JUST BOUGHT MY FIRST INVESTMENT PROPERTY! NOW WHAT??

Question

So I have been a bigger pocket member for maybe two months now and I bought my first property. Feels like it took forever. But after I purchased,(close date is may 31) I realized I didn't do as much research on what to do after the purchase as I did on deal analysis. Now Im not sure if I need an inspector to walk it first, contractor first? Walk it at same time? Obviously I am trying to get out of the hard money loan as quickly as possible so I am not looking for much down time or any lull days. Any type of assistance or anything I am not mentioning that I need to know would be a great help. This is the first of many and I am very excited! Thanks in advance.

William Anderson · Answer

If you are going to be buying more as you stated you were in the same area, you need to find a very talented contractor who can walk the property with you.  A property inspector is great but in the end, what is found may have to be repaired and you will need a return visit with the contractor.

I use an excellent contractor who knows that if I buy it, I will pay him to fix everything that is wrong.  He is fully invented to find everything that is wrong.  He will bring in an AC person or Roofer if he needs another set of eyes.  After the walk, you have an estimate on repairs.  Your real estate agent can use this during the due diligence period to negotiate a better price or have them do repairs.

My contractor was a termite contractor for several years so he looks for wood destroying insects as well.  When the seller has the termite report, my guy can help them with repairs.

It does not hurt to have both inspectors but you must have a contractor.

Ben Firstenberg · Answer

Hey Holden, congrats!

When you say the close date is May 31st, I'm thinking you really mean to say that you're "under contract" for a home? If that's true, the biggest things are to get a grasp of your due diligence (DD) period (if any) and your financing contingency (if any).

DD is absolutely the time to bring in an inspector. I'd start there. It'll cost a few hundred dollars. Definitely walk the property yourself. Unless you're certain the property needs work, you don't necessarily need a contractor yet. Even if you don't have any due diligence period (common with wholesales) I'd advise having an inspection done before you close.

Sounds like you have your financing figured out so I won't go into detail there. Just check in with them frequently to make sure they're ready to close on the 31st.

As far as limiting down time, you won't be able to actively market the property for rent until you own it, but you can prepare all of the advertisements and documents you'll be using to lease the property. Ideally you'd want to have all of this ready to go on the day of closing. If it's going to require work before you can lease it, THEN find the contractor and work with them to make sure it gets done as soon as possible after you close.

Good luck man! Very excited for you!

Mason Liu · Answer

Hey Holden,

Congrats on your first purchase! It would be ideal to get an inspector and experienced contractor in as soon as possible, at least one of the two so you can get a firmer idea of what the renovation costs and timeline will look like. Furthermore, you'd be able to go back to the seller and negotiate if there were any unexpected items that came up in the inspection that will take money and time to rectify.

If you're getting a contractor in to walk it, give him the scope of work prior to his walk so he can get back to you with an itemized cost of the scope of work. If it doesn't look reasonable, get another contractor in (you should be getting multiple quotes from multiple contractors unless you have a deep relationship with one particular contractor and know he is giving you a great price).

Hope this helps!