Tenant occupied investment opportunity

Hello welcome to Todd Miller TV. I got asked a question through YouTube that somebody was wondering about buying Investment properties that already have Tenants in them. So, as you’re probably aware, there’s two ways you could buy a property. You can buy it vacant, or you can buy it occupied. If you buy it vacant and it’s an investment property, you either have to flip it or you have to put a tenant to it to make money. But if it’s already occupied, that’s sort of a benefit. And somebody would ask like: What are the new months is? What do I have to do? So, I did a quick search in the MLS, and I found out that there are 2,724 properties which is quite a few that are actually/they have a tenant in them. And the great things about this are, the tenant already has a Lease. So, when you buy the property, you have a tenant in place. So that means on day 1 you close, you get prorated rent for the rest of that month. And then you start collecting rent right away. You don’t have any vacancy. What a lot of investors are doing is they’re buying at the Trustee sale, or they’re buying a vacant REO and renting it out. And they have a month or so vacancy while their agent is getting it ready and getting it market. So I’m gonna let you know there are 2,724 houses, I pulled up two of them. I just/the first two that came up, I pulled them up and I wanted to give you/just a general idea. So there’s/this one house is $35,000. It’s a Thousand square foot house, with three bedrooms and it’s tenant occupied, $650/month is the current lease amount. It doesn’t say in here how long the lease goes. But that’s something you would find out during your two diligence. So $35,000. $650/month. And there’s another one in here Listed for $39,900 and $700/month rent and it’s already occupied. It even goes in the detail to say that the lease goes until March of 2012. So, it’s leased out until then. Okay so, how does that work? Okay so, a couple new ones’s, one is: when you buy a property, tenant occupied, they have a lease, that lease is gonna run with the property. Which means you have to honor the lease. If you’re gonna live in it, you’re gonna have to wait until the tenant’s lease is up. He has a value of lease. Even though there’s a new owner because your contract with the buyer and everything is probably gonna be predicated allowing that tenant to remain in the lease. Now, you do have an opportunity. The opportunity is to go directly to the tenant and say: “Hey look, I’m buying the house, I know you have a current lease, I would like to renegotiate the lease, I’ll honor the current one, or we could come up with new terms” So you can basically give them the opportunity to stand the lease, pay a different amount, whatever. Or you can do nothing, you can let the lease stand, go month to month. What happens is, let’s say that they put a thousand dollars of security deposit down. That money is gonna get transferred/if it was owner occupied/if it was owner manager it’ll get transferred to the new owner to hold that money or to a property management company. If it’s already in property management company , you probably don’t have to do anything because that existing property manager will just start sending the checks to you and that works out pretty sweet. If it’s not being managed, you can hire a property manager and they’ll just take care of all that for you. Especially if you’re an out of state investor. So. really there’s nothing more to do, this is sort of like the quickest way to mailbox money if you’re out of state, you buy the property, you close on it and the checks just start like almost right away. So, it’s pretty sweet deal but we do have over 2,700 of them tenant occupied in vestment homes, currently rented, so there’s lower risk with not having a tenant in there and typically they’ve been in there for a while and that, something you can find that during the do diligence you get an idea of how long they’ve been, how current their rents have been and everything to get a feel if that’s a good tenant. Especially these numbers here, a $35,000 house getting $650/month, no HOA, even if you’re paying property management fees, insurance and taxes, you’re still gonna net probably 550/month and that’s pretty, you know even 500 a month out of a $35,000 investment that’s way over 10%, about 15%. So, it’s pretty nice. Anyway I thought I would share that with you. That is my update for today. Thanks a lot.