Looking to make a purchase offer on a single family home for myself to live
in. However, the home is not occupied by the seller, but by a tenant who
has a lease that will not expire until December 2006. Closing date will be
in mid April.

The price will be around 500K (well that is what I plan to offer). But that
is what I am willing to pay for if the house is in move in condition.
Having this rental deal creates a real inconvenience, I have to pay two
mortgages for a period of eight months, I have to pay flood and windstorm
insurance for my current property and this one, property taxes and other
maintainance (water, sewer, lawn, pest control etc...) and the monthly rent
($1800) will not even cover part of a mortgage.

My question is, I want to quantify what this additional 8 months of rental
deal will cost me. Then I would like to deduct some of it from my offer
price because it does cost me extra money. Not to mention the hassle of
when it comes time to terminate the lease at the end, I might be stucked
with having to return a security deposit which the seller has already
pocketed. But how will I quantify such a thing?

I know, I know, a house is worth what someone is willing to pay for it, and
I know I am willing to pay 500K if the house is ready for me to move in, but
with a lease? I don't know, I will not pay as much. Can someone help me
figure out what is a fair reduction for this? Location is Miami, Florida.

I have reviewed the lease agreement and there is no out clause in the event
of a home sale.

Thanks in advance,

MC

you could pay the tenant $5000 say to leave ASAP.might be less than
added other costs if he stays

ask the tenant his intentions

Be concerned what if you buy home in move in condition and right before
lease runs out tenant trashes place

miamicuse wrote:

Looking to make a purchase offer on a single family home for myself to live
in. However, the home is not occupied by the seller, but by a tenant who
has a lease that will not expire until December 2006. Closing date will be
in mid April.

The price will be around 500K (well that is what I plan to offer). But that
is what I am willing to pay for if the house is in move in condition.
Having this rental deal creates a real inconvenience, I have to pay two
mortgages for a period of eight months, I have to pay flood and windstorm
insurance for my current property and this one, property taxes and other
maintainance (water, sewer, lawn, pest control etc...) and the monthly rent
($1800) will not even cover part of a mortgage.

My question is, I want to quantify what this additional 8 months of rental
deal will cost me. Then I would like to deduct some of it from my offer
price because it does cost me extra money. Not to mention the hassle of
when it comes time to terminate the lease at the end, I might be stucked
with having to return a security deposit which the seller has already
pocketed. But how will I quantify such a thing?

I know, I know, a house is worth what someone is willing to pay for it, and
I know I am willing to pay 500K if the house is ready for me to move in, but
with a lease? I don't know, I will not pay as much. Can someone help me
figure out what is a fair reduction for this? Location is Miami, Florida.

I have reviewed the lease agreement and there is no out clause in the event
of a home sale.

Legally the new owner would assume the lease and its terms, even if that's not
mentioned in the lease. A key issue is the quality of the tenant. A bad tenant
or one that doesn't want the house to be sold because she's afraid she could
lose her home could create all kinds of problems. Trashing the place, leaving
the water on all the time, chemical "accidents" are examples. If there is
damage or updates that need to be done, the security deposit may be
insufficient, even if you can legally keep it. In most states there are clear
rules (written damage estimates, written notification to tenant etc) that must
be followed precisely before the landlord is entitled to keep the security
deposit.

In many states, the security deposit is required by law to be held in a separate
bank account, so that seller shouldn't be able to just clean it out and run.
You should ensure you know what is going on with both the security deposit and
prepaid last month's rent, if any. That should be spelled out in the lease
agreement that you reviewed.

Also just kicking the tenant out at the lease expiration may be more
complicated if the tenant doesn't want to go. The tenant may have additional
rights to stay in the middle of the winter., although that probably is not an
issue in Miami If the rent doesn't pay the mortgage/taxes than you will
effectively be subsidizing the tenant to live there as well.

"miamicuse" wrote in message

My question is, I want to quantify what this additional 8 months of rental
deal will cost me. Then I would like to deduct some of it from my offer
price because it does cost me extra money. Not to mention the hassle of
when it comes time to terminate the lease at the end, I might be stucked
with having to return a security deposit which the seller has already
pocketed. But how will I quantify such a thing?

You really have to talke to a real estate lawyer when you get intot he
security depots stuff. It may be possible to termiante the lease at the
time of sale, but that will depends on state law.


I know, I know, a house is worth what someone is willing to pay for it,
and
I know I am willing to pay 500K if the house is ready for me to move in,
but
with a lease? I don't know, I will not pay as much. Can someone help me
figure out what is a fair reduction for this? Location is Miami, Florida.

