Page 17 - From Ghetto to Gucci: The Basic Principles of Flipping Houses

Foreclosures - Occupants

You remember your conversation with the occupant? Because that is going to come in very
handy. Was the occupant an owner? A renter? Some cities and states have different sets of
rules regarding occupants of foreclosed houses.

In some states you’re allowed to take possession of any house with 30-days of notice,
regardless of whether the person is a renter or occupant. In other places you’re not legally
allowed to kick out renters, you’re required to honor the full rental contract unless they sign a
cash for keys or other deal.

Beyond knowing whether they’re a renter or owner, knowing the occupant and their attitude can
help you determine whether they are willing to leave, or whether they will make things difficult if
you’re trying to work on the house.
Because regardless of state law, if a tenant or owner decides to stay in the house, it’s going to
take you at minimum two months and a thousand dollars to evict them. If the tenant seems
willing to move out or accept a cash for keys offer, that’s valuable time and money that you’re
saving by not dealing with the issue of possession.

Now, let me take a little time clarifying your options with a difficult tenant. These options will vary
from city to city, and state to state, but your options are usually similar. If a tenant is putting up
resistance towards moving out, you can create a cash for keys offer. It’s usually cheaper and
quicker to give a tenant cash for keys than to pursue a long legal process.

Better to give them a thousand dollars than your lawyer, right? Sometimes a tenant is reticent
towards moving because they have physical difficulty, in which case you can offer them the
services of a moving truck and men to help them pack. Sometimes they don’t want to move
because they don’t know what to do with their stuff. Whatever the problem is, you can come up
with a creative solution that costs you little compared to 60 days and a thousand dollars in legal
fees.

Paying for a storage unit for three months is a small price to pay.
If cash for keys and offering other help does not work out, you’ll have to look into your other
legal options. If you’re in a state where there is no tenant protection, you can hand the occupant
a 30-day notice to move out. If they fail to move out at the end of that time, you can start
eviction proceedings.

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