First out of state purchase done - here are some lessons

[Patrick Britton]

Earlier in January I closed on my first out-of-state rental. As a former lender and current realtor with a focus on real estate investors, I am happy to say that of the variables known, I was prepared for any eventuality. However, nothing ever runs perfectly smooth and here are some of the newly learned lessons.

• It is impossible to get a conventional loan where the loan balance is less than $55,000
• don’t schedule a home inspection if the roof is covered by snow. The home inspector will say that because of the snow they were unable to thoroughly examine the roof. This means you will have no idea if the roof needs to be replaced immediately!
• make sure the home inspector is able to inspect a detached garage
• make sure at closing your agent gets all keys, including the ones to a detached garage or other outbuilding
• if possible, it’s best to purchase a rental that is vacant. This way, the property management company can vet the tenants (correctly) and you will not be relying on the word of the previous seller or property manager. I realize that a property manager may charge an entire month’s rent to find a tenant as opposed to a modest fee to assume the management, but it is worth it...
• If you intend on renting to a section 8 tenant, try to find one in which the voucher amount is considerably larger than the tenant’s portion. This can be tricky with anti-discrimination laws but suffice it to say that the larger the voucher, the less the chance there is for a tenant to miss rent

That’s about it. I am sure that the next purchase will yield a few other little goodies. 

[Tom Ott]

Originally posted by @Patrick Britton:

Earlier in January I closed on my first out-of-state rental. As a former lender and current realtor with a focus on real estate investors, I am happy to say that of the variables known, I was prepared for any eventuality. However, nothing ever runs perfectly smooth and here are some of the newly learned lessons.

• It is impossible to get a conventional loan where the loan balance is less than $55,000
• don’t schedule a home inspection if the roof is covered by snow. The home inspector will say that because of the snow they were unable to thoroughly examine the roof. This means you will have no idea if the roof needs to be replaced immediately!
• make sure the home inspector is able to inspect a detached garage
• make sure at closing your agent gets all keys, including the ones to a detached garage or other outbuilding
• if possible, it’s best to purchase a rental that is vacant. This way, the property management company can vet the tenants (correctly) and you will not be relying on the word of the previous seller or property manager. I realize that a property manager may charge an entire month’s rent to find a tenant as opposed to a modest fee to assume the management, but it is worth it...
• If you intend on renting to a section 8 tenant, try to find one in which the voucher amount is considerably larger than the tenant’s portion. This can be tricky with anti-discrimination laws but suffice it to say that the larger the voucher, the less the chance there is for a tenant to miss rent

That’s about it. I am sure that the next purchase will yield a few other little goodies. 

 Any more specifics on the property and where you found it? I am just curious.