The house will in all probability be increasing in value while you sit it
out. It does not matter how you quantify your added expenses, it still
depends on the seller accepting your offer. Before doing anything like
that, be sure of your legal status and repercussions as a part time
landlord, depreciation, income from rents, etc.

Just buy the place and then tell the tenneants to get the **** out.

If they don't, let me know. I got some guys that can take of it for you.....

"miamicuse" wrote in message
...
Looking to make a purchase offer on a single family home for myself to
live
in. However, the home is not occupied by the seller, but by a tenant who
has a lease that will not expire until December 2006. Closing date will
be
in mid April.

The price will be around 500K (well that is what I plan to offer). But
that
is what I am willing to pay for if the house is in move in condition.
Having this rental deal creates a real inconvenience, I have to pay two
mortgages for a period of eight months, I have to pay flood and windstorm
insurance for my current property and this one, property taxes and other
maintainance (water, sewer, lawn, pest control etc...) and the monthly
rent
($1800) will not even cover part of a mortgage.

My question is, I want to quantify what this additional 8 months of rental
deal will cost me. Then I would like to deduct some of it from my offer
price because it does cost me extra money. Not to mention the hassle of
when it comes time to terminate the lease at the end, I might be stucked
with having to return a security deposit which the seller has already
pocketed. But how will I quantify such a thing?

I know, I know, a house is worth what someone is willing to pay for it,
and
I know I am willing to pay 500K if the house is ready for me to move in,
but
with a lease? I don't know, I will not pay as much. Can someone help me
figure out what is a fair reduction for this? Location is Miami, Florida.

I have reviewed the lease agreement and there is no out clause in the
event
of a home sale.

Thanks in advance,

MC

"miamicuse" wrote in message
...
Looking to make a purchase offer on a single family home for myself to
live
in. However, the home is not occupied by the seller, but by a tenant who
has a lease that will not expire until December 2006. Closing date will
be
in mid April.

The price will be around 500K (well that is what I plan to offer). But
that
is what I am willing to pay for if the house is in move in condition.
Having this rental deal creates a real inconvenience, I have to pay two
mortgages for a period of eight months, I have to pay flood and windstorm
insurance for my current property and this one, property taxes and other
maintainance (water, sewer, lawn, pest control etc...) and the monthly
rent
($1800) will not even cover part of a mortgage.

My question is, I want to quantify what this additional 8 months of rental
deal will cost me. Then I would like to deduct some of it from my offer
price because it does cost me extra money. Not to mention the hassle of
when it comes time to terminate the lease at the end, I might be stucked
with having to return a security deposit which the seller has already
pocketed. But how will I quantify such a thing?

I know, I know, a house is worth what someone is willing to pay for it,
and
I know I am willing to pay 500K if the house is ready for me to move in,
but
with a lease? I don't know, I will not pay as much. Can someone help me
figure out what is a fair reduction for this? Location is Miami, Florida.

I have reviewed the lease agreement and there is no out clause in the
event
of a home sale.

Thanks in advance,

MC

First of all You should consider what your willing to pay or can afford.
That's what should dictate your offer. Second you don't seem to be in any
hurry to move in ( Dec. 2006) seems like you have time to keep looking.
Basically your buying a rental house tenant included. How are the tenets I
would think a $500,000 house there not loser, How long have they been in
there? If they have rented it for quiet a while and it's not a mess then
chances are they wont give you a going away surprise. Most people are decent
there a small % of idiots that's the ones you hear about.
Another factor would be What's the market going to be like in a year, will
you make money on the house? But even if it goes down it comes up. In my
area my house Just appraised for $96,000 more than we paid 14 months ago. So
in this dooms day market I made money ( people love doom ) We don't know
your Financial situation only you no that, I certainly know the feeling of
two house payments, it was tight until we sold our first house. There are so
many factors, Is the house a deal at 500K? That important question. " The
price will be around 500K (well that is what I plan to offer" Seems like
you Know the offer. Sometimes you have to stretch for the payoff.

"Sacramento Dave" wrote in message
. com...

"miamicuse" wrote in message
...
Looking to make a purchase offer on a single family home for myself to
live
in. However, the home is not occupied by the seller, but by a tenant
who
has a lease that will not expire until December 2006. Closing date will
be
in mid April.

The price will be around 500K (well that is what I plan to offer). But
that
is what I am willing to pay for if the house is in move in condition.
Having this rental deal creates a real inconvenience, I have to pay two
mortgages for a period of eight months, I have to pay flood and
windstorm
insurance for my current property and this one, property taxes and other
maintainance (water, sewer, lawn, pest control etc...) and the monthly
rent
($1800) will not even cover part of a mortgage.

