Securing properties with tenants is a situation full of intricacies.
In this short but sweet episode, Mr. TTP, Brent Daniels, gives a quick run-through on a master plan on negotiating and striking a deal with the residents.
Wholesaling Quicktip – How to Wholesale a House with Tenants
First of all, you have to find out, “Is the property on a long-term lease or is it month-to-month?” If it’s month-to-month, then you can have a conversation with the tenants and put together a game plan for them to move out. It’s a lot easier to sell these properties if they’re vacant, especially if they need a lot of renovations. If they need a lot of renovations, you need the property vacant. You can’t just have a family living in there and you’re ripping out the kitchen and everything. You need to have a conversation with the tenants. You need to give them enough notice and runway to be able to get out of the property.
The craziest thing about real estate investing is 80% of the deals come from investors.
Typically, what happens there is you give them Cash for Keys, “I want to help you in this process. I’m willing to give you $500 or $1,000.” I’ve given $5,000 before for Cash for Keys so that they get out of the property and I can have access to the property or my buyers can have access to the property sooner. If they have a long-term lease, you can offer Cash for Keys and see if they would get out, but if not, the Landlord-Tenant Act protects that tenant. You can’t evict a tenant if they’re paying in a timely manner according to their rental agreements. They’re abiding by the rental agreement. You can’t kick them out because you want to do something with the property. They have to be in there for the term of the lease.
When you’re talking to people that have tenants, you need to find out are they on a long-term lease or month-to-month? That will help you figure out the strategy. You can sell those deals with the tenants and close on it. It may be 30 days to get out afterward or whatever else. In that situation, you would do what’s called an escrow holdback, where the title company or closing attorney would hold on to $10,000 of the owner’s proceeds and they get that released when the tenant leaves the property in a decent condition. We do a lot of deals with tenants.
The craziest thing about real estate investing is 80% of the deals we do are from investors. What I mean by that is, they’re rental properties to retired landlords. They’ve depreciated the property as long as they have. They don’t want to deal with tenants anymore. They don’t have the budget to fix it up. People get so excited to be real estate investors without building that foundation of finding discounted properties. All of a sudden, this thing turns into a money pit for them. It turns into a huge frustration.
Over years of being frustrated with not only having to be the concierge to your tenants to make sure that if a light bulb is out, that it’s not electrical. It’s the light bulb and that the reason that the toilet doesn’t work is because you need to plunge it. After years of dealing with that, people get tired of it. Most people are running these things themselves. It’s not going through a property management company because, most of the time, the cashflow is thin. It’s too thin to have property management and so people get tired and they get done.
They don’t raise rents because they make a little agreement with their tenants and they go, “Tenant, listen. You fix what’s going on. I don’t want to have to fix and upgrade this house, but I won’t increase your rent every year. Deal?” “Deal.” “Okay, great.” They stay there for twenty years in the property. Inevitably, all the natural forces in the world and the tenants beat up that property. It needs to be bought cash because of the condition and that’s where we come in.
If you’re interested in joining the most proactive group in real estate investing, it is the TTP Program. Go to WholesalingInc.com/TTP. I personally mentor you. You get my cell phone. We text and call. It’s crazy. It’s bananas, but it’s the truth because I want you to be as successful as possible. I want to work with you and I love you. If you’re interested in that, WholesalingInc.com/TTP. Check it out, scroll down and keep scrolling. The little scroll thing is tiny because there are so many testimonials. Nobody has more testimonials. If it feels good in your gut, sign up for a call. Until next time, you’re the best, TTP.
About Brent Daniels
Brent Daniels is a multi-million dollar wholesaler in Phoenix, Arizona… and the creator of “Talk To People” — a simple, low cost, and incredibly effective telephone marketing program…
Also known as “TTP”… it helps wholesalers do more, bigger, and more profitable deals by replacing traditional paid advertising (postcards, yellow letters, bandit signs, and PPC) with being proactive and taking action every single day!
Brent has personally coached over 1,000 wholesalers enrolled in his “Cold Calling Mastery” training, and helped 10,000’s of others who listen to him host the Wholesaling Inc. podcast, watch his YouTube channel, and attend his live events…
A natural leader, Brent combines his passion for helping others with his high energy, “don’t-wait-around-for-business” attitude to help you CRUSH your wholesaling goals as quickly and easily as possible!