Hello,
I’m a new investor in real estate and there’s a property I want to bid on an auction, I can’t go see it because it says “REO Occupied, do not disturb tenant”, should I stay away from these types of properties? What would the implications be? After my closing they will still there and I have to take care of the eviction process? Is it too risky?
I would really appreciate any advice or case study on this matter!!
Thank you!!
Who says you can’t go to the property and see it?
There’s a deadbeat inside. Who cares?
Timid much? j/k
There are other ways around it. Get a hold of the assessor and ask for a copy of the assessors card. Do a search to see if the property was ever listed for sale. If it was, that should give you access to pictures of the interior. Park at the curb with binoculars and examine the roof line, foundation and window seals.
These will give you an idea of the condition. But, auctions have this degree of risk. Buying a home sight unseen can be too great a risk for some investors. You have to decide if you can handle it.
Okay, so the bank owns the real estate… If the property is occupied, of course it doesn’t mean you can’t go see it from the outside. If the property is really bad on the outside, it’s usually bad on the inside.
You minimize your risk because it’s always good to see it from the outside so you can both get an idea of how it’s like on the inside, plus you need to assess the neighborhood anyway.
Here is a good approach for trying to see the inside. Bring a $10 Starbucks gift certificate. Talk to the occupant. Be really polite. Say something like this, “Here’s a $10 gift card. I’m looking to purchase this home. I’d appreciate if you can answer some questions and maybe let me take a quick look inside.”
Offer them the card first… not explicitly as a condition of letting you in, just as an ice breaker. They will probably give it back if they don’t want to talk to you, but that’s not important.
If you couldn’t see inside, then you’ll have to bid as if you have to do everything to the house (carpet, paint, new kitchen, new bathroom… etc.).
Hope this helps, -George Krajacic
I really appreciate the idea given by George…
I completely agree with him… If the property is not good from outside then it will not be good from inside…
Rest you can follow the idea given by him…But there is need of lot of patience…
In some states, when a leased property is sold, the lease transfers to the new owner. The new owner mush honor the terms of the lease. You may not be able to evict, but instead you will have to decide whether you want to renew the lease at the end of the lease term. If the property is on a month to month rental basis then you may be able to give your inherited tenant thirty days notice that you are terminating the lease. Landlord tenant law in your area limits what you can do with an inherited tenant. Consult an attorney in your local area for specific guidance.
Well good question here it means, “Real Estate Owned” aka bank foreclosure. There have been a lot of laws passed recently which give tenants rights, even in bank foreclosures. So, if the tenant has a valid lease in place, the bank may be required to allow the tenant to stay in the home throughout the lease. Some banks prefer to keep the home off the market during this period and some go ahead and market the home occupied. The tenant has rights, and you will inherit the situation as a buyer. They are still worthy of looking at, but you will want to know the current status of the tenants rights before making an offer.