New purchase checklist (by S i d [MO]) Jan 9, 2019 6:31 AM|
New purchase checklist (by 6x6 [TN]) Jan 9, 2019 7:14 AM
New purchase checklist (by S i d [MO]) Jan 9, 2019 7:23 AM
New purchase checklist (by 6x6 [TN]) Jan 9, 2019 7:35 AM
New purchase checklist (by Richard [MI]) Jan 9, 2019 9:03 AM
New purchase checklist (by plenty [MO]) Jan 9, 2019 9:22 AM
New purchase checklist (by S i d [MO]) Jan 9, 2019 9:44 AM
New purchase checklist (by Robert J [CA]) Jan 9, 2019 10:12 AM
New purchase checklist (by David [NC]) Jan 9, 2019 11:04 AM
New purchase checklist (by CX [WA]) Jan 9, 2019 12:25 PM
New purchase checklist (by BRAD 20,000 [IN]) Jan 9, 2019 6:55 PM
New purchase checklist (by Robert J [CA]) Jan 9, 2019 7:43 PM
New purchase checklist (by #22 [MO]) Jan 10, 2019 11:01 AM
New purchase checklist (by S i d [MO]) Posted on: Jan 9, 2019 6:31 AM
Continuing to make checklists so I don't miss any of the steps that sometimes come back to haunt me when I forget. This one is called "New Property Purchase Go-Live". This list is for once I have a property under contract.
Below is my list so far, not necessarily in time order. What other things do you do?
* send copy of contract & earnest money to Title Company
* get hazard & liability insurance quote
* estoppel letter signed by all tenants
* order any professional inspections
* bids for repairs
* review copies of existing leases, if any
* review copy of settlement statement; be sure tenant deposits are credited if applicable
* if vacant, set up "For Rent" online advertisement
* get closing $ from bank via cashier's check or wire
* log address on city rental registry website
* register address with land lord utility account
* update monthly tax, insurance,and CapEx escrow savings transfer
* welcome letter to tenant(s), if any
* verify tenants have established trash service
* set up tenant payment method (auto-draft)
* get tenant emergency contacts & employer information
* add property address to spreadsheets: Rent roll, Maintenance, Deposits & Escrows
* schedule first inside maintenance visit within 2 weeks
* take pictures inside & outside
* if no "move in" checklist from previous owner, create a "current condition" checklist & have tenants sign/date it
* put tenants on our lease if not already on a lease
* log make/model/serial# of any LL owned appliances, HVAC, water heater, and window AC units --173.20.xxx.xxx
New purchase checklist (by 6x6 [TN]) Posted on: Jan 9, 2019 7:14 AM
I won't be very much help on this, but I would try to be there when professional inspections are done. I saw one at my neighboring house, that is being sold,where the inspector removed the door for crawl space entry,got down and poked his head under and shinned his flashlight in there and never crawled in and looked. I wonder how much he got paid! --73.120.xx.xxx
New purchase checklist (by S i d [MO]) Posted on: Jan 9, 2019 7:23 AM
6x6, wow, that's a pretty poor inspection! In my town/state, if an inspector did that and later any obvious issues surfaced that he should have caught, the Buyer could sue him for negligence. Last time we received a copy of a professional inspection that a previous buyer paid for and backed out of based on the results, it came with detailed reports, pictures, systems covered, etc. It was 60+ pages, about half of which were pictures from attic to crawlspace and everything in between.
I don't hire comprehensive professional inspectors. We do termite (it's free), and if I suspect roof or foundation issues I'll have a contractor stop by and check on it. Those are the "big ticket" items. I know if plumbing is galvanized it's gonna die soon and just reflect that in my offer. Ditto HVAC system & water heaters. If any mechanical system/fixture is old than 10 years and the Seller doesn't have maintenance records, I assume it was abused and is on life support, so once again I adjust my offer to reflect that.
Back when I was a newbie, yes, we hired a Pro to inspect everything and I went along and learned a lot. After 14 years as an investor, I now feel comfy enough to do my own basic inspections. --173.20.xxx.xxx
New purchase checklist (by 6x6 [TN]) Posted on: Jan 9, 2019 7:35 AM
The lady that was buying the house ended up backing out. She was an investor from Florida. I was debating whether to get involved or not and let someone know,but then she backed out. --73.120.xx.xxx
New purchase checklist (by Richard [MI]) Posted on: Jan 9, 2019 9:03 AM
You know Sid, that's a pretty complete list.
I don't know if these are applicable where you are but I also do them:
1) Check all trees for insect and other damage. (Oak leaf blight and pine beetles are pretty heavy where I'm at, and trees can be expensive to remove, especially if close to the house. I've lost 9 big trees in the last year. It can cost a lot, like as much as $2500+ to cut a big tree by a house. $200 to $500 for medium ones further out in the yards. Some houses have 10+ large trees in the yard.
2) I check septic systems real well. Scope the lines. I'm especially cautious where there are trees near lines and tanks and leach fields. Replacements, if needed, run into the thousands.
3) Since I have some places that are more rural (not downtown), I always check and ask neighbors (older folks especially) about previous tenants and how trash was handled in the old days.Many times before modern trash handlinghandling, they just burned it and dig a hole in the yard, pushed everything in it and covered it up. Older places from before 1960 were common to have this done. It creates not only a waste dump but possible contamination.
