How To Wholesale Occupied Properties

What best practices should real estate wholesalers keep in mind when wholesaling occupied properties?

Occupied properties can present some problems for real estate investors.

So what are some of the situations in which properties may be sold, while they are still occupied?

What’s the best way to deal with tenant occupied properties?

How can real estate wholesalers minimize risk, and boost business when dealing with these?

Occupied Property Scenarios

Sometimes properties may be occupied by renters. Some that are paying their rent and some that aren’t. Provided they are paying their rent those houses you are wholesaling are income producing properties that may attract buy and hold real estate investors. In other cases the motivated sellers current tenants may not have paid the rent nor moved out yet and are looking for a new place. In other distressed situations ex- homeowners may still be occupying a foreclosure or REO. Then there is the squatter scenario where family members or strangers have moved in, and are taking advantage of a property that has been deemed vacant.

Tenant Occupied Properties

You can’t just kick tenants out if they have a lease and are paying. Often sellers are trying to get rid of properties because tenants are not paying, even if they aren’t sometimes landlords won’t tell you that. Make sure the lease information is accurate. If there is a problem tenant make sure the issue is handled before settlement.

Owners and Family Members That Want to Stay

Some sellers may be distressed and really have a need to sell. But that doesn’t necessarily mean they want to move. In fact, that may be the last thing they want to do. We’d all love to help every individual and family stay in their home. That isn’t always possible. Some will ask for a leaseback or buy back provision, others will just try to stay. Don’t allow it. Some have successfully fended off big banks, and their legal teams for years.

Some real estate investors may say well, I will pass the problem onto the next buyer, so why should I care? You have to. At least if you want to stay in the business. Your relationship and reputation are still on the line. If you stick end buyers with bad deals they aren’t going to come back for more. They’ll block you and tell everyone they can online and locally to avoid you like the plague. You want it to be good for them too. Some will take it on, but make sure you disclose the situation, and that they are okay with it.

Summary

Wholesaling rented properties can be a great deal. But not all occupied properties are good for flipping. So make sure anyone except good paying tenants are 100% out of the property before signing and closing. There is a more advanced method I call the “Wholesale Dance” that I will share in the near future.

I”ll See you at the closing table,

Marcel Umphery the “R.E.I. Successmaker”