TylerCruz.com: An Internet Entrepreneur's JourneyThe journal of a web entrepreneur on his journey to wealth.

Income Property Possession is 1 Week Away!

A lot has happened in terms of progress on my first income property since my last real estate update from 10 days ago.

I few days ago I drove to the property (it’s only a 12-minute drive away) to meet with the inspector and my realtor for the inspection walk-through. The inspector turned out to be the same guy who did the inspection on the duplex for me (which as you may remember was a complete and utter disaster), so the first thing I asked him was “So? How does it compare?”.

Fortunately, his response was something along the lines of “It’s night and day…”.

The Inspection

The report was a fraction of the length of the one for the duplex and it included some extremely minor things as well, such as some side exterior steps needing some paint and a couple of light bulbs missing from an exterior light fixture. We’ll probably hire the best painter found at AlexTrendPainters so we can focus on other tasks that need to get done. Then I also found a fantastic powder coating supplies company in the UK who offer exceptional powder coating supplies, so check them out.

There were 2 slightly larger issues though. First, the roof trusses are missing some knee/dwarf bracing, and the toilets could use some new wax sealing. I haven’t had the work quoted out yet but I’m very roughly estimating around $1,000-$1,500 for parts and labour to get all the issues tended to.

Other than those things, the property is basically flawless.

I do still plan on adding in a separating privacy fence by hiring Fort Worth Fence Company to split the back yard into 2, adding in over-the-range microwaves in both units, and a dishwasher in the lower unit. I decided to use split rail fencing from Rocky Mountain Forest Products since it’s affordable and easy to install.

Oh, and since progress has moved along so much, I thought I’d share a photo of the actual property:

Mortgage Papers Signed

Yesterday I met with my mortgage broker and went through the process of signing all the mortgage paperwork.

There were no surprises there apart from me forgetting to account for the property tax differential. I’m not sure if this is normal for other cities/provinces/countries, but here when you assume ownership of a property you need to compensate the seller for the amount of property taxes that they paid for the current year so far, since property taxes are paid for the year up front.

Since the holding company is taking possession in July, I basically have to pay the seller back half of the year’s property taxes.

It’s not a huge amount, but it’s just something I forgot to account for in my spreadsheet (although it’s now been added, and I plan on improving it later so that it automatically gives me the correct amount ).

Dropped Off 2nd Deposit

Before meeting with my mortgage broker yesterday (if you want to learn more from Metropolitan Mortgage Corporation, you can check their site) I went to the bank and transferred around $170,000 from OpCo to HoldCo and then had a bank draft made out for the 2nd deposit on the property. This larger deposit is to be paid once all subjects are removed…

Subject Removal

The subject removal date is today!

I’m just waiting to hear back from my realtor on this, but I do expect to sign the paperwork to confirm that subjects are all removed sometime later today.

Completion & Possession

Both the completion and possession date is July 10th, just a week away!

I still need to meet with my lawyer to do the main paperwork though – I’m not sure when that will be but it will likely be scheduled either today or Monday at the latest I’d imagine.

Once that is done, I’ll basically have the keys handed to me in a week on the 10th! The only downside is that since this is an income property with existing tenants, I won’t actually get to go to the property and “play” or take photos/video to show you guys But I assure that I shall be tweaking the place a lot. I have plans of getting muralswallpaper for the walls because I totally love patterns.

Property Management

Owners of rental properties like luxury apartments usually hire a property manager for the upkeep and management of their properties and tenants. I finally shortlisted my list of property management companies down to 1, so I have that done.

I still need to sign the paperwork to get all that set up, as well as have the property manager come see the property in person and meet with the tenants and all that jazz.

Speaking of which, during the inspection I very briefly ran into one of the upstairs tenants and the downstairs tenant, both of who seemed very friendly. Then again, maybe they new I was the pending new owner and they wanted to keep on my good side, heh

Conclusion

So things are moving along!

There are still more things to do as already mentioned, but unless something disastrous happens in the next 7 days, I should have a property and 3 tenants!

My next income property update will likely be once I have the keys in my hand… so stay tuned!