Hey guys, Happy Holidays here. I am in the office today. Got the festive pug shirt on, wanted to record a video because we get oftentimes the same question over and over on, do you guys buy rental properties that are rented with a tenant, whether it’s month-to-month, or in a lease? And the answer is yes, we do in most situations. And so that’s why I wanted to shoot a quick video for you just to let you know the parameters of what we look to buy. Because I think oftentimes a seller has a property and this could be if you’re in-state, it could even give your two houses down from the rental property and you live two houses down, or if you live two states away from the property, right. You’re in California, the property’s in Chicago, or North Carolina, or whatever it is.
And you’re an out of state landlord and the tenants are still in there or let’s say they’re leaving, or they’ve already left. So, if they’ve already left, it’s much easier to consummate a deal because the property is vacant and it’s just easier to purchase for us when it’s vacant. But we just had a couple of case studies of properties that we bought that the tenant was in the property, they were on a lease and they were, I think, six months into the lease, so we bought it six months ago. They had still six months to go. We actually purchased the property with the tenant in place. And then the tenant actually just ended up leaving. We rehabbed what needed to be rehabbed. And then we resold the property. So the answer is yes, but there are some criteria what we look for, right? So A and B areas, and we want to make sure that the rent is close to market rent as possible. Right?
So if you’re looking at selling a property, tenants inside, you’re six months into a lease and you need to sell it and the market rent is 1,500, we’re looking for 1,500, right, or something close to that, right. It can be really close and that’s okay. But it can’t be like 1,900, 1,800, because then we have to purchase that, honor that lease. And then in six months, what if they leave and the property is in disrepair and whatnot. I’ll give you an example. We just had a story. So, we purchased a property and the tenants were, I think, maybe disgruntled right, that the owner was forcing them to leave. So, on the way out on the walls, they put who … they painted. Right. It was a red wall, I think a red paint wall. And they put in white, who buys a house sight unseen, right? Like over the whole living room wall.
And so, we got in there and we were like laughing because we did walk the property. We saw it. Right. And this one, it was less than a thousand square foot. Usually, we look for a thousand square foot or higher. We just know our numbers really well. Right. So it was just like buying at a courthouse at the auction steps. If you know your numbers, then you know what the rehab cost is going to be. Right. So they’re thinking, how can you buy a property sight unseen? And they’re, I think teasing us, it was kind of funny, but we knew it had to be rehabbed anyway, once they leave, we know we’re going to have to paint. Whether they wrote that or not, we know we’re going to have to repaint it.
We’re know we’re going to have to re-sand the floors, add some carpet, clean up the kitchens, light fixtures, that kind of stuff. So, if you know your numbers really well, then you can buy it sight unseen. Right? The other consideration is that on a rental if we’re going to keep it as a rental, the rehab is always much less, right? To get a rental ready and place a tenant than if we were to purchase it, to resell it. Right. So livable, sellable, two different cost structures. Does that make sense? Livable, like rent friendly, is a different rehab cost than sellable. Sellable, everything’s got to be brand new, right? New kitchen, new bath, new vanities, new appliances, stainless steel. Paint’s got to be super quality. Whereas, with a rental, it’s just functional, right. It doesn’t have to be over the top. So, that’s why it’s sometimes half the cost. So, that’s a consideration.
The other thing, what we try to look for is at least, like I said, a thousand square foot, typically three-bed, but the caveat to all this is if you’ve got like a two-bed or even a three-bed, but it’s less than a thousand square foot, inquire and let us know regardless. Because we’ll still take a look at it. Right. In special situations, or maybe a reduced price, or what have you. So, whatever the reason, if you’ve got like a rental, you need to sell it for literally any reason you’re in-state, you’re out of state. You just don’t want to be a landlord anymore, behind on bills. Give us a chance, go over here to the right, input you’re info, or call us at the 866 number and we’ll reach out to you. Okay. Happy Holidays.