Multi-family: assuming leases at purchase

 

Step 1: are you using a Buyer’s Agent who is experienced with multi-family purchases for investors as well as owner occupants? If you are not an investor, let’s assume you are going to become a landlord and you will the owner occupant of one of the units at the property.

 

Step 2: have you asked friends, family, colleagues, and your buyer’s agent for referrals for real estate attorneys? If not, start this search and contact the real estate attorney and let them know you will need their help to review leases, property deeds, and the purchase and sales (P&S) contract on your behalf.

 

In Massachusetts, you will have an Offer to Purchase form that your buyer agent has gone over with you. In your offer to purchase, make sure you detail how you want the property to be delivered at closing and what terms and conditions are acceptable for you to purchase the property. Once your offer is accepted, you will then schedule and conduct a home inspection and approximately 10-12 days after the offer is accepted you will sign a purchase & sale contract which will replace your offer terms, price and conditions.

 

Do you want the Seller to deliver the property vacant at the closing?

 

Do you just want the one unit that you will occupy to be delivered vacant at closing?

 

You are the one who knows what terms are acceptable for your purchase and initial ownership of the property. It is best to have at least your unit delivered vacant prior to the close. Make it clear and make sure you have it in writing in your purchase or offer contracts. Also, request a copy of all leases within 3-4 business days from your accepted offer. The terms for purchase are yours to choose. The Seller may wish to negotiate your terms. Overall, you want to find a mutually agreeable solution. Price is just one component, although important, for your purchase. Perhaps an extra $5k added to the purchase price will make it possible or more likely for the Seller to make a deal with the tenants to vacate early.

 

What should you pay attention to within the leases? Look at every line and paragraph heading of the lease and figure out what responsibilities are the tenant’s and which are the landlord’s. For example, who is responsible for taking out the garbage/recyclables? Who should shovel sidewalks and mow the lawn? Is heat included in the lease? Are pets allowed in the lease and what is your policy on pet ownership?

 

We have all signed leases, been tenants, and had various experiences with landlords. The roles are reversed now that you will be the landlord.

 

Have fun! If you need any assistance or have questions, I’ve been through what you are heading into. Email will@willardgrp.com

 
 

 

 

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Willard D. Cunningham
Willard Cunningham, Broker/Principal
(617) 921-4758
cell/direct
will@willardgrp.com
http://willardgrp.com/bio
MA License# 9077116
WILLARD REALTY GROUP, Inc.
1953 Massachusetts Ave.
Ste. 400775
Cambridge, MA 02140
http://willardgrp.com/
MA License: 9011

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“Your referrals to me will get the best of many years’ residential real estate experience

– and my heartfelt thanks.”