Question: How to accelerate Settlement?

[stixster]

I am looking to put in an offer on my first IP, that has sitting tenants, both of whom wish to remain.

I want to make my offer as attractive as possible to motivated Vendor. but I understand that for me to take 'vacant possession' the Vendor will have to give the tenants 42 days notice, which makes settlement about mid-January.

What advice can you give me so that I can structure something that:
a) gets the tenants to agree to the new (my)tenancy agreement
b) get the current agreement terminated so that me and the Vendor can settle within 2-3 weeks, which is what I know the Vendors would prefer.

I would like to use the DD period (8 working days) to put this together.

I apologise if this has already been covered somewhere, but I couldn't find anything while searching.
Thanks

[Dean@Massiveaction]

Simply purchase with existing tenancies and you give the tenants notice if quick settlement is critical. However I don't recommend this as existing tenants may not be good tenants. There is no other simple way around it however.

[xris]

Strange as it might sound, I agree that pooombah's advice is about the best possible.

Your simplest move is to settle as quick as the vendor wants, taking over the existing tenancy. As soon as possible you or then vendor should slap a 90 day notice on them (or keep them if you want). I always advise never taking on an existing tenancy unless there are very good reasons to.

Also, do not fall into the trap of interfering with the tenancy at this stage. It is not your problem at all, so don't make it your problem. No good will come of it.

In this respect you need to change your thinking completely. You say you want to make an attractive offer to get the tenants to agree to it. Why? It's nothing to do with the tenants. In fact if you do start showing the terms of the offer to the tenants the vendor might well be quite justifiably annoyed.

Keep it simple.

Deal with the vendor, not the tenants.

Let the vendor worry about the existing tenancy.

If earlysettlement is really so important, take on the existing tenancy.

xris

[Dean@Massiveaction]

Can Xris and pooomba be 100% agreeing on something. Must be a full moon!!

[stixster]

Thanks xris and Poomba for the advice.

I didn't mean to imply that I would deal with the tenants to the exclusioin of the vendor. I intended only to negotiate with the vendor and have him do what was necessary to expediate the sale for themselves.

I guess the best move is to take the tenants on, if it gets me a better purchase price. They are both on periodic tenancies anyway - so I guess the next step is to get some advice on how to terminate the current agreements, post-settlement, and then offer them a new agreement with updated rents at that point.

Thanks again.

[xris]

How about getting the vendor to give 90 days notice now, you agree on a sale with short settlement which includes taling on the existing tenancy (change of landlord). If the vendor is sick of the tenancy and wants nothing more to do with it this could be a good way to get a bargain price. If there is hassle when the 90 days are up I sure you can take in on the chin knowing you have a bargain.

xris

[Keys]

Just done this.

Signed new tenancy today.

Put offer on IP. Possession date was the first rent day following confirmation. Have just given the tenants 90 day notice and signed them to a new tenancy at the same time.

They're happy, I'm happy.

You might find that the discount on purchase price you could get will cover any risk of taking the new tenants.

After all, a $5k discount is a lot of missed rent and they could be lovely tenents.

The advantage I have now is that they have agreed to my terms which include charging them (if necessary) for debt collector fees should they do a runner.

Keys

[Monid]

Can Xris and pooomba be 100% agreeing on something. Must be a full moon!!

Argggh I agree as well... The apocalypse is nigh.

[SuperDad]

Argggh I agree as well... The apocalypse is nigh.

What's next? xris speaking at a RM event? Pooomba concerting to scientology?