I'm officially in unknown territory. I've got a property under contract for $87,000 that was found by my agent. Yes, I've seen photos and videos of the place, but I honestly have no idea if it requires renovation or repairs. No worries! This is why the 15 day inspection period exists!
Thankfully, I have a rockstar agent to guide me.
My immediate action items:
1. Earnest Money - overnight a check for $1,000 to the selling agent ASAP. There's a three day deadline.
2. Inspection - I have 15 days to complete the inspection and an additional 10 days after that if needed.
3. Insurance - I must provide proof of insurance ASAP.
4. I must sign the Seller's Lead Based Paint disclosures.
Couple other things:
1. My agent sent necessary paperwork to my lender to begin the application and financing side of things.
2. The tenant has now decided to leave. So, I will have a vacant property by the time I close. Which means, I'll need to have my property management begin marketing the property as soon as possible. One one hand, it sucks I won't have income coming in immediately, but on the other hand I can now screen and place my own tenant.
Taking care of the Earnest Money, getting an insurance policy, and signing the Lead Based Paint disclosures were a piece of cake. Now, onto the INSPECTION.
I initially tried to setup an inspection with the national company HouseMaster, but their earliest appointment time didn't work for me. So, I turned to one of my connections I met online and got a referral! Thanks to my first real estate mentor ever, Morgan!
My inspection cost $310 based on square footage and all I had to provide was the property address and the listing agent's contact info. So what did the inspection uncover?
-I should add a switch for the whole house fan. Right now, it's operated at the breaker box.
-There is unsecured wiring in the furnace room
-The kitchen and bathroom outlets are not GFCI protected
-One window in the garage is broken
-Plumbing was redone recently, but there are two mysteriously cut pipes in the crawl space.
-There's sign of a little mold in the crawl space.
-The bathroom exhaust fan should vent to the exterior of home. It currently runs to the attic.
-The boiler heater is at end of its life cycle
All in all, nothing too alarming! Knowing the boiler is toward the end of its life cycle isn't the greatest news, because that would be a major expense. I might need to hire a plumber to investigate the pipes in the crawlspace. And I should have an expert evaluate the mold in the crawl space. But, everything is pretty manageable.
Because this is an "As-Is" transaction (the seller is unwilling to perform any repairs), I asked for a $1,000 reduction in asking price. I didn't want to rock the boat too much and lose the deal, since the inspection came back pretty clean. But, I did want a little cushion in case I have to repair the boiler in the near future.
The seller immediately accepted my inspection response, which I kinda expected. They wouldn't kill the deal over $1,000 would they??
So, with the inspection complete, I really know the condition of the property. I'm all in...and I got it for under my maximum budget!
Let's review this investment:
Square footage: 1,400
Two Car Garage
Bonus sun room and full laundry room (could be converted to a 3rd bedroom)
Full steam ahead! I'm Jumping In! Let's close!
-As an out of state investor, I 100% recommend you get an inspection on your property. That is a MUST for me to really understand the condition of the property. Trust the professionals!