I'm panicking! Just bought my first property.
Hi folks. I joined BP awhile back when my wife and I decided that we really wanted to get involved in real estate investing, namely flipping. I've tried to educate myself and have looked at a bunch of properties but never found the right one and didn't feel we were totally prepared anyway. I kind of laid off my search over the past few months.
Fast forward to last month when my agent sent me a listing for a foreclosure property about a mile from my home. It's a 2bd/1bth, detached single family, 1201sq ft, 1 car garage. Listing price was $125k. Property taxes are approx $4200/year, which is low for this area. Got a showing and the house seems very solid. Needs updating, but no signs of water damage anywhere, no mold that we could see, finished basement was totally dry, newer windows. Just needs a good cleaning, a kitchen and bath update and some cosmetic work. We may opt to put in new floorsThe house is a 4 minute walk to the train station and a 2 minute drive to 2 major highways, so an amazing commuter house. Great rental potential. My agent and I checked rental comps and it appears that $1600 - 1800/month is a solid number. We told my agent that we wanted to submit an offer. He got back to me the following day that the house was going to be auctioned off online.
To make a long story short, I signed up for the auction site. The opening bid was $52k and there was a reserve (plus this had to be an all cash sale). I wasn't super keen on buying this way as I had no experience, so I decided I would only go as high as $80k, figuring that I'd either get outbid or the reserve wouldn't be met. In the last minutes of the auction, there was some steady bidding action. When the price got to $77k, I submitted what was going to be my final bid of $79.5k. To my surprise, I won the auction but the reserve wasn't met. About 30 minutes later, I got notified that the seller decided to take my offer, even though it was less than the reserve price. That was 3 days ago and myself and the seller have already signed the contracts and earnest money has been sent to the title company.
So why am I panicking? I feel totally unprepared. I had to act so fast because of the auction and now I kind of don't know where to start. Even though I read so much months ago, I never really read anything about being a landlord. I also didn't know much about doing all cash purchases. I'm going to try to search for as much information as I can on my own, but if anyone has any advice or links to helpful posts or websites, I'd truly appreciate it!! Here are a few of my big concerns:
1. I'm laying out a lot of cash. I'm planning on getting an equity loan from my bank after 6 months to replace my bank account. Any advice on this?
2. Any good sites on what order to do rehab work in the house? Not sure where to start.
3. Where can I find the best info on being a landlord? I see there is a lot right here on BP that I'll read through, but anything else? Also, what about lease forms, etc.
4. How do I do background and credit checks for potential tenants? Am I better off listing with a real estate agent rather than placing ads?
Sorry for the long winded post, but I'll be grateful for any advice. Thanks!!!!!