02-10-2012 05:19 PM - edited 02-11-2012 05:47 AM
So, I realize that this is far less than ideal. I'm very interested in a house that seems like it's being sold with a bankrupt tenant in place. The property is an REO. I know that the tenant filed for bankruptcy before they were served an eviction notice.
My question is - what can I do? Could one make a deal contingent on the bank getting the tenant evicted? If anyone has any ideas or advice I'm open to anything.
This is a property that my family would be living in - not renting to a tenant. I definitely could not carry rent as well as pay for a house with a non-paying tenant. I also probably could not afford much in terms of a legal battle.
02-10-2012 08:42 PM
Short answer is if the bank can't get rid of the tenant then you should not buy the house.
Long answer: Yes you can make the purchase contingent upon the home being vacant. The bank-owner of the REO may or may not accept the offer. It is in their interest to get rid of the tenant and they should be offering the tenant cash for keys. Since they haven't been able to get rid of the tenant means the tenant is fighting the process. With foreclosures the tenant gets a minimum of 90 days notice.
If you buy the property with the tenant you have to deal with the situation:
1) you will not be able to easily get rid of the tenant within 30 days of COE
2) by not achieving number 1 your lender will likely consider the property investment because they require new owners to move in within 30 days. As an investment property the lender will expect more down.
02-11-2012 05:50 AM
Thank you for your sharing your thoughts. After speaking to my Redfin agent (new to working to Redfin and with her) she said that they are working to get the tenant out. I'm hoping that they are succesful soon!
I'm going to look into the legal sice of it as well. Open question to anyone - I've been using the NOLO website for legal adivce, any other recommendations? I'm in LA and possibly should have posted on that board.
02-15-2012 07:12 AM
A lot of tenants that are bankcrupt too have been really persistent in staying despite them not able to pay their bills at all. Quite disappointing to them.
Self-Discipline will also be the standing point.
02-26-2012 12:36 PM
You should check the bank for the house and check for things that needs to be fixed, documents and other legal paprer at least a copy of the foreclosed property and the bacnkrupt tenant as well.