Did anyone else get burned trusting a seller's occupancy number when the move-outs happened in the 90 days before closing
I bought into a 7-bed in the Spokane suburbs at the end of 2022. Seller showed 6 of 7 beds filled, $4,800 a month coming in, and I priced the deal on that. What I found out after closing was that two residents had given notice in August and September, and both were gone by October 15. We closed November 3. The seller had not replaced them, had not disclosed the notices, and the resident agreements had month-to-month language that meant there was nothing on paper I could point to. By January I was at 4 of 7 and the operator was telling me the pipeline was thin because families slow down placements over the holidays. I lost about 14 months of stabilized income before we got back to 6 beds consistently. The house eventually got there but I paid a stabilized price for an unstabilized asset and I absorbed the gap myself. I now ask for every resident's move-in date, their current agreement term, and any written or verbal notice the operator is aware of, and I want it in a representation in the purchase agreement with a clawback tied to it. What I still don't know is whether any of that is actually enforceable when the operator, not the seller, holds the relationships. Has anyone gotten a seller rep like that to stick, or does it just become a negotiation after closing anyway?
