The vast majority of the time — I’d say 90% — selling a residential rental property to a tenant simply ain’t gonna happen. So I make it my job to get to that “no” quickly, so we can move on to viable buyers.
The seller and attorney are often afraid of dealing with the tenant. True, they’re right to worry about the headaches that can rain down if you make a false step.
I believe a cooperative and cordial relationship with the tenant is paramount. So I work with the potential tenant buyer to help them get qualified for the purchase.
Qualifying the tenant
It all comes down to this: can the tenant actually afford the property? Do they have the liquidity? Do they have the borrowing power?
As a former mortgage broker with great lending resources, I can motor through the preapproval process and answer those questions in a very short time.
And to make sure the tenant feels they’re being taken seriously and receiving objective advice, I always encourage them to get their own representation.
Once the tenant is preapproved, I have the experience to interpret the results. Although usually not qualified to buy, an optimistic tenant can offer creative what-ifs that tie up the property forever. When the attorney and owner don’t want to alienate tenant, they continue to entertain the possibilities. I can swiftly and diplomatically bring them to a definitive yes or no.
Avoiding uncertainty & misunderstandings
Often the buyer assumes the seller wants to carry the loan. That’s almost never the case. Sellers want closure, now, and we get those details out in the open right away.
To ensure everyone understands exactly what we’re selling, I have all inspections done prior to beginning sale discussions. It’s part of my building value and condition assessment program, which informs the seller and attorney so they can determine what price and/or terms are appropriate.
Selling a damaged building
When the building or some of its units are in bad shape, I know it won’t pass an appraisal and be eligible for financing. Unsafe or unacceptable conditions such as a leaking roof or exposed wires are among the reasons a bank won’t lend on a property.
Also, if the building has a history of NOVs (Notices of Violation) lenders get doubly nervous. For cases where financing is a problem, I contact my list of professional investors who buy with cash. The owner, despite having no funds to make repairs, can still get an expedient solution.
Let me make your sale quick and efficient. Give me a call . . .