Sale Dilemma? (by RentsDue [MA]) Jan 12, 2021 3:56 PM|
Sale Dilemma? (by plenty [MO]) Jan 12, 2021 4:06 PM
Sale Dilemma? (by WMH [NC]) Jan 12, 2021 4:20 PM
Sale Dilemma? (by Barb [MO]) Jan 12, 2021 4:39 PM
Sale Dilemma? (by LisaFL [FL]) Jan 12, 2021 4:42 PM
Sale Dilemma? (by Richard [MI]) Jan 12, 2021 4:47 PM
Sale Dilemma? (by WMH [NC]) Jan 12, 2021 5:12 PM
Sale Dilemma? (by Pmh [TX]) Jan 12, 2021 5:15 PM
Sale Dilemma? (by Ken [NY]) Jan 12, 2021 5:41 PM
Sale Dilemma? (by jim [KS]) Jan 12, 2021 5:45 PM
Sale Dilemma? (by Still Learning [NH]) Jan 12, 2021 6:05 PM
Sale Dilemma? (by Robert J [CA]) Jan 12, 2021 6:14 PM
Sale Dilemma? (by RentsDue [MA]) Jan 12, 2021 6:24 PM
Sale Dilemma? (by Landlord ofthe Flies [TX]) Jan 12, 2021 6:35 PM
Sale Dilemma? (by #22 [MO]) Jan 12, 2021 8:01 PM
Sale Dilemma? (by Oregon Woodsmoke [ID]) Jan 13, 2021 10:58 AM
Sale Dilemma? (by Gene [OH]) Jan 13, 2021 5:45 PM
Sale Dilemma? (by Ray-N-Pa [PA]) Jan 13, 2021 7:30 PM
Sale Dilemma? (by Robin [WI]) Jan 13, 2021 9:50 PM
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Sale Dilemma? (by RentsDue [MA]) Posted on: Jan 12, 2021 3:56 PM
I have a multi family that I would like to sell and the market may be ripe. All great tenants and all have been paying just fine, not even 1 late payment. My dilemma is that one of my children lives in one of the apartments at a reduced rent. I have no regrets there. Life has been so much easier for me that way. This child is a unicorn . Keeps everything there spotless and orderly. I would like to make a condition of sale that he gets to stay there ( at same rent) for a year . That will cover the time until college ends. He does work full time while going to school, but is saving for a house. The loss due to the reduced rent is only about $5000.00 a year. The building will likely sell for about $ 450,000.00. It is not a big reduction in rent, but I donít know if that will deter a buyer. I would love to move this kid into another rental but nothing is open and I know my odds of getting someone out with no cause.
Sale Dilemma? (by plenty [MO]) Posted on: Jan 12, 2021 4:06 PM
Your lease should do that. Sign a one year's lease for set amount. Or perhaps you can offer to prepay a years lost at closing. --172.58.xx.xxx
Sale Dilemma? (by WMH [NC]) Posted on: Jan 12, 2021 4:20 PM
Just sign a lease - it stays with the house and new owner will have to honor it. --50.82.xxx.xxx
Sale Dilemma? (by Barb [MO]) Posted on: Jan 12, 2021 4:39 PM
Just sign a lease with your son and list the building.
If it is only a year, should be no big deal.
I'm with plenty - you can always pre-pay a year at closing if it is an issue.
Sale Dilemma? (by LisaFL [FL]) Posted on: Jan 12, 2021 4:42 PM
It is likely to affect your sale. I wouldnít lock it in for a full year, maybe six months. Either something else will come along between now and then and if not you can always chip in to help pay the rent if you feel obligated. I wouldnít want to turn off any buyers. I just think $5000 below market is quite a sum. --216.186.xxx.xx
Sale Dilemma? (by Richard [MI]) Posted on: Jan 12, 2021 4:47 PM
Just reduce the sale price by $5000 if you have to. --75.7.xx.xx
Sale Dilemma? (by WMH [NC]) Posted on: Jan 12, 2021 5:12 PM
Sign a lease, and concede back $5k at closing. --50.82.xxx.xxx
Sale Dilemma? (by Pmh [TX]) Posted on: Jan 12, 2021 5:15 PM
do as WMH says. some suggestions posted are just unethical & I wonder how what is posited was done to them (?) --107.77.xxx.xxx
Sale Dilemma? (by Ken [NY]) Posted on: Jan 12, 2021 5:41 PM
PMH,what is unethical about any suggestions? so long as the seller does not misrepresent anything i see nothing wrong.I would sign a lease with the kid and make it clear to any buyer all the leases that exist and i probably wouldnt even tell the buyer it is my kid.For the sake of the sale actually i think you would be better off to have no lease in that unit and if the rent gets raised then pay the difference yourself monthly instead of trying to pay the new owner $5000 at closing or anything else that will just confuse things --72.231.xxx.xxx
Sale Dilemma? (by jim [KS]) Posted on: Jan 12, 2021 5:45 PM
I see no problem with any suggestions listed above. If I was buying this property, I or my attorney would be reading all leases and looking at all apartments. I may decide the place is worth $500k and so the $5000 is not going to be a problem. On the other hand if I didn't like the numbers then let the negotiations begin. Nothing is hidden. --71.34.xxx.xx
Sale Dilemma? (by Still Learning [NH]) Posted on: Jan 12, 2021 6:05 PM
Bring your childís rent up to current rates, sign a lease with the current rent amount for whatever duration makes sense and supplement the difference for your child. If getting that rent up to current rates impacts cap numbers or raises the sale price, you might make more. --73.17.xx.xxx
Sale Dilemma? (by Robert J [CA]) Posted on: Jan 12, 2021 6:14 PM
So many times when I was listing an apartment property for sale I had someone in the property that I wanted to save from being evicted the first year or so. One was my resident manager of many years. The buyer had no longer needed her services and since she never paid rent, she had to go. I offered her other units in other building of mine but all of her friends lived there too, this was a large complex. So I made a condition of the sale, "I would pay her rent for the next 12 months and they had to keep her as a tenant. No games".
