Can You Buy a Tenant Occupied Property

1. Can You Buy a Tenant Occupied Property? Every investment in real estate comes with its risks & rewards. That’s more important to note when real estate comes with rent-paying tenants. So, can you purchase a tenant-occupied property? Well, to learn further on this front, let’s dive into the post below: So, you first need to consider obtaining a copy of the written sub-leases and leases. Reviewing the documents and examining the lease for duration are two significant steps. That’s more evident if that tenant has any renewal options, security deposit, and rental amount. For instance, when the tenant has a long-duration lease with a smaller rental payment, that might be something you can consider while determining the purchase price. Besides, the purchaser must get the rent roll that has a monthly rental amount for every unit. It also consists of the security deposit amount. A credit at the closing - Any real estate transaction involves a purchaser of the building to get credit. They receive the credit right at the closing for the security deposit amount. The purchaser needs to set up the amount for security deposits. Also, the seller requires keeping security deposits while offering the credit to that purchaser for opening an account.

2. More Steps a Purchaser Should Undertake - A purchaser must insist tenants sign the Estoppel Letter. Now, what’s the estoppel letter? Simply put,it’s the certified document used in due diligence in real estate & mortgage activities. The letter is valuable when a real estate litigation Brooklyn NY arises or if there are no deposits & tenant states he had made a deposit. That becomes quite challenging for the purchaser to prove their statement. Such a certification, thus, holds paramount importance. Last but not least, a purchaser also needs to send the letter of attornment to tenants. This attornment goes to every tenant & states that there’ll be new owners & rent must get paid over to that new owner, particularly at the given date. Having this letter will help avoid delays or confusion while paying rental payments. Finally, the purchaser should also require the seller to send letters of attornment to all tenants. A letter of attornment goes to each tenant and states that there will be a new owner and rent should be paid over to the new owner as of a certain date. It is important to have such a letter to avoid any confusion or delays in rent payment. Want legal representation for your case? Hire the best real estate attorney Brooklyn NY.