First deal under contract!! Any last minute tips?
Hi everybody,
I have listened to almost all of the podcasts and have wanted to invest in a rental property for the past year.. I have been patiently waiting for a property to fit my criteria, which has been difficult in this market. I am located about an hour north of Atlanta, GA. Some details about my first deal...
1. 3br 2bth townhome, 1500 sq ft, built in 2005.
2. Asking price was $100k, first offer was $70k, and we settled at $77k and seller pays $1.5k closing costs.
3. It needs about $10k of work, and renovated comps are around $95-105k.
4. Rents in the area are about $900 a month, and the neighborhood has a $75 a mth HOA.
5. The area is probably a B-B+, however with a university expanding to about a mile away, and some relatively large businesses coming in about a mile away, I am hoping to see decent appreciation over the long term.
I am hoping to potentially do a little BRRRR action if it appraises high enough after the small reno. After factoring in property mgmt even though I will personally manage, I believe it should cash flow just over $100 a month. We close November 6th, and one of my biggest concerns is trying to find a renter during the holidays. I get a little comfort knowing rentals in the area are tough to come by, and typically 950+.
I have about a month to organize everything. I plan on getting some hard quotes from vendors for new appliances, flooring, fixtures etc to move quick once close is final. I also want to have my minimum tenant requirements, lease, policies, and application fees/process in place before we close. I will be spending a lot of my times on the weekends painting and doing what I can after we close so I wanted to make sure I got the "behind the scenes" work done first. I am also going to transfer it into an llc after we close, and manage it through a separate property mgmt llc. I have some last minute questions, and was hoping you guys could give me any tips you might have to avoid any mistakes/problems I may not have addressed?
1. Do you guys deduct mileage on your taxes/llc P&L every time you visit the property?
2. Should I set up an LLC before close? I am wondering if there are any tax issues I would run into if I buy the house in my name, then transfer it into a business (I know most of you arent tax CPA's but anecdotal stories would be appreciated).
3. I am going to market via flyers at local businesses, zillow, rent.com, all the standard sites, but was wondering if you guys have any creative strategies since it may be more difficult during the holidays...
4. Does anyone recommend a homeowners insurance company?
5. Am I missing any glaring issues? Sometimes its difficult to see the forest through the trees.
I am so excited, this is really a dream I've had since I graduated college two years ago, I have saved all I could (even with student loans) to pursue my goal of financial independence. Any help would be really appreciated! Thank you in advance!