(If you haven’t read Part I yet, please scroll down and read it first.)
During this time that you have the property under contract and you haven’t actually closed on it yet, have it inspected by a licensed inspector. And then you can also have your own contractor look at it in case he didn’t look at it when you first inspected the property. This is also a good time to send out your foundation company. They will often give free estimates. And they can catch things even your licensed inspector cannot catch because they specialize in finding problems with the foundation.
So if everything looks good with the inspection and the house repairs are still in line with what you initially expected and you can make a good profit on the deal, tell the seller to move out … if it’s a motivated seller. If it’s a wholesale deal, tell the wholesaler to tell the seller to move out.
Then get your financing in place because you’ve already committed to buying. Get your private loan or your hard money loan. You’ll need to fax to the hard money lender the application they require, which they normally process in a day or two and often has nothing to do with whether or not your credit is good. And also fax your hard money lender your sales agreement so the hard money lender can analyze the deal. Then the hard money lender will go look at this property and they’ll make sure it’s a good deal. And if it is, they’ll grant you the loan and make sure your money is there at closing waiting for you on the day that you plan to purchase the property.
If they find out that you’re over paying for the property, they won’t say, “Oh we can’t lend.” Nine times out of ten, they’ll still lend on the property. But it will be less money than you expected, which will require you to come out of pocket a little.
Now another thing the hard money lender will do is get their documentation to the title company. So you don’t have to worry about that. And then the title company is going to organize all these documents, all the legal documents that people often get so scared about. The title company actually takes care of most of that or all of that depending on how you look at it. Go ahead and close on the property and the hard money lender will wire the money to the transaction the day of or the day after closing.
But like I mentioned earlier, if you’re buying at a low enough percentage, then most of the time you will not need to bring money to closing. And if you do, it may be $1,000 to $3,000. And if you don’t even have that much money, you should be looking at wholesaling in the first place and not rehabbing, which is a separate topic. You can find deals to wholesale in the Motivated Sellers section of myHouseDeals.com, assuming you’re a member.
After you close on the property. The seller should give you the keys to the property either the day of closing or the day after or often times the seller will tell you, “I left the keys under the doormat,” which is fine.
Well, that covers the basic steps for buying a property to rehab! Now you’re ready to buy your first or next property from myHouseDeals.com. Get a 30-day free trial to access the properties by goinig to www.myhousedeals.com/freetrial now.
Happy (and profitable) investing!