My question is, I want to quantify what this additional 8 months of
rental
deal will cost me. Then I would like to deduct some of it from my offer
price because it does cost me extra money. Not to mention the hassle of
when it comes time to terminate the lease at the end, I might be stucked
with having to return a security deposit which the seller has already
pocketed. But how will I quantify such a thing?

I know, I know, a house is worth what someone is willing to pay for it,
and
I know I am willing to pay 500K if the house is ready for me to move in,
but
with a lease? I don't know, I will not pay as much. Can someone help
me
figure out what is a fair reduction for this? Location is Miami,
Florida.

I have reviewed the lease agreement and there is no out clause in the
event
of a home sale.

Thanks in advance,

MC

First of all You should consider what your willing to pay or can
afford.
That's what should dictate your offer. Second you don't seem to be in any
hurry to move in ( Dec. 2006) seems like you have time to keep looking.
Basically your buying a rental house tenant included. How are the tenets I
would think a $500,000 house there not loser, How long have they been in
there? If they have rented it for quiet a while and it's not a mess then
chances are they wont give you a going away surprise. Most people are
decent
there a small % of idiots that's the ones you hear about.
Another factor would be What's the market going to be like in a year,
will
you make money on the house? But even if it goes down it comes up. In my
area my house Just appraised for $96,000 more than we paid 14 months ago.
So
in this dooms day market I made money ( people love doom ) We don't know
your Financial situation only you no that, I certainly know the feeling of
two house payments, it was tight until we sold our first house. There are
so
many factors, Is the house a deal at 500K? That important question. " The
price will be around 500K (well that is what I plan to offer" Seems like
you Know the offer. Sometimes you have to stretch for the payoff.



Thanks Dave, I am just trying to figure out a fair price to offer them, My
interest in the property is substantial because it has a unique style I
like, and I plan to do some major interior renovation once I take procession
so if the tenant trash the place (wall, ruin the carpet, break the sink
etc... I don't care). I also don't have an issue with payment (my current
home is paid off already and I might or might not sell afterwards). My
motivation for lowering the offer is simply the fact that I am going to be
paying a fee for close to 8 months for which I get zero benefit and this
somehow needs to be factored in.

The tenants are new. They moved in beginning of January. The agent told me
the property was vacant for a while and owner went to a nursing home,
daughter who lives far away is getting a warranty deed transferred and hence
cannot close till April...they put the house on the market and then hurrican
Katrina, then Wilma came through, damaged their tree, and part of the screen
enclosure, people weren't out looking for houses, one thing leads to another
they decided to rent it out and signed a one year lease but the house is
still for sale.

What I don't understand is, why the tenant, knowing the house is for sale,
will move into this place, with some hurricane damage (it will be an as-is
deal, with a right to inspect, so I have to take a serious look). The
renting probably also make the property less appealing to other buyers so I
think I have some leverage there. But I want to be fair and not take
advantage of the seller's situation. That is why I tried to figure out what
I would pay for should the house is vacant and then I need to deduct some
amount that is reasonable for the renting period. But it's tricky.

MC

Thank you, that makes sense. I will run a check on the tenant to see what I
might find.

MC

wrote in message
ups.com...
The tenant has a lease and there isn't any place I know of where you
can terminate a lease because the property is being sold, unless that
is spelled out in the lease. It doesn't matter if the landlord intends
to now use it for his own use. A lease is a binding legal contract.

As far as the security deposit, I would make sure where that is, how
much it is, and that what has been done conforms to local law. Some
places have strict laws requiring that it be placed in an interest
earning account, promptly returned, etc. And if it's not, the tenant
may be able to recover more than the security deposit. I would have
the security deposit spelled out in the purchase contract and that it
is being turned over to your control or given to you, etc.

A key consideration here is the tenent. I would try to find out as
much as possible. Since they are paying a substantial rent, you are
less likely to have problems, but that is still possible. Giving the
tenant an incentive to leave, as suggested, could be a good idea. You
could offer a bonus equal to two months rent if the tenant leaves
within say 90 days.

As to how much to discount the offer price, that's almost impossible to
seperate from all the other factors involved. Like how much you like
the place, how easy it would be to find another place, how hot/cold the
current market is, etc. From a hard numbers standpoint, you could
calculate what the carrying cost of the place is for interest, taxes,
maintenance, etc for the remainder of the lease. Factor in that the
loss is tax deductible, which helps. If you come up with say $10K,
then that is a general guide. In any case, unless it's a hot market
and you want it bad, I'd tend to make the offer on the low side, as you
can always come up.

