I am adding this after reading that someone bought a property and had extra bills because they couldn't have utilities on before closing. WRONG.
How to find properties in the US -
Firstly - DO contact a licensed buyers agent within the US - they ARE there to work for YOU - part of US real estate law is CLIENT ABOVE SELF. How many "buyers agents" selling US property in Australia can seriously say that they would lose their livelihood for ignoring that LAW and how many do you SERIOUSLY believe are putting YOU as a client above themselves.
Buyers Agents will send you a list of every available property in the entire market that meets your needs - which might be, younger than "x" year, minimum 3 bedrooms, 2 bathrooms, double car garage in only one zip code - but you will get EVERY property that comes out that meets that criteria! FOR FREE WITH NO OBLIGATION TO BUY...
A buyers agent is NOT someone who buys a property and resells it. That is a wholesaler or a flipper. Have a very healthy skepticism of someone selling bulk as to their ongoing concern with your property or even how likely it is your property will rent by location. SO DO YOUR RESEARCH.
www.redfin.com - without contacting any real estate agent, this is probably the best of the tools.
www.zillow.com
Sadly once you buy a property you can change the purchase price if you are the owner....so be aware of skewed prices...HOWEVER it is great for seeing how MANY properties have sold in your area in the last 6 months - if a lot, in this market under 80k? Yep, they were sold to investors - how will your enclave look in 5 years time if foreign owners have a tenant majority populated zip in an area that wasn't crash hot to start with?
www.listingbook.com - like Domain on steroids for Atlanta at least... you need a login but you are more than happy to use my random one to get a feel for it - it has random suburbs in there.....
username: selectusaproperty
password: atlanta
Go to area sales of a house you are looking at - find the same subdivision and go from there.
Never buy at the back of a enclave - if any house is at the front of the enclave for rent, they will have to drive past your house to find it... common sense - be the one at the front of the enclave and you will have free advertising!
GOOD SCHOOLS, GOOD SHOPS, TRANSPORT - be walking distance to these....you will always, but always have a tenant.
ALWAYS IGNORE WHAT A PROPERTY SOLD FOR DURING THE PEAK OF THE MARKET
How to find out what your property might rent for
www.trulia.com
Type in the address
www.redfin.com
You can use this as well
www.gosection8.com
Pretend to be a tenant looking for a house in the street of your location
CALL A HOUSE FOR RENT ON THE STREET YOU ARE BUYING - OFFER THEM $100 less and see if they will take it - if yes, maybe you don't want to to buy there!
UNDERESTIMATE INCOME OVER ESTIMATE EXPENSES
IF current rents look like you can get $1000 - do your maths off $900 a month. If you come up with $200 per month in expenses - do your maths of $300.....
Think:
Lawn Care
Gutters cleaning
A/C quarterly inspections
Roof repairs
Taxes
Insurance
Filing fees for taxes
Asset protection - LLC setup and ongoing business licenses etc
General maintenance
Pest maintenance
Vacancy
HOA Fees if applicable
Property management fees
Renewing or reletting fees for leases (most don't charge this but some do)
Utilities if you are paying sewer or trash etc
Then think again because I will have missed some from the above ... then pad it and pad it some more
IF THAT STILL MAKES SENSE THEN GREAT....
WORK BACKWARDS
Total Outlay = purchase price, plus repairs, plus closing, plus facilitation = amount you will not be divorced over.
Obviously buying a property that needs less repairs will allow you to buy a property at a higher purchase price!
Process for purchase
Any real estate agent can step you through the purchase process. Ask a million questions.
You write an offer on the property to buy it.
The offer is accepted, rejected or you are asked to submit a "highest and best" offer - ie there are multiple offers and you get a chance to revisit your offer price... (hate that - you could be the highest already)
You officially exchange contracts - ie the seller accepts your offer and you exchange contracts.
Due Diligence
Once contracts are exchanged you enter due diligence. This means that your agent will liaise with the seller and listing agent to ensure all utilities are on and you conduct your home inspection - it the utilities are NOT on, you will get an extension or have the right to back out of the deal......!!YOUR CONTRACTOR SHOULD BE THERE AS WELL TO GIVE YOU A QUOTE FOR COMPLETE REPAIRS WITH UTILITIES ON!!
If something comes up at due diligence during the home inspection and your home inspector makes "strong recommendation" for further evaluation by a licensed and certified technician, you can have your HVAC tested, your roof tested, your plumbing inspected further.... (plumbing is never that expensive - but a new roof can be a few thousand)
IF YOU SEE ANYTHING DURING THIS TIME FRAME YOU DON'T LIKE OR THE QUOTE FOR REPAIRS IS GOING TO BE OVER THE ??5k YOU BUDGETED.... BACK OUT AND GET YOUR EMD BACK - you will still have had to pay for your home inspections but that is all....