1) one place, the neighbor across the street bought their place and it was a big mess from previous bad tenants. Did they get a dumpster? No! They got a guy with a backhoe and dig a big put and buried at least 2 Big dumpsters of everything there and covered it. Their kids play on top of it today. This was only 3-4 years ago.
2) Low end tenants here do not even think of paying $30 a month for trash service. If it's not on the property tax they burn it and bury it, if they even bother to bury it. Good ones take bags of trash to the gas station and throw it in those places cans. If you make them sign up for trash service, they cut it off the next month. (Good idea for regular inspections. They are so lazy they will pile 50 big bags of trash in the back yard and let it rot.You MUST keep on top of this.
As a side note;: if you or your landlord friends are experiencing this, it's a money making deal to get an old pickup and do a private trash service for all your places. Up the rent by $25-30 a month and collect trash once a week and deal with it. 20 places x 4 times a monthx$30 = $600 a month for maybe 15 hours work. If the houses are not too far apart, about 4 hours could pick up all loads each collection day. That's about $40 an hour, less disposal fees. Let your cheapest helper do the work.There might be regulations that could make problems, but there's usually some way to work around them. --23.121.xx.xxx
New purchase checklist (by plenty [MO]) Posted on: Jan 9, 2019 9:22 AM
Septic tank? Common ? Basement leaks? Permits? Good list! You are rockin it! --99.203.xx.xxx
New purchase checklist (by S i d [MO]) Posted on: Jan 9, 2019 9:44 AM
Richard, good point re a possible money making "private trash" service.
Our lease requires tenants to have trash service, and if they let is lapse for over 5 business days, we establish it for them and bill them. So they get a can whether or not they decide to use it. I agree it's a craps shoot, but I've only ever had to hire a trash service for someone twice, and both times they used it and paid. Why they simply didn't do it themselves??? *shrugs --173.20.xxx.xxx
New purchase checklist (by Robert J [CA]) Posted on: Jan 9, 2019 10:12 AM
I now set up a "sellers backing out fee", each time I sign a contract to purchase. They must cover my costs for the preliminary title report, any inspections and fee's paid to the City on mandatory procedures. Also any escrow fee's. IN one case I sued for my bank loan appraisal fees and won. --47.156.xx.xx
New purchase checklist (by David [NC]) Posted on: Jan 9, 2019 11:04 AM
Call Electric, water and gas and get utilities in your name.
When rented - give tenant numbers to electric, water, and gas (propane tank co) and tell them to get the account changed
Call town permit department and get a copy of the well and septic permit - save for later. Make sure the # of bedrooms supported on the docs equals the number of bedrooms you paid for.
New purchase checklist (by CX [WA]) Posted on: Jan 9, 2019 12:25 PM
Robert J [CA] that's a great idea, the "sellers backing out fee." How do you get them to accept it? How do you word it? What do you do if they refuse? --174.21.xxx.xxx
New purchase checklist (by BRAD 20,000 [IN]) Posted on: Jan 9, 2019 6:55 PM
Locks changed to MY iCores.
Set up file folder
Set up digital folder for pics, scans...
Fresh app from each res
Existing residents sign MY lease
New purchase checklist (by Robert J [CA]) Posted on: Jan 9, 2019 7:43 PM
I was in the process to buy a 20 unit apartment building valued at 2 million dollars. I had been the in-house contractor for 10 years. Since there were no real estate agents involved and I was buying it as-is, the agreed purchase price was going to be 1.8 million.
In order to get those funds, I was going to sell two or three "C" class building to buy this "A" class complex. We had agreed on a 3 month, 90 day escrow. If my building didn't close, I'd have to come up with the funds through other means, like selling stock.
Since I had to put in motion the sales of my properties, I demanded, not requested, a "Backing Out Fee to cover any costs".
If the seller didn't agree, then she would have two choices:
1. Extend the escrow period by 30-60 days
2. Allow me to back out of the deal.
She didn't like those options so she signed my "Backing Out Clause".
After selling two of my "C" class buildings and having almost 1 million dollars in escrow, she and her kids decided not to sell, backing out of the deal.
If I didn't find another property to exchange into, my taxes would be around $300,000. Also I paid over $100,000 in closing costs.
So her options were to sell me her property as agreed or cover my costs to buy something else -- or pay me off or I will sue for my loss of income and opportunity.
When the seller signed my "Backing Out Clause" it was in the escrow offices and I had her signature notarized. She had forgotten about that and her attorney said that I can't prove that she singed the agreement. 80 year old seller and 60 year old attorney.
So I purchased another property submitted my extra costs. We came to a settlement. I had acted in good faith and now had the burden of getting a loan, appraisal fees and higher cost due realtors. --47.156.xx.xx
New purchase checklist (by #22 [MO]) Posted on: Jan 10, 2019 11:01 AM
Copy of spare keys.
I see you had listed insurance quote and while it may be overkill: consider adding: pay for insurance policy at close - saves time and an extra check.. has been going smooth for me.
On other idea: add: review re tax assessment to determine if it's worth challenging the assessed value. I'm seeing huge over assessments, of course in the government's favor. This can boost cashflow 10-40/ month in some cases I'd guess.