Don't do it! If possible you always want to buy properties that are fully vacant. A number of issues come into play during and especially after closing which sabotage your plans for the property. Even if you buy at a good price - an inherited tenant can quickly compress margins and take up a substantial amount of your time. We ran into this issue when purchasing a 2 family with an illegal attic apartment in Newark, NJ. The property was fully occupied - meaning the 1st unit, 2nd unit, and illegal 3rd unit all had tenants. The tenants were not interested in moving hence were uncooperative and creating the following difficulties:
All of these issues and more are reasons why you should never get involved in a property that will be delivered with tenants (unless they are willing to go on leases before closing and you are are able to complete your own vetting process before doing so). It is better to put in the contract when you receive an accepted offer that the property will be delivered with absolutely no tenancies. Contact us to find out how we can help you.