I'm closing on my first rental property soon. We've agreed on a purchase price and we're about to be in contract. Financing is in order. I believe I've done appropriate due diligence, but I'd love to have the list reviewed and critiqued to make sure I'm not missing anything.
I have done:
Full property inspection
Obtained a full title report (schedule A and B) to check for leins on the property
Checked all permits and C of O's for the property with the town to ensure that all structures and past renovations are legal.
Performed a formal survey to verify boundary lines
Received reports confirming in-ground oil tanks have been removed according to code
Verified location and condition of well and septic
Do I need to:
Verify anything else with the title company? Title insurance?
Be on the lookout for any red flags with the title transfer, like the wrong type of deed?
Be worried about any non-code wiring or plumbing at this point, as it relates to fines/penalties directly after the closing?
Do an environmental inspection on the land itself to search for contaminates or...?
@Aaron K. If you have already had the inspection I wouldn't worry about the plumbing and electrical. If they didn't catch an issue, most likely a city inspector wouldn't.
Typically you don't do an environmental inspection on the land for a 2-4 family.
Title company will take care of the transfer but you should get title insurance.
Sounds like you have done a lot of Due Diligence, move ahead and start saving for the next property.
@Dave Savage Thanks for the response. I'll definitely get title insurance, that's a good suggestion. I'm not really clear on the whole title transfer aspect as this is my first investment purchase, so I just wanted to make sure I'm not missing anything major during the closing.
Aaron I am looking to secure my first rental property, and was thinking what level of due diligence is considered proper and appropriate. When you first came across your property, I'm sure the numbers presented to you portrayed a profitable scenario, so you moved forward. From a financial documents perspective, what did you request from the buyer; such as rental verifications, deposits, P&L statements, etc. Of course anybody can write down numbers and show them, but what as an investor should we be requesting in order to be able to verify whats presented as financial fact?
you sound like you have done enough. I'm a buy and hold investor and normally don't do that much. If you are worries then find a local mentor to review the deal.
Stephen Hundley MBA, Keller Williams Realty Acadiana | 337‑789‑6538 | http://HundleyRealEstate.com | LA Agent # 995681753
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