Offlinewe are looking to do our first deal for cash flow purposes and looking at a duplex property with tenents.each paying 1000 per month.
the FMV is 123k and it lists for 105k. the neighborhood is ok. so the deal looks ok, but having never been landlords before we are hesitating not knowing anything about the existing tenents. is there a way to dig up their financial history? are we foolish to even be concerned?
thank you..bodeen
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What we have learned is there is nothing you can do with the current tenants but abide by the terms of the existing lease. However, you have every right to do a background check on them and should the report be unfavorable, you can decline the purchase of the property provided you have a clause in your purchase agreement giving you that option.
You have every right to be concerned
Depending on what state you live, the lease can still be effective event though ownership of the property may change and in others it is null and void and you can kick them out.
If I were you, I would interview each and every tenant and make your assessment of who you want to keep and evict. I would let them know you plan on raising the rent and if that will be an issue. Depending on their reaction should aid in your decision.
With the sellers, get the rental history of each tenant and ask to see their records on when they paid; they shoul have a logged in record of their checks or money orders and dates.
Tell your tenants you plan on doing a credit, employment and reference check to decide if you plan on retaining them. If you're not comfortable with the tenants walk away from deal
Hope it helps