Another property I had a friend living there and the buyers wanted them gone. A family of 4 living in a 2 bedroom. Their rent was low so I got my friend to kick in a few more bucks towards the rent and I also gave the buyers a discount to cover some of the reduced rent.
In the end I was proud of myself making things work out.
On the other hand when I sold a home I gave the buyer a $10,000 discount to cover my tenants next 3 months worth of rent and any legal fee's of they had to be evicted. The tenants were given 90 days to move, then pay no rent. My tenants got greedy after the sale and wanted an extra $5,000 to cover their moving expenses. So they refused to move by the 90 day period and had to be evicted, owing the new owner all of the back rent.
Buyers and Tenants have to "work" with you to accomplish a smooth transition. --47.155.xx.xxx
Sale Dilemma? (by RentsDue [MA]) Posted on: Jan 12, 2021 6:24 PM
Thank you for all the responses. My dilemma was whether to sign a lease to make it solid, offer to negotiate the difference or just pay it out of pocket. All workable scenarios, I just wanted to get some opinions from the board to see if I was too involved to see that there was only one obvious solution. The array of opinions was extremely appreciated, Iím all over the place with this. I am absolutely not a helicopter parent. The kid would never let me pay out of pocket towards rent. I had to really convince this one to leave the rat and flea infested sh****le they rented on their own. As a seller, I donít want to hurt the sale. As a buyer, I would be OK with an existing tenant on reduced rent for a specified period if the reason was disclosed and made sense. I would want to be compensated ( money talks) . But I know not every seller would look at it the same way. It is a multi and this is not the best or biggest unit so unlikely that it would be owner occupied and ( if it was) the owner would probably not want to occupy this particular unit. --75.133.xxx.xx
Sale Dilemma? (by Landlord ofthe Flies [TX]) Posted on: Jan 12, 2021 6:35 PM
That would raise a big red flag to the buyer. Rightly so. Just chip in the difference if they raise his rent. The loss of profits from sale you'll lose due to making a hassle over this would more than pay the difference many times over. --108.69.xxx.xxx
Sale Dilemma? (by #22 [MO]) Posted on: Jan 12, 2021 8:01 PM
Hang on a sec - it's unethical to sign a lease? That's up to the buyer to recognize rents collected and lease terms when buying a place. That's in no way unethical. I would simply sign a lease, ending whenever you chose. If the buyer can fog a mirror, they'll review the leases during their diligence phase..... there's absolutely 0 unethical behavior in signing a lease and fully disclosing it. I've purchased underperforming units, and that's exactly what it is... there's no crime in that..... honestly, I'd just list it, along with rents and lease expirations. That's full and honest disclosure.... Many buyers would be happy to have a 12 month lease to be carried out by a (assuming) a long term tenant in a place they're buying..... --23.126.xx.xxx
Sale Dilemma? (by Oregon Woodsmoke [ID]) Posted on: Jan 13, 2021 10:58 AM
Sign a one year lease with adjustible rent. Low rent until the property sells and rent raises to market at close of escrow. After the sale, you make up the difference in rent until the lease ends.
The buyer will be fine with it especially if your child's unit is kept clean and nice. --174.246.xx.xxx
Sale Dilemma? (by Gene [OH]) Posted on: Jan 13, 2021 5:45 PM
RentsDue [MA], how about having your child pay reasonable rent and then you gift them the $5,000 when they are ready to buy their own place. That way your child isn't really out anything and they would still have the same money to buy a place of their own. --99.165.xx.xxx
Sale Dilemma? (by Ray-N-Pa [PA]) Posted on: Jan 13, 2021 7:30 PM
Price it with a price reduction but tell the buyer that the tenant - your son prepaid for the year --24.101.xxx.xx
Sale Dilemma? (by Robin [WI]) Posted on: Jan 13, 2021 9:50 PM
The value of the property is based on the cap rate. If your son is paying under market by X, then the value of your property could be decreased by 3x. Sign a lease with your child for full market rate and subsidize it so he's paying the same. He/she is already getting that subsidy in the form of reduced rent, so the helping hand shouldn't be a problem. --104.230.xxx.xx
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