My name is Jesse and I'm looking to buy my first San Antonio BRRRR investment property in September/October timeframe. In the meantime, I'm hoping to assemble a checklist that runs you through the whole process from analyzing the property financials all the way through the first rent check.
Episode # 247 of the Greater Pockets Podcast was really great at breaking the buying, rehab and rental process into sections and then down further into individual steps within these sections. It was the “90 Day Challenge” episode titled: “How to Buy Your First (or Next) Rental Property by the End of the Year.”
For example in the sections regarding checking a property out they talked about due diligence items like calling utility companies to check for outstanding debts or checking the property for liens.
I plan on working closely off of this episode but I figured I should check the forums first to see if anyone has seen an existing checklist like this anywhere that I could build upon? (Why not stand on the shoulders of giants?)
Or perhaps BP members could even just chime in with individual steps that you feel are important or even have missed before?
I will share whatever I compile in the end here on the forums.
Thanks in advance!
I dont quite remember that far back to episode 247, but I can tell you that every city and state is different. For example, when you close at a title company, they are the ones who will check for liens and judgements on the person AND the property. You dont have to do that. If you are buying through a realtor, they should have checked with their client to begin with when they listed the property.
As far as the utilities, both City Public Service(elect.) and San Antonio Water Systems charge the person, not the property for their services. So if someone left a big bill, they go after the person. They will not put a lien on the property. To get services started they will ask for SS# or Drivers License. If there was a big bill, they will want a lease or closing papers to verify that you just leased or bought the property.
My point is that some things MAY be the same from the podcast, but some things are state, city or even area specific. Another couple of examples: It is extremely rare to find basements around here. With the dry ground and soil conditions, foundations tend to move quite a bit. This can cause issues with plumbing going into or out of the house. Just a few things to think about. I am sure that others will come up with more.
Howdy @Jesse Ballou
I have not watched that podcast. However, one of the first things I do after identifying a property is establishing a solid ARV for that property. The rest of the analysis numbers are dependent upon the ARV.
When putting your Rehab estimate together be sure to include some buffer. An additional 10 - 15% . Something almost always goes wrong.
Try to get your Refinance loan lined up as soon as possible. I get prequalified before I even purchase the property. Helps knowing the rate/term you should have.
Take lots of pictures before and after the Rehab. Provide a packet to the Refinance appraiser that includes copies of the pictures, a detailed list of the work you did, and copies of the comps you used to arrive a your expected ARV.
Start marketing the availability of the property for rent as soon as you start the Rehab. You want tenants screened and ready to occupy the property as soon as the paint dries.
Try to segregate Rehab Expenses to as small amounts as possible. $2,500 or less. This helps distinguish between Capital Expenses and Repairs. Mainly for tax reporting (Depreciation vs Operating Expense). Talk to your CPA about this.