I am currently working through the process for closing on my first property. I want to give a shout out to JScott at 123flip.com. He has an excellent education page on his blog. I am using the property acquisition checklist from that page. Its given me peace of mind that I am getting the proper steps done to close this property.

I had the inspection yesterday. It’s the same guy who inspected my personal home. He remembered me and did a very complete job. He also gave me a discount and some very good suggestions I will be sharing. From the inspection I built a primitive scope of work. Nearly the entire list (except electrical) can be done by an experienced handyman. The big guess is if the hard money lender will allow me to do that. When I get some numbers together I’ll share the scope. Still, I think my rehab high end of 10k is not bad.

The property inspector suggested going to the habitat for humanity store. They have deeply discounted supplies as low as 10 cents on the dollar. All the proceeds go towards the organization which is another plus. The inspector mentioned throwing in 2-3 wow factors for the next inspector. Little items like cleaning the furnace spotlessly. Cleaning up the electrical box, added vents for the attic, and any other odd place that normally gets over looked. Many of the items can be done very cheaply and give the inspector a very good impression. That matters because this home will likely be sold to an FHA buyer. The inspection matters and the more frugal wow factors I can pull off now, the less ow factors I will likely have to deal with later.

I have yet to call the hard money lender. That’s my call tomorrow. I am looking through there website again to make sure I will have the desired info quickly and easily. It will be tight on my finances for a few months until the property sells. I will be using nearly all my liquid assets to make it happen. On the next post I will run through the scope of work and my projected costs. Its a bit of a stab in the dark, but as I learn I can adjust.

On the property manager note, I had a bit of a setback. I had a really good PM firm lined up and ready to sign their contract today. I got a call from them this afternoon. One of their tenured PM’s is leaving the company after 12 years and leaving the industry. They told that while they could handle my two properties, it would not be fair for me until they replaced her. They have 3 other folks in the office, but my properties need a bit more attention at the moment. I appreciate their honesty and will likely use them in the future if I can. I have already lined up another firm. They will be meeting me on Monday at the properties. I plan on having two different PM firms when my personal property becomes a rental. I do not want be left stranded again without a backup company ready to go. Perhaps anal, but if it becomes a burden i can always change back to one company.

I haven’t been able to get a hold of the old PM firm yet, but strangely they were able to send me a bill for August PM fees. Kinda sad companies turn this bad. They will have to use the greater fool theory from now on. Oh well.

I haven’t heard anything on the potential personal property. I hope to hear within the next week, but with two lenders, its anyone’s guess how long it will take.

That’s all for now. I leave you with this quote. “The line between failure and success is so fine that we scarcely know when we pass it: so fine that we are often on the line and do not know it.” Elbert Hubbard