OKKK.........

"Red Neckerson" wrote in message
news:QrYLf.2119$XE6.765@trnddc07...
Just buy the place and then tell the tenneants to get the **** out.

If they don't, let me know. I got some guys that can take of it for
you.....

"miamicuse" wrote in message
...
Looking to make a purchase offer on a single family home for myself to
live
in. However, the home is not occupied by the seller, but by a tenant
who
has a lease that will not expire until December 2006. Closing date will
be
in mid April.

The price will be around 500K (well that is what I plan to offer). But
that
is what I am willing to pay for if the house is in move in condition.
Having this rental deal creates a real inconvenience, I have to pay two
mortgages for a period of eight months, I have to pay flood and
windstorm
insurance for my current property and this one, property taxes and other
maintainance (water, sewer, lawn, pest control etc...) and the monthly
rent
($1800) will not even cover part of a mortgage.

My question is, I want to quantify what this additional 8 months of
rental
deal will cost me. Then I would like to deduct some of it from my offer
price because it does cost me extra money. Not to mention the hassle of
when it comes time to terminate the lease at the end, I might be stucked
with having to return a security deposit which the seller has already
pocketed. But how will I quantify such a thing?

I know, I know, a house is worth what someone is willing to pay for it,
and
I know I am willing to pay 500K if the house is ready for me to move in,
but
with a lease? I don't know, I will not pay as much. Can someone help
me
figure out what is a fair reduction for this? Location is Miami,
Florida.

I have reviewed the lease agreement and there is no out clause in the
event
of a home sale.

Thanks in advance,

MC

miamicuse wrote:

The tenants are new. They moved in beginning of January. The agent
told me the property was vacant for a while and owner went to a
nursing home, daughter who lives far away is getting a warranty deed
transferred and hence cannot close till April...they put the house on
the market and then hurrican Katrina, then Wilma came through,
damaged their tree, and part of the screen enclosure, people weren't
out looking for houses, one thing leads to another they decided to
rent it out and signed a one year lease but the house is still for
sale.

I'd have this Wilma person arrested for malicious mischief. Unless you meant
Rita.


What I don't understand is, why the tenant, knowing the house is for
sale, will move into this place, with some hurricane damage (it will
be an as-is deal, with a right to inspect, so I have to take a
serious look).

Sounds like my (relatively new) next door neighbors. I can answer your
questions:

1. The tenants are Katrina evacuees, who should have stayed in New Orleans
and contributed to the levee sandbagging.
2. Their rent is paid by FEMA.
3. They don't give a fig about what's going to happen next January, or next
week. Their only concern is staying out of jail today.

I could by wrong; maybe you just have ordinary fools. But if FEMA IS the
actual renter, you may have another whole bucket of problems - such as
automatic renewal of the lease in perpetuity - that comes from dealing with
the government.

This is rather confusing. You speak of having to pay 2 mortgages but
claim to have your home paid off. You plan major renovations so you will
need a place to live and to store your stuff while these are occurring. You
argue that you will get zero benefit from the tenants yet you claim that
they pay $1800/mo. in rent. These things do not make sense.
You need to get a copy of the lease and read it thoroughly. You need to
include in the sale contract the payment from the seller to you of the
security deposit and any interest. You need to get a quick course in
landlord law somewhere. Since you'll be paying insurance and taxes on 2
homes you may wish to factor this into your offer but since you want the
house do not low ball.

Dave M.

On Sat, 25 Feb 2006 18:11:58 GMT, "David Martel"
wrote:

This is rather confusing. You speak of having to pay 2 mortgages but
claim to have your home paid off. You plan major renovations so you will
need a place to live and to store your stuff while these are occurring. You
argue that you will get zero benefit from the tenants yet you claim that
they pay $1800/mo. in rent. These things do not make sense.
You need to get a copy of the lease and read it thoroughly. You need to
include in the sale contract the payment from the seller to you of the
security deposit and any interest. You need to get a quick course in
landlord law somewhere. Since you'll be paying insurance and taxes on 2
homes you may wish to factor this into your offer but since you want the
house do not low ball.

He should also ensure any involved "court order" about a deed transfer
and it is available to the lawyer/title company at closing. He
mentions about the daughter, since the mother is in a nursing home. I
went through a similar thing in my house.

To the OP, your numbers ought to reflect a positive cash flow. If you
know going into the deal with some potential lose look for ways to
reduce fees, etc.... get a point shaved off from both the agent and
loan officer and others.

