Quick Tips for a Quick Closing

• Take lots of photos

Take a digital camera with you whenever you visit a property you are considering buying.  Take pictures of EVERYTHING!  All exterior sides of the building, all kitchens, baths, and all mechanicals including heating, water and electrical panels.  Pictures of each room and don't forget the exterior shots of the houses immediately around this house.  And if there is a view, don't forget that either.

 

There are lots of reasons to take these photos:

1.  They will help with your rehab estimate when you are home and can't remember one property from another, because they all blend together.

2.  If you sell the property, you'll have documentation of the "before" when the buyer's lender questions why the value went up $100,000 in only 3 months

3.  If you have an insurance claim during the course of ownership, these may be helpful.

4.  And most importantly, if you are looking for hard money to purchase and/or rehab the property, these photos are a critical part of your loan package!

5.  You won't have to go back to the property later to take the photos that you should have taken in the first place. 

• Provide a complete loan package

When we are missing critical information, it slows the process.  If you don't have all of it, contact us to discuss it, so we can jointly determine the best way to get it.

• Have a stake in the outcome

It's called 'skin in the game'.  You must have either cash in the deal, or provide additional collateral (another property you own) to demonstrate that you have something to lose besides the profit in this deal.

• Consider cross collateralization

If you need to borrow more than is normally warranted by the LTV, or don't have enough cash to meet the needs of the lender, consider cross collateralizing another investment property.  It shows you are in it to win it, won't walk from the deal if it gets in trouble, and gives the lender a comfort level to provide extra funding.

• Be conservative in estimating values

In a declining market, your profits can evaporate quickly.  Be conservative in estimating both the current 'as-is' value of the property, and the After Repaired Value or Completion Value.  You will be insuring the profitable outcome of the deal, and building credibility with the lender.

•  Have multiple exit strategies

If the market changes, and you can't sell your property as planned, have a back-up plan, or even two.  This will insure you can make money regardless of the market, and show the lender you know what you are doing.

• Consider all expenses when evaluating a deal

A well-structured deal takes acquisition, carrying, financing and selling costs into consideration, since they add up quickly and can dramatically impact your profit.

• Expect the unexpected

You actually CAN plan for the unexpected.  Assign a dollar amount as a miscellaneous or contingency expense.  We like to call it the Ooops factor.

• New product might make a landlord's life a little easier

   

  Hey, I have no stake in this, but I saw a new product the other day that I thought looked awesome.  It is similar to laminate flooring, like Pergo, but has a lot more pluses.

   

  It's called Allure, and it is a solid vinyl, somewhat flexible flooring in planks that are oblivious to moisture, wear like iron, look much better than most laminate, and are cost effective for the longer term.  The planks adhere to each other with a double faced adhesive strip that can be lifted and replaced at will.  The floor can get soaked without any effect other than having to clean it or get the moisure up from under it. 

   

  So you can install it in a rental without worrying about moisture causing the seams to swell and buckle.  No underlayment is needed.

   

  I haven't tried it yet, but the flooring guy at Home Depot loves it.  It is in stock at $1.79 per SF, and you score it with a utility knife and snap it when you are installing it.

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