Hi
I am considering putting an offer on a 4 unit REO that was on the market last year and was pending and now is back on at the same price. There is one empty unit and one unit with a very low rental listed in the MLS and no other information on rental income. i plan to move in the vacant and my rental offset could pay the mortgage. But
What conditions could/should I include considering the rent information is not disclosed(unlikely known by the bank).
There will be a standard CAR offer form.
HI Kevin,
The listing agent for the bank will likely have some information and some disclosures about the rent. You will need to see all tenant information and find out if anyone is even currently paying rent. You will want a complete inspection of the units to see what deferred maintenance issues exist. Years ago I managed properties and when we took over properties for the bank it was my job to knock on the door and see who was living there and if they had copies of lease agreements, rent receipts, deposits etc. A conversation with the tenants will tell you a lot. In some cases I knew that I would be having to evict the tenants once we started requiring that rent was actually paid. This also gives you a chance to see if the tenants are combative.
You are moving into the property which will help with the rent control issues but know that doing battle with the rent control board when trying to evict a tenant can be very frustrating and costly. The rent control laws vary. Go down to the rent control board to get all of the information that you can. You may or may not be able to bring the tenant with the low rental rate to current market. The key will be to make sure that you handle everything properly and file the correct paperwork. A simple mistake on a rent controlled property can cost you a lot of money and time.
Thanks Michelle,
It’s in Los Angeles, the agent I am working with says the broker on the property will not give information. I under stand that is common.
If any of you have written offers on such a property could you give examples of what you included as conditions that are not in the normal contract?