You got the call. Your offer has been accepted on a nice 3-unit multifamily. What now?
I've put together a list for myself that I'm sharing with you. I try and make things as easy as possible for myself. I print it out and stick it on my computer so nothing falls through the cracks during the first 60 days. By then you should have your first rent check deposited (or be close to it).
The first 60 days are a process. I guarantee you something will not go perfectly according to plan. It certainly never has done for me. But this list will get you 95% of the way there.
And if you're not at the point where you've had an offer accepted, scroll all the way down. I'll show you where to start.
⬆️ Print and tear here ⬆️
Investment property purchase checklist
[ ] Day 0: Get pre-approval letter from lender and confirm how long the negotiated mortgage rate is locked for
[ ] Day 0: Transfer monies to dedicated account to cover up to signed offer to purchase
[ ] Day 0: Send terms and pre-approval letter to buying agent/property manager to draft the offer to purchase, at a minimum:
- Offer price
- Conditions (financing, home inspection, closing date etc.)
- Payment structure (with offer to purchase, on signed offer to purchase, at purchase & sale signing, at closing)
- Your full name(s)
- Closing date
[ ] Day 0-1: Sign offer to purchase and give check to seller's attorney/agent once complete
[ ] Day 1: Start ONE email thread with lender, attorney, and property manager to confirm property details as above and the contact details of all parties involved; ask for all non-sensitive communications to be in that thread
[ ] Day 1 (optional): Schedule a home inspection to be completed prior to the purchase and sale being signed
[ ] Day 1-4: Gather the documents the lender will need in one digital folder; submit all in one upload if possible; lock in rate as appropriate
[ ] Day 3-5: Walk round with the home inspector & take notes (H/M/L importance for each)
[ ] Day 5-7: Provide feedback to attorney on 'must haves' and 'nice to haves' in purchase & sale agreement; negotiate with other party through attorney
[ ] Day 7-9: Sign purchase and sale agreement and give check to seller's attorney/agent once complete
[ ] Day 7-9: Pay for and schedule appraisal through lender
[ ] Day 7-9: Set up online document file storage system dedicated to property
[ ] Day 10-17: Get detailed insurance quotes based on property coverage needs and buy in advance
[ ] Day 10-17 (optional): Set up LLC, specifically operating agreement, get EIN, and register LLC with state
[ ] At least 10 days before closing: Fund final deposit and reserve in bank account
[ ] At least 10 days before closing: Connect dedicated property bank account to accounting software and online bookkeeper
[ ] At least 10 days before closing: Send insurance binder and LLC operating agreement (if appropriate) to attorney and bank
[ ] At least 10 days before closing: Submit any outstanding documentation to lender
[ ] At least 5 days before closing: Ensure all purchase and sale agreement contingencies are clear with your lawyer
[ ] At closing: Take proof of identity and sign all closing documents with your lawyer; confirm whether you or your attorney is registering the property at the local land registry
[ ] After closing: Set up automatic mortgage deductions from dedicated bank account
[ ] After closing: Get dedicated credit card for property (if needed) and set up on automated payments from the dedicated bank account
[ ] After closing: Transfer relevant utility billing, property taxes etc. and set up on automated payments from the dedicated bank account
[ ] After closing: Send final settlement statement to bookkeeper and tax accountant (along with LLC operating agreement, EIN, LLC name & ownership structure if relevant)
[ ] After closing: Ensure property management company has set up new property in their software for viewing and they have the right tenant deposit amounts recorded
[ ] After closing: Ensure the bank account has enough float/reserve (money) to avoid overdraft fees
⬇️ Print and tear here ⬇️
Before you've even found your investment property you can get prepared. Make sure your 'deal team' is in place. Negotiate terms with a bank. Open a dedicated bank account and fund it with a few dollars. Not sure how? Start here:
And here's how to find an investment property right for you:
Your new investment will be kicking off returns like the Laziest Landlord in no time.