Business Management

How to Organize Your Real Estate Documents

Expertise: Landlording & Rental Properties, Real Estate Investing Basics, Personal Finance, Real Estate News & Commentary, Business Management, Real Estate Deal Analysis & Advice, Real Estate Marketing, Mortgages & Creative Financing
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If you’re investing in real estate, you’re going to be filling out and receiving dozens of real estate documents. These documents will cover the details of your transactions, provide evidence on the condition of your properties, and in some cases, will be necessary to prove your ownership of the property. Keeping these documents safe, available, and organized is imperative if you want to continue making good investment decisions and ensure that your legal ownership and legal rights are protected.

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The Most Important Documents to Track

These are some of the most important documents to keep track of as a real estate investor:

Agent agreements

Your agent agreements will define your working relationship with a given buyer or seller, including any commission fee that you're going to pay, expectations for their responsibilities, and so on. It's important to keep these documents on hand in case you need to fall back on them.

Purchase agreements

Purchase agreements are contracts for the agreed-upon price and condition of a given property. They may include specified timelines for the transaction, or conditions under which the sale must take place. These could be important if you notice something wrong with the property after you’ve purchased it.

Related: The 3 Major Benefits of a Highly Organized Landlording Business

Amendments, addenda, and riders

Make sure you keep any additions to your core paperwork, in case you need to refer to them. It’s easy for addenda and riders to get lost in the shuffle when they’re introduced at a later date.

Seller disclosures

In addition to your purchase agreement, you may have a seller disclosure to worry about. Make sure you keep these documents together.

Home inspection results

Home inspections are vital in the purchasing process, as they inform you about virtually everything that’s wrong with the property. You may need to refer back to this document if and when you decide to make upgrades, or if you notice something wrong with the house that should have been caught during the inspection, so you can hold someone accountable for it.

Title insurance policy

Title insurance is designed to protect both buyers and lenders from title-related problems during transfer of ownership. Documents related to your policy are important to keep on hand.

Lease agreements

If you’re renting the property to tenants, you’ll also want to keep track of your lease agreements—as tenant disputes can, and probably will arise.

Tips for Efficient Organization

You’ll also want to follow these tips to stay efficiently organized:

Store physically and digitally when possible.

Some of the documents you’ll complete will need to have physical copies; for example, you’ll probably want a physical copy of the lease agreement, signed by your tenants by hand. However, it’s important to have a digital copy as well. Digital copies can be stored redundantly in the cloud, and are much easier to share and manage. By that same token, it can be valuable to print out your digital files and have a paper copy available to view, in case you need a quick reference without an internet connection.

Related: 6 Steps to Master Organization in Your Investing Business

Manage permissions.

If you’re storing your files on a cloud-based app, you’ll be able to give and manage permissions for who can access which file, and share those files with the people who need them. Learning how to manage these sharing settings is crucial for both your security and your efficiency. For example, if you’re investing with a partner, you’ll want to make sure they’re able to access whichever documents are relevant to their decisions and responsibilities. If you’re sharing a lease agreement with a tenant, however, you’ll want to make sure they can view it without being able to change the contents within the document.

Have multiple backups.

Always back up your files. No matter which method of storage you choose—whether it’s in a safe in your house, in a safety deposit box, or online in a cloud storage platform—there are going to be vulnerabilities. Make sure you have multiple copies of your documents in multiple locations to ensure you have them in the event of a tragedy.

Label and organize your folders.

Finally, you’ll want to create a system of organization that allows you to find your files quickly—regardless of whether they’re stored online or in a filing cabinet. For example, you might create a folder for all the documents related to a single property, and separate those files out based on what’s relevant to you as a property owner, and what’s relevant to you as a landlord.

Once your files are systematically organized, you’ll feel much more secure about the integrity and accessibility of your documents. It takes some time to set up a good system, and ongoing effort to maintain that system, but it’s worth it if you want to stay organized.

How do you keep your real estate documents organized?

Comment below!

Larry is an independent, full-time writer and consultant. His writing covers a broad range of topics including business, investment and technology. His contributions include
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    Jerry W. Investor from Thermopolis, Wyoming
    Replied almost 4 years ago
    Chris, Nice article on the various ways of exiting real estate investing or even for shifting your investing strategies. While Dodd/Frank has complicated owner financing it is still possible and all of the above strategies will still work. An owner financier should take the time to at least brush up on the exceptions available, and of course knowing the laws of the state where the property sits is very important.
    Jilly Whiting
    Replied almost 4 years ago
    Can someone write an article on this! How to legally sell w/ owner financing these days. Would love to know!
    Chris Clothier Rental Property Investor from memphis, TN
    Replied almost 4 years ago
    That’s a great request, Jilly. I, however, should probably let someone more versed in owner financing write that one! Hopefully, BP can send out a request and get that article added. Chris
    Matt Cyberski Investor from Chicago, Illinois
    Replied almost 4 years ago
    Here it is!
    Chris Clothier Rental Property Investor from memphis, TN
    Replied almost 4 years ago
    Thanks for reading Jerry! Great points about Dodd/Frank and good advice to stay up to date on your local and state laws. I appreciate your contributions. ~ Chris
    Krishna Patel
    Replied almost 4 years ago
    Never, Buffet rule. Why sell when heirs gets it at up basis Enjoy cash flow for ever!
    Andy H. Investor from Stockdale , Texas
    Replied almost 4 years ago
    Because your heirs may not want anything to do with owning rental properties and the headaches that sometimes come with them. This is actually a great opportunity for a younger investor to get into the game: Find the landlord who just wants/needs to get out and buy their properties.
    Chris Clothier Rental Property Investor from memphis, TN
    Replied almost 4 years ago
    Krishna, Thanks for reading and taking the time to leave a comment. I think many would agree with you. It just makes sense to hold a cash flowing positive property as long as it is, well, cash flowing! But what does an investor do when their options are declining? When they feel their backs are up against the wall? Hopefully, this article gave them a few ideas. Best ~ Chris
    Thomas Rutkowski Financial Advisor from Boynton Beach, FL
    Replied almost 4 years ago
    Number 1 is the best way to deal with the capital gains tax. The key to investing is to buy low and sell high. 1031 exchanges force you to turn around and buy high again. But you don’t have to accept installment payments for the term of the loan. I can think of a couple of innovative twists that you can put on this that will let you put a lump sum in your account AND defer the capital gains tax. This leaves you free to invest your money anywhere you like in order to maximize retirement income. If interested in learning more, please contact me privately so as to not take this thread off in a wholly different direction.
    Replied almost 4 years ago
    I am 76 and need to start thinking about the inevitable. I want to learn more about ways to keep more or passing more onto heirs after taxes. #1 Can the heirs depreciate real estate that I have already depreciated (new basis)? #2 What is the 29% or ? where you need to pay capital gains on the entire sale even that not yet received? #3 How do I best reduce my net worth to a point where I qualify for different old age programs such as assisted living etc. Like everyone I want to give uncle Sam the very least that can still be considered somewhat legal. Any tips will be totally confidential.
    Aaron J. Mandel
    Replied about 1 year ago
    Nicely written! Though the BiggerPocket audience is not typically buying into Home Owner Associations/ Co-Ops, it might be relevant to note the value of tracking legal policies (CC&Rs), historical finance documentation (e.g. reserve studies) and governance notes (board meeting minutes) if buying into a multi-owner multi-unit property.