We have officially closed! Or at least, that’s what I was told…in a very anticlimactic way… We haven’t received the deed or any rents yet so maybe those two things will make it seem more real. This is the first time we bought a house that wasn’t for us to live in and it feels very different.

I’ve spoken a lot about the turn key models and why we chose to use a company for our first rental. The analogy I keep using is if you have to take a test, would you rather it be open ended or fill in the blank. Personally, I choose the second. But since this isn’t a test and you don’t have to do anything, maybe not the right analogy.

Now that we’re basically at the end of the process of buying our first house, I thought I’d take a few minutes to talk about the blanks we had to fill in. In other words, my to do list that existed even in the turn key world. 

First off, we still had to find a lender and get pre-approved. As I mentioned in an earlier blog, we left this a little late but it is something we will have to do on any future purchases and should do first. I spoke to two different banks: North American Financial (NAF) who is recommended by Rent to Retirement and my brother in law, who is a mortgage broker. He said the proposal from NAF would be hard to beat and given the short timeline we had, we went with them.

If you have never been through a pre-approval, it’s much more complicated than it sounds. You have to send over your pay stubs and tax returns, all your assets, bank accounts, and your firstborn son. The good news is, if you do it right, you won’t have to do this again before closing. 

Everything else about the offer/initial purchase was pretty smooth because we went through a service. As soon as we were in escrow, we had two main responsibilities. 1. Get the appraisal ordered. The longest part of the process is the loan underwriting and a key part of this is the appraisal. When we bought properties for ourselves, the bank did this. Maybe it is NAF who does it differently or maybe it is just part of the investment property purchase process (say that 5 times fast) but we had to do it, which was a new experience for me. The company made it really easy though and basically we just had to send over payment.

2. The other immediate responsibility was getting the inspection done. Our seller, Steve, had recommended one but, me being slightly skeptical, I had to do my own research. I ultimately ended up going with the one he recommended, but only after I saw independent reviews. The only major thing that came up with the inspection were some issues with the roof and Steve immediately offered to fix it, so we were able to move forward. If the inspection had turned up something major, that would have been when we walked away from this particular deal.

Another thing we were responsible for during the process was finding insurance. I sent out for quotes from 5 different companies (6 if you count the conversation with my uncle, who ultimately couldn’t help me). Some of these companies wanted to know very specific things like the age and make of the roof, or my blood type (mostly kidding). Steve was extremely accommodating and helped answer a lot of these questions since I know very little about construction.

Again, Seller Steve for the win because he recommended the company we ultimately went with. We made the decision to go with a fairly high deductible ($2500) and only enough so we wouldn’t be out of pocket if the house somehow burns down or is otherwise destroyed. This will help keep our monthly payment down and hopefully increase our cash flow.

We also had to find a property manager. Rent to Retirement recommended a property manager and that is who we have gone with. I spoke with the company and feel comfortable doing so. Full disclosure, I did not look around at all, I was feeling overwhelmed and they came recommended. If I end up unhappy, I will look for other companies.

Throughout the process, I was in contact with the lender making sure they had everything they needed. Occasionally, we had to sign documents that they requested or send over new statements. 

Now that we’ve closed, there are still a few more things to do. We need to transfer the property into a real estate privacy trust (for future properties I will be better about this transfer and close in the name of the trust). We need to finish setting up our account with the property management company. We are in the process of opening a bank account for our LLC (an optional item that we decided to do) and will send them a voided check. I will also check the online portal they use to share information with us.

The property management sent me a list of things to be done that are specific to rental properties in the Canton, OH area. We have to register with the city and county. We have to transfer the utilities to our name (even though the tenant will ultimately pay them). We also have to send over tax documents.

Even just writing what we still have to do just caused my heart to race. All these little things I didn’t realize would have to be done that at least I now know to look for. We don’t plan on using a turn key provider for every property purchase but will probably buy at least one more while we continue to get our sea legs under us.