Under Contract for a Duplex in Los Angeles...What now???

Question

Hi!

I just recently got an offer accepted for a duplex in Los Angeles using an FHA loan and this would be my first property if I get it! My plan is to renovate, get some tenants in the extra unit and house hack it!

I am extremely excited but find myself asking myself "What now?". We are in a 60 day escrow period as that sale is contingent that the owner's find a new home and the residents of the back unit vacate.

So what is there for me to do during the escrow period? What should I look out for? And what would be a good thing to start planning and/or working on?

Any help would be much appreciated!

Shaun Weekes · Answer

Make sure that you have the following ready for your Loan Officer and Realtor

• Make sure the rate is locked
• Keep your paystubs up to date and handy for the loan officer
• don't apply for any other credit or anything that will affect your scores or DTI
• Make sure the home inspection and all home related items are completed.
• Make sure all Realtor FHA disclosures are fully executed
• 
• That should be good and congrats on moving forward.

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• 
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Nabil Suleiman · Answer

@Alejandro Garcia

Inspections, due diligence on the property, decide if you are leaving as is or adding square footage, invite GC's and or subs to come in and quote for work at the same time as inspections so you aren't being rude to the occupant and respecting their time, invite architects if you are modifying anything, also invite them if you are converting the garage into an ADU, if you are terrible and design, find someone who isn't, most GC's are so don't rely on their sense of design. If you want to do everything yourself look at the list above and start putting together all the things you would need, the subs you would manage, the materials you want for finishes, if you are upgrading panels, plumbing, windows, or anything major familiarize yourself with LADBS. thats what immediately comes to mind without knowing many details of your purchase or your goals.

edit:

Rum comps for rehabbed duplex in the area, see what budget you may be able to refinance into in 6-12 months. if there are tri or quads in the area then consider an ADU(or two) on your lot. consider the square footage of your comps and what opportunities you have. read about ADU laws and familiarize yourself with the opportunities.

Account Closed · Answer

Learn the CA landlord-tenant laws.  I used this book, which includes contracts and forms needed for CA:

https://store.nolo.com/products/the-california-landlords-law-book-lbrt.html

Congratulations!

Alejandro Garcia · Answer

Thanks for the tips! Seems like I should be able to keep myself busy after all.

Lynnette E. · Answer

Ask for and look at the seller's disclosure paperwork.  Really read it and see if you have questions.  Example it may say roof leaked-fixed 2018.  You may want to know where did it leak, did it cause flooding or did the drywall get wet, how was it fixed?  They may have patched the roof, sealed around the chimney, etc. and let the drywall air dry without looking behind the drywall or under the floor covering.  Or maybe the roof leak just dripped and they caught it in a bucket.  But now is the time to ask and look and know what you are buying.

Choose the inspection company.  Ask to see samples of their work, some are much better than others.  Some will give cost estimates to fix stuff.  Some just say "check with a licensed XXX" for everything.  I try to get one that is NOT recommended by the realtor as they often have a vested interest in the sell closing and seem to get the less critical inspectors.  I want one that calls out everything.  And I like when they put in cost estimates to fix stuff.

Read the inspection report and the disclosure and see if there is a deal breaker, or if you can negotiate some of the repairs or if they show what you were expecting.

As soon as the inspection part is done and all is acceptable, apply for the loan, get your information together and submitted, and submitted again and again...

Stay on tp of their contingencies.  Can they pay the renter to go away, was the property broken into after he left?  Are they actively looking for a new house, did they get an acceptable offer, what date is their escrow scheduled to close?

Theresa Duffy · Answer

Alejandro, I can't answer any of your questions because I simply don't know the answer myself as a real estate newbie, but congrats on your first property!!! What a huge step!

Under Contract for a Duplex in Los Angeles...What now???

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