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Hello everyone,
I’d like to solicit people’s opinions on the following opportunity. A burned out landlord has approached me to master lease two properties: a) condo 2/1 and b) duplex 2/1 both sides. The duplex would be a great opportunity for the short-term rental market but the condo presents a sticky problem. Namely, it is already occupied with a problem tenant(s) who are not paying rent on time and have been late every month. The landlord’s lease is not bad but presents the additional problem that certain segments of it are not filled out (the second tenant has signed but was not named; method of rent payment is not specified; enforcement of landlord’s rights for a dispossessory is blank/not filled out). I cannot get the duplex without taking on the condo.
I realize I have to take on this lease subject to whatever lease I sign with the landlord. Has anyone had any experience with this type of situation? What is the best way to claw back the provisions of the landlord’s lease that were never specified or signed?
If I had my preference, I would go ahead and give these tenants notice and ask them to leave but the landlord is just barely keeping up with mortgage payments and doesn’t want to risk a vacancy.
I appreciate any thoughts or suggestions.
JeffCash for Keys!
Sounds like the tenant can barely afford this place anyway, so that means they have no money to move. Offer to give them $1000 to be moved out in two weeks. You may be able to get the owner to pay it or at least 1/2 of it.
Better to start all over again with the tenant YOU select and screen. In the end, the $1000 investment now, will make your life a lot easier than trying to deal with a problem tenant.
Of course, $ are not paid until they have all their stuff out of the house and it is inspected to be broom clean. they would waive their rights to a security deposit refund.
Jeff,
Smells like this pie is almost done. 🙂
Based on your description, the burnt out landlord is steps away from losing it all.Are we talking about a performance master lease?
Or a guaranteed fixed amount regardless is the tenant pays?Let’s put some #’s on the table for both properties and see where our time is best spent.
Mike
Jackie:
my thoughts were headed that direction… I’ll have to talk landlord into it. But, yes, they clearly can’t afford the rent as is.
Mike:
what I’m going to try and work out is a performance lease on both properties. On the condo, 50-50 split on any amount above PITI and with the duplex 50-50 split on any amount above $2K (no payments for 90 days). Landlord’s mother owns the duplex but has told her landlord to try out the short-term rental market with the property. The family owns five more properties but don’t manage them well so I’m going to try to be accommodating with this first opportunity to see where the others lead.Thanks to you both!
Jeff,
My advice would be to tell the owner that you will not take on these properties UNTIL that problem tenant is moved out. You could sign a master lease agreement to “lock it up” but it needs to have a contingency clause that you will not proceed until that tenant is out. Maybe offer the landlord $500 towards solving the problem.
Don’t make his problems, your problems.
If the owner says no, walk away from the deal unless you can talk the tenant into the “cash for keys”
Thanks, Jackie, I couldn’t agree more. Fortunately, it doesn’t look like I’ll have to come out of pocket to proceed but the landlord does need my assistance to get the place empty again. Hopefully, I can have the landlord see the light when we meet tomorrow to discuss the best way moving forward. One way or another, this does show the importance of tenant screening.
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