Assuming you proceed to closing... you then have anywhere from 10 days - ?? a month before closing occurs - title is cleared, liens are cleared, your title insurance is put in place and then YAY, closing - and you get sent the wonderful title deed for your hot little hand!
VERY ROUGH OUTLINE OF AVERAGE CLOSING WITH 5k OF REPAIRS....
Please be very aware that many wholesalers and flippers use this area to "rape" you.... if you are receiving a quote at over 10k, be dubious -ask for a breakdown and get a breakdown by line item....if very suspicious - get 2 quotes from any other contractor in town.
Why do I include project management and renting the property in my fees? Because every cent counts to me as an investor and every second counts and this area is where we are most open to being completely ripped off on. If your property manager is trying to rent 30 properties at once - what are they doing to promote YOURS ahead of everyone else's.
5 days before closing = order utilities (they will be switched off after due diligence), line up the tradesmen
2 days before closing = walkthrough verification of all supplies (you're making a list and checking it twice!)
Day before closing = buy all supplies - love the shopping trip
Yay......Closing.....for rent signs up put up around neighborhood, advertising in full swing...
Day 1 - morning = carpet rip out, floor prep, new tacks laid as needed, doors hung that need hanging, anything that needs removing before painting needs removing - faceplates, light fixtures being replaced etc...sheetrock patching occurs whole day as needed. Afternoon = tape off and prep for painting
Day 2 - painting (yard work/roof work outside)
Day 3 - finish painting/garage door installed if replacing
Day 4 - finish fit off/carpet laid/appliances delivered
Day 5 - cleaning - Quality control
Day 6 - pest control
... and on the 7th day.....lol....
Day 8 is quality control and haul back of anything that might even vaguely have issues.
BE VERY VERY VERY AWARE THAT TIME IS MONEY - just like Australia - if your property doesn't photo well at move in, you HAVE to have this work done as quickly as possible.
Move in date is the 1st in the States pretty much across the board so you do try if you can to strategically close properties when possible around best rental dates...however realistically if you close on the 25th - the 1st of a month, you are probably not looking at a move in until the 1st of the next month...you can fluke it... but rarely. Most make their mind up to move by the 18th of each month for a move in on the 1st.
How to find properties in the US -
Firstly - DO contact a licensed buyers agent within the US - they ARE there to work for YOU - part of US real estate law is CLIENT ABOVE SELF. How many "buyers agents" selling US property in Australia can seriously say that they would lose their livelihood for ignoring that LAW and how many do you SERIOUSLY believe are putting YOU as a client above themselves.
Buyers Agents will send you a list of every available property in the entire market that meets your needs - which might be, younger than "x" year, minimum 3 bedrooms, 2 bathrooms, double car garage in only one zip code - but you will get EVERY property that comes out that meets that criteria! FOR FREE WITH NO OBLIGATION TO BUY...
A buyers agent is NOT someone who buys a property and resells it. That is a wholesaler or a flipper. Have a very healthy skepticism of someone selling bulk as to their ongoing concern with your property or even how likely it is your property will rent by location. SO DO YOUR RESEARCH.
www.redfin.com - without contacting any real estate agent, this is probably the best of the tools.
www.zillow.com
Sadly once you buy a property you can change the purchase price if you are the owner....so be aware of skewed prices...HOWEVER it is great for seeing how MANY properties have sold in your area in the last 6 months - if a lot, in this market under 80k? Yep, they were sold to investors - how will your enclave look in 5 years time if foreign owners have a tenant majority populated zip in an area that wasn't crash hot to start with?
www.listingbook.com - like Domain on steroids for Atlanta at least... you need a login but you are more than happy to use my random one to get a feel for it - it has random suburbs in there.....
username: selectusaproperty
password: atlanta
Go to area sales of a house you are looking at - find the same subdivision and go from there.
Never buy at the back of a enclave - if any house is at the front of the enclave for rent, they will have to drive past your house to find it... common sense - be the one at the front of the enclave and you will have free advertising!
GOOD SCHOOLS, GOOD SHOPS, TRANSPORT - be walking distance to these....you will always, but always have a tenant.
ALWAYS IGNORE WHAT A PROPERTY SOLD FOR DURING THE PEAK OF THE MARKET
How to find out what your property might rent for
www.trulia.com
Type in the address
www.redfin.com
You can use this as well
www.gosection8.com
Pretend to be a tenant looking for a house in the street of your location
CALL A HOUSE FOR RENT ON THE STREET YOU ARE BUYING - OFFER THEM $100 less and see if they will take it - if yes, maybe you don't want to to buy there!
