Someone I know is trying to buy a property that is foreclosed by Fannie Mae in Los Angeles. The unit is currently occupied by the tenant and its on month to month lease. The realtor is saying that:
1. If you need to evict the tenant, you need to pay at least $7,000 relocation but as high as $13,000 if they are elderly or have children.
2. If you do not want to evict the tenants, you can only raise the rents like 2% every year.
Is this worth the trouble to purchase a property like this?
Who is the tenant paying rent to ?
Areas of LA have rent control, that is the reason it may be difficult to get rid of them.
They may be allowed to stay.
Talk to a real estate attorney in the area of the property. If they are buying for a primary residence, there may be a loophole to get tenant out with a month to month agreement.
If they have a lease it is valid.
the rent may be very low.
I know a guy in LA who has lived in a unit in LA for over 25 years.
His rent is about 30% of what current market rent is. He’s not going anywhere.
San Francisco has similar restrictions.
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