would be BK(bankruptcy) and/or determining whether bona fide tenancy exists.  
     
    If the clients are just buying a property that is tenant occupied, the most important item is to review copy of current lease and understand the terms, including any potential rent adjustments, or options to extend.

    Getting down to the “quick” relating to Tenant Occupied Investment properties:

    Most importantly:
    1. Your client needs to obtain current copy of executed lease and any addenda or extensions;
    2. Who holds security deposit – and it will need to be transferred with sale or dealt with utilizing a price reduction based on said amount if landlord holds;
    3. Payment history, and whether tenant is or has been in default on the lease;
    4. Is the lease fair market rental rate?
    5. Your client needs to request Tenant executed Estoppel Certificate prior to COE;
    6. Pet rights should be considered.
    7. Are all parties living on the property noted in the lease;
    8. Is there HOA, does tenant have copy of CC&R’s(conditions, covenants, and restrictions), and has tenant complied with CC&R’s without notice or fines during their tenancy?
    9. If it is month to month, investor should be aware that tenant can give 30 day notice to vacate, but Landlord must give 60 notice to vacate, if Tenant has occupied property for over 1 year.

    Investing in real estate

    Whether there is a current tenant in place, or you buy a vacant property, reserves are necessary for a successful investment strategy.

    The amount of your “funds in reserve” are going to depend on how long your particular state takes to legally enforce an eviction action against renters/tenants.

    They will also have to consist of the amount it will cost to hire an Eviction Attorney to handle any potential eviction.

    While a savvy investment realtor can help you, they cannot guarantee that issues won’t arise.

    Just make sure you do all of the due diligence before embarking with investing in Real Estate.

     

     

    Paris and Connor MacIvor

    Connor and Paris MacIvor are in the Top 1% of Realtors Nationwide, starting their real estate business in 1998 with RE/MAX Gateway - Santa Clarita Valley and Valencia CA. Their becoming licensed real estate consultants and representatives came from the horrible experience they had when they bought their first home. There were many things that the agent they had hired did not explain and disclose, which per law he should have. Getting that agent on the phone after they closed escrow and after he had gotten paid was impossible. Paris and Connor called the broker, the board of realtors, the office manager and all they received was the promise of a phone call back. The remedy did come, but not as fast and in the way they wanted. That act - that bad agent was the reason why Paris and Connor became Realtors. That was all they needed to vow to never let the same fate befall anyone else, that befell them. Today Connor and Paris are focused on client service. Protection and top-shelf service with regard to their real estate clientele. They primarily work within the Santa Clarita Valley and Valencia CA. However, for a referral, where 80+ of their business is referrals they have License and Will Travel to other parts of Ventura County, Los Angeles County, and Orange County to handle real estate transactions for those who trust their real estate operation. Writing on their Real Estate Blog is a passion. SCVnest.com/blog is where you will find over 10,000 real estate articles. Go to SCVnest.com/radio to listen to their latest real estate radio broadcast.
    Comments are closed.

    Contact Us Now

    Any questions, comments, or feedback

    SCVnest Radio Show (listen now)