A guy wants me to partner with him in flipping a house. it has 2 paying tenants. will it be able to sell?

Question

im thinking buyers want a clean, and cleaned out house. his idea is to renovate, rent, then flip? wouldnt it be better off empty???

Answer 1

economy sucks there is a higher risk involved

Answer 2

An investor would be more inclined to buy a property with rental agreements in place as long as the rent is fair market for the property and will allow the ink to run black.  If the buyer plans to reside in the home, it might be an arduous task displacing a current tenant.  It all comes down to the buyer and the market in which the property exists. Is it a declining market?  Is the decline forecasted to continue? You have to look at the whole picture and target the right buyer.  As an example: Las Vegas property values were inflated by the Boom.  With 30,000 distressed homes people are taking rental losses to avoid foreclosure.  They can't sell their homes because they are upside down on their mortgages.

Answer 3

Partner? Are you putting up the cash? the credit? your time (labor)? what are you putting up?

Now, if the property has 2 paying tenants... and it is cash flowing ...above $300 from rent to PITI(principle,interest, taxes, insurance)... it should be a good buy BUT it is very difficult to cash flow a property because of the pass few years of high property value...

check out... zilpy.com for average rent...

If the prop cashflows do not kick out the tenants just sell it as is to an investor... this "buyer" might be a tire kicker... make sure you get an earnest deposit... if you can find the buyer... run a title search on the most recent sells with your props criteria... then skip trace the owner ph#... or send them a post card.. good luck

Answer 4

I'd advise against going into a partnership for this.  It is fraught with risk.  If you want to buy a house to remodel and sell, do it on your own so you have control.  You have different ideas that really aren't compatible.

Answer 5

Yes, you can not do a large renovation while it is occupied. The tenants are entitled to quiet enjoyment of the property. If you are planning on renovating the kitchen and baths, for example, that is extremely disruptive to the tenants.So, you would have to give them notice to vacate, then renovate. Additionally, most people will not agree to move into a rental if it has to be shown to prospective buyers. Again, it is disruptive.  It is much easier to show an unoccupied property. So, if you can't afford to do the renovation while the property is empty and not commanding rent, while you still have to pay taxes and insurance and mortgage and utilities, think twice about this. Additionally, it will be more expensive to insure an unoccupied property. Be sure you obtain the correct insurance, otherwise you will find a nasty surprise- a cancelled policy, and no insurance, in the event of a claim.

Answer 6

It depends who you're trying to sell the house to.  If it is in a predominatly rental neighborhood, many investors like to buy properties that are already rented because they have income right away.

If the property currently has tenants, then you're going to have trouble selling it to someone that wants it for a principle residence.

Finally, why would you kick out tenants, clean up the house and then rent it out again?  You're spending a lot of money to put yourself back into the same situation you are already in.