UNDERESTIMATE INCOME OVER ESTIMATE EXPENSES
IF current rents look like you can get $1000 - do your maths off $900 a month. If you come up with $200 per month in expenses - do your maths of $300.....
Think:
Lawn Care
Gutters cleaning
A/C quarterly inspections
Roof repairs
Taxes
Insurance
Filing fees for taxes
Asset protection - LLC setup and ongoing business licenses etc
General maintenance
Pest maintenance
Vacancy
HOA Fees if applicable
Property management fees
Renewing or reletting fees for leases (most don't charge this but some do)
Utilities if you are paying sewer or trash etc
Then think again because I will have missed some from the above ... then pad it and pad it some more
IF THAT STILL MAKES SENSE THEN GREAT....
WORK BACKWARDS
Total Outlay = purchase price, plus repairs, plus closing, plus facilitation = amount you will not be divorced over.
Obviously buying a property that needs less repairs will allow you to buy a property at a higher purchase price!
Process for purchase
Any real estate agent can step you through the purchase process. Ask a million questions.
You write an offer on the property to buy it.
The offer is accepted, rejected or you are asked to submit a "highest and best" offer - ie there are multiple offers and you get a chance to revisit your offer price... (hate that - you could be the highest already)
You officially exchange contracts - ie the seller accepts your offer and you exchange contracts.
Due Diligence
Once contracts are exchanged you enter due diligence. This means that your agent will liaise with the seller and listing agent to ensure all utilities are on and you conduct your home inspection - it the utilities are NOT on, you will get an extension or have the right to back out of the deal......!!YOUR CONTRACTOR SHOULD BE THERE AS WELL TO GIVE YOU A QUOTE FOR COMPLETE REPAIRS WITH UTILITIES ON!!
If something comes up at due diligence during the home inspection and your home inspector makes "strong recommendation" for further evaluation by a licensed and certified technician, you can have your HVAC tested, your roof tested, your plumbing inspected further.... (plumbing is never that expensive - but a new roof can be a few thousand)
IF YOU SEE ANYTHING DURING THIS TIME FRAME YOU DON'T LIKE OR THE QUOTE FOR REPAIRS IS GOING TO BE OVER THE ??5k YOU BUDGETED.... BACK OUT AND GET YOUR EMD BACK - you will still have had to pay for your home inspections but that is all....
Assuming you proceed to closing... you then have anywhere from 10 days - ?? a month before closing occurs - title is cleared, liens are cleared, your title insurance is put in place and then YAY, closing - and you get sent the wonderful title deed for your hot little hand!
VERY ROUGH OUTLINE OF AVERAGE CLOSING WITH 5k OF REPAIRS....
Please be very aware that many wholesalers and flippers use this area to "rape" you.... if you are receiving a quote at over 10k, be dubious -ask for a breakdown and get a breakdown by line item....if very suspicious - get 2 quotes from any other contractor in town.
Why do I include project management and renting the property in my fees? Because every cent counts to me as an investor and every second counts and this area is where we are most open to being completely ripped off on. If your property manager is trying to rent 30 properties at once - what are they doing to promote YOURS ahead of everyone else's.
5 days before closing = order utilities (they will be switched off after due diligence), line up the tradesmen
2 days before closing = walkthrough verification of all supplies (you're making a list and checking it twice!)
Day before closing = buy all supplies - love the shopping trip
Yay......Closing.....for rent signs up put up around neighborhood, advertising in full swing...
Day 1 - morning = carpet rip out, floor prep, new tacks laid as needed, doors hung that need hanging, anything that needs removing before painting needs removing - faceplates, light fixtures being replaced etc...sheetrock patching occurs whole day as needed. Afternoon = tape off and prep for painting
Day 2 - painting (yard work/roof work outside)
Day 3 - finish painting/garage door installed if replacing
Day 4 - finish fit off/carpet laid/appliances delivered
Day 5 - cleaning - Quality control
Day 6 - pest control
... and on the 7th day.....lol....
Day 8 is quality control and haul back of anything that might even vaguely have issues.
BE VERY VERY VERY AWARE THAT TIME IS MONEY - just like Australia - if your property doesn't photo well at move in, you HAVE to have this work done as quickly as possible.
Move in date is the 1st in the States pretty much across the board so you do try if you can to strategically close properties when possible around best rental dates...however realistically if you close on the 25th - the 1st of a month, you are probably not looking at a move in until the 1st of the next month...you can fluke it... but rarely. Most make their mind up to move by the 18th of each month for a move in on the 1st.
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