After much searching (I know.....everyone goes through this) I have had my offer accepted on my first rental property, an FSBO found on Craigslist. It's a 2 bedroom, 1 bath previously rented but vacant all brick house, no garage in a solid lower middle class area with other rental and non-rental homes. The house seems very sound but will need interior updating to the tune of about $10K in my opinion. Asking price was $40,000, my offer of $47,000 was accepted. It is suggested by the seller that I send $1,000 earnest money and then determine a suitable title company for closing. They are asking that I sign the purchase agreement now but delay the closing until after Jan. 1 for tax reasons. What do I do next???
I could pay cash but am hoping to leverage a $50K interest only loan @ 7% (12 mth. max. term) commitment from a friend to do the purchase and rehab along with a hard money loan and using as little of my own money as possible.
Please do not give the seller your earnest money. Please for your protection place it in a Escrow/Title Company. Not sure why they are asking for a later close on the deal but I would get a firm closing date in writing.
Please get your p/s reviewed prior to signing and no money goes anywhere unless you have a signed contract. I would also confirm that the "seller" has the Title of the property you want to buy. Be cautious!!
You might have done some of the leg work but ensure the title is in their name. As stated above, do not send any money to anyone ever! A well known Craigslist scam does this.
I have everything lined up for the rehab before I close. The dumpster is there the day of closing and work also starts that day or the day after. I lock my contractors in to pricing and dates as good contractors are often booked weeks out.