Would I Buy A Rental Property That Has Tenants Being Evicted
Abu's question: If as a real estate investor, would I ever buy a property that has tenants that are currently being evicted?
Yeah, actually in the MLS - Multiple Listing Service is where properties are listed available for sale. You'll find that these properties constantly, and I always see it as a huge discount. So you are going to add in the cost of the eviction, you should know how much the attorney fees are going to cost. So contact the real estate attorney, find out, get a quote for exactly how much it's going to cost for them to evict the tenants. Speak with the attorney, get an idea how long you're going to have to deal with these tenants in place and go without rent. But when I see these properties, I think discount. I think no other landlord is going to touch this property because of the dreaded word eviction. But the dreaded word "eviction" is merely a dollar amount, that you're going be without rent for two months, whatever the rent would be whatever your comparables show you what the rent would be and the cost of the attorney.
In Philadelphia here, the cost for an attorney is roughly around $700. So $700 and for example it was a $1,000 a month rental; I would just say it's going to cost me $3,700 to follow up and get these tenants out, if I can't give them cash for keys or convince them to move on their own. As long as I'm getting the property for deep discount, which I assume I'm going to, and the numbers add up, then there's absolutely no reason not to buy these. And again, the property's tainted by most real estate investors, so very few real estate investors will touch those properties. So by what kind of discount you're getting, obviously it would depend, but it can easily be tens of thousands of dollars.
I saw a property in a neighborhood here in Philadelphia, where the real estate agent did a horrible job, they wrote "An unknown entity has taken over the property." And it was just that one line. The property was being sold for probably about 70, $80,000 discount. And the agent I'm pretty sure probably ended up selling for that deep discount that everybody else avoided that property. I came really close to thinking about putting an offer on it because of that. You could clearly see how valuable this property was, and the only problem that is with that property is having to evict that unknown entity.
It's not necessarily unsafe. You basically will have the attorney deal with it. At some point you might have to get a sheriff deal with it. And again, as long as you put that money aside, then you should be good to go and enjoy your property and the discount. So absolutely, as long as the numbers make sense and it all comes down to numbers; you are an investor, so it always comes down to the numbers. Good luck!!!
