Inheriting Tenants: Instant Cash Flow or Huge Headache? (Rookie Reply)
Summary
This BiggerPockets podcast episode discusses real estate partnerships and inheriting tenants. For those considering partnerships, understanding debt versus equity partnerships is crucial to protect your investments. Hosts also discuss strategies for handling inherited tenants in a duplex you plan to owner-occupy, including cash for keys.
Key Insights
- •Inheriting tenants means you didn't screen them, and it is hard to get a tenant out of a property before their lease is up.
- •If a tenant has a lease, it can be very hard to get someone out unless there is nonpayment of rent or the lease is up for renewal.
Action Items
- ✓If inheriting a tenant, check state laws regarding tenant rights and lease termination, especially when owner-occupying the property.Effort: lowImpact: medium
- ✓Before purchasing a property with an existing tenant, consider asking the seller to offer cash for keys to vacate the tenant, or negotiate a cash for keys offer to the tenant yourself.Effort: mediumImpact: medium
Common Mistakes
- ⚠Be aware that if you're the seller, offering cash for keys could lead to a vacant property if the sale falls through, which can cause delays and difficulties.
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