Oren


"My doctor says I have a malformed public-duty gland
and a natural deficiency in moral fiber, and that I am therefore
excused from saving Universes."

Yes my current home is paid off, but that fact should not factor into the
decision because I am not determining the price of the property base on what
I can afford. I have no trouble coming up with a FMV for the property based
on an apple to apple comparison. What I was trying to figure out is what
effect the rental lease have on my offer. I know what I would offer if the
house is ready to move in, and I know it's less attractive because it has a
lease, the question is how much.

I am saying zero benefit because I computed the mortgage to be just above
$2200 a month. On top of that will be property tax, water and sewer,
windstorm insurance (which will rise like at least 50% due to Wilma), flood
insurance, pest and lawn maintainance etc...so I will be paying money for
the tenant to live there for like 8 months. That is what I mean by zero
benefit.

Sure, the mortgage can't be compared to the rent, because mortgage goes to
the equity of the house, but for the first few years, most of that is
interest, so I am paying interest for close to nothing.

It does not affect me as much as someone who might be paying for their
current home, but the bottom line is there is significant cost involved
during the coming 8 months to house this tenant.

Yes I will need a place to live during the renovation. I will live in my
current home. Again that does not impact the evaluation one bit. Should I
move in after closing in April I need three months to do the renovation, I
will stay at my current home for three more months. Now I cannot move in
until December 2007, so I will have to stay in my current home three months
after that. Either way, I need to stay at my current home three months
beyond the time it is ready for me to take occupency.

Therefore, whether I have a mortgage or not, or whether I need to make
renovations or not, has zero impact on how it may or may not affect the
price of the property.

MC

"David Martel" wrote in message
ink.net...
This is rather confusing. You speak of having to pay 2 mortgages but
claim to have your home paid off. You plan major renovations so you will
need a place to live and to store your stuff while these are occurring.
You
argue that you will get zero benefit from the tenants yet you claim that
they pay $1800/mo. in rent. These things do not make sense.
You need to get a copy of the lease and read it thoroughly. You need to
include in the sale contract the payment from the seller to you of the
security deposit and any interest. You need to get a quick course in
landlord law somewhere. Since you'll be paying insurance and taxes on 2
homes you may wish to factor this into your offer but since you want the
house do not low ball.

Dave M.

When we bought this house, it was rented and the tenants were building
their own house. There wasn't much question that they would move. We
inspected the house the day we closed to be sure everything looked
okay. The seller had used a rental agency to handle the details of the
rental....anyway, at closing, the security deposit was put in a special
account held by the real estate agent who handled the sale (actually
her boss, the broker). If the house had been damaged he would not have
given them the security deposit.

First month, everything went fine. Then Feb. 1, rent check arrived
and only half the rent was paid....said they were deducting the other
half from security deposit. We sought legal advice and bottom line,
there was nothing much we could do. It would have cost more to sue
than we would have got. As long as the house was still in good
shape....we weren't actually out anything. It was unethical...but we
were afraid to do something that would cause them to damage our house.
When they moved, we did find that the doorknob on the front door in the
entrance hall had been pushed through the drywall. It was covered with
wallpaper and hard to see. By then we had returned the remainder of
the security deposit and there was nothing we could do.

Talk to a lawyer and be very careful. If they are good tenants it can
go very well....

On Sat, 25 Feb 2006 11:07:31 -0500, "miamicuse"
wrote:

Thank you, that makes sense. I will run a check on the tenant to see what I
might find.

Paying for a check might be a good idea, but in this case, his record
with his current landlord is particularly important. Ask the seller
if you can see the records, not just the verbal assurance that he pays
on time.

And asking the tenant how he feels about moving is the best idea.

You might ask him about the condition of the property too. He has an
incentive to exacggerate or lie if he doesn't want the property sold
to someone who will evict him, and you have to allow for that.

MC

Remove NOPSAM to email me. Please let
me know if you have posted also.

On Sat, 25 Feb 2006 15:26:32 -0500, "miamicuse"
wrote:

Yes my current home is paid off, but that fact should not factor into the
decision because I am not determining the price of the property base on what
I can afford. I have no trouble coming up with a FMV for the property based
on an apple to apple comparison. What I was trying to figure out is what
effect the rental lease have on my offer. I know what I would offer if the
house is ready to move in, and I know it's less attractive because it has a
lease, the question is how much.

I don't understand why this is complicated.

How many dollars worth of assets-debts would you expect to have
in 2 years if there were no tenant?

How many dollars worth of assets-debts do you expect to have
in two years given that there IS a tenant?

Whats the dollar difference between the two?