Hello, my wife and I have just purchased my first property for investment purposes. We truly just closed a matter of hours ago, very excited!
My primary question: What are the immediate next steps?
We will do a final walk through at which point we will get the keys and get copies of the leases. I assume we collect a pro-rated amount for the rent already paid to the previous owner. Do I need to send a notice of change in ownership to the tenants? As stated above, what are the next steps to ensure a smooth transition for both me and the tenants?
Notes on the property: I think my wife and I did well for a first venture to get our feet wet. The 10,000 foot view is that this 5 unit was purchased for $85,000 and it brings in $2,650 a month in rent. 3 out of 5 tenants have been there for 5+ years, 1 has been there for 3+, and the last is brand new. The neighborhood runs under a 5% vacancy according to the commercial inspection and appraisal which makes sense because the new tenant was ready to move in even before the departing tenant was moved out. We have a 10 year commercial loan at about 5% apr and after a 25% down payment, the mortgage and interest, insurance and taxes (which are high) will run about $1,000 a month.
Thanks for all your help and advice to this green investor!!
I would want to get the leases, move in inspections and security deposits sorted out ASAP. Once I had my legal documents I would introduce myself to the tenants in a nice letter along with the information on where the new check should be sent. When you are introducing yourself expect questions about raising of the rent, maintenance questions, etc. So be ready with your answer.
You should have collected the pro-rated rents in escrow. Send out the notices. Let everyone know where to pay rent, who to call for maintenance and other issues, where to call for emergencies.
I setup numbers through a company called toktumi. I assign names to the numbers and have them transferred to my cell. I can call out from my cell and the number that shows up on the caller id is the number that they originally called.
This way I can tell if I am getting a call for an emergency, rental, or routine call. I have 7 different numbers so I can even tell which property someone is calling about.
It is good to have a little advance warning so you can get your head in the right place for the calls.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.