Exactly What Happens When You Buy a MartelTurnkey Property
One of the most common questions that people ask is exactly what happens when you buy a MartelTurnkey property. Because we are committed to full transparency, we thought it would be a nice idea to take you through the entire process of buying a MartelTurnkey property, step by step. From the beginning stage of choosing a turnkey rental property from our website, all the way to closing day, here’s what you can expect.
Choose a Turnkey Rental
The first step is to browse the available turnkey rentals for sale on our website. You’ll find a selection of turnkey single-family homes and duplexes in our current markets of St. Louis, MO, Cleveland, OH, Memphis, TN and Detroit, MI. Future markets might become available as various economic indicators dictate. The way to choose a turnkey rental is to download the financials. The link to do this is on the individual property page. You’re asked to enter your contact information, which just puts you on our mailing list. You’ll then receive an immediate email with the financials for that property. One or two business days later, you’ll receive a call or email from our team asking if you’re interested in moving forward with that property. This gives you the opportunity to get any of your questions answered or ask for more information. Once you’ve reviewed the financials and determined that a certain turnkey rental property aligns with your investment goals, it’s time to move on to the next step!
Once you decide that you want to move forward, the sales team will email you the contract for the property. This is essentially a Purchase & Sales Agreement. (Note that you do not need to have real estate agent representation to do the transaction.) After you’ve reviewed the contract, you sign it using an online e-signature service called Zoho Sign, and return it to us via email. Your signature does not have to be notarized. You can just take care of it in the comfort of your home via email. You’ll then receive a fully executed copy of the Purchase & Sales Agreement. At this time you’re entered into our system as the buyer for the turnkey rental property.
Submitting Your Earnest Money
Within five business days after you sign and return the Purchase & Sales Agreement, you’ll need to submit your earnest money to seal the deal. We only ask for $1,000 in earnest money on our properties, which is on the low end of the standard earnest money requirement. Of course, if you complete the sales purchase, that earnest money is put toward your purchase price on the turnkey rental. The earnest money is sent to the Title Company to be held in escrow. Instructions for how to wire the money will be emailed to you at the same time as you sign the Purchase & Sales Agreement.
Personal Introduction to Your Team
Within a day or two, you’ll receive another email from us, introducing you to your team. This includes your title company, property manager, the property insurance company and the lender. Note that these are the companies that we work with; the companies that we have established relationships with. You are under no obligation to work with these companies. You can always choose your own property management company, insurance company and lender. However, by working with our recommended companies, the entire process is greatly streamlined, since they know how we work and they understand the turnkey rental property business.
Getting Approved For the Loan
When you buy a MartelTurnkey property, there’s really no pre-approval process like when you would buy a primary residence. The way it works is like this: After you have signed the Purchase & Sale Agreement, we approach our lender and say, “Hey, can we get them approved for this loan?” At that point, the lender will contact you and ask you for all the information they need to process your loan application. They’ll ask for things like:
- W-2 income or 1099 income
- 2 Months’ Bank statements
- 2 Years’ Tax returns
- Credit Score
- Credit Check
This will be the time when you’re working in close contact with the lender; answering questions, supplying more documentation, etc.
What if You’re Not Approved?
In rare cases if the buyer can’t get approved, then we cancel the Purchase & Sale Agreement and return your earnest money, no strings attached, no harm, no foul. If you get the opportunity to improve your credit and think you can get approved in the future, we would welcome the chance to work with you again and hope you’ll return to us. But let’s go on with our scenario with the assumption that the lender has given you the green light and you’re approved!
What if the Property is Still Being Renovated?
We try to make our turnkey rentals available for sale as soon as possible. Sometimes this means that renovations are still underway. If you choose to buy a property that’s still being renovated, you’ll want to lock that purchase up and not wait for it to be completely renovated, so no one else buys it before you can. You can always view the list of renovations on the property details page on our website. So even if those renovations aren’t finished, you’ll know exactly what will be complete before you take ownership.
We can go ahead with the purchase process, including setting a closing date. Closing dates are typically 30-60 days out. That gives us a chance to finish the renovations and get a tenant in place for you. All of our turnkey rentals transfer with a tenant. You’ll also receive a set of professional photos that reflect the condition of the turnkey rental after the renovations have been finished. That way, you’ll see the finished product before the closing date.
What if We Can’t Get a Tenant Before the Closing Date?
In this case, there are two options to proceed. We can ask you if you want to go ahead and close with no tenant in place and then give you a check to cover the first month’s mortgage and interest. Or, you can ask us to push the closing date until a tenant is in place. In almost all cases, it only takes one month to get a tenant signed, so that would push the closing date out 30 days.
The Appraisal Process
Once you’re approved, the lender will order an appraisal. The appraisal is a third-party assessment of the value of the property. It’s required to ensure that the property is worth the price. You pay for the appraisal, which is about $500. The appraisal takes the most amount of time, but it’s the last check, so you’re getting closer to being a landlord! Once the appraisal comes back, then the deal moves to closing.
Covering the Property With Insurance
Once you’re approved, you’ll need to contact the insurance company to acquire property insurance. This needs to happen before the actual sale takes place, since the lender needs to know that the insurance on the property won’t have any gaps. Property insurance in our markets generally runs about $500 to $800 per year.
Behind the Scenes
After the appraisal comes back and it’s in line with the purchase price, the bank works with the title company. A closing date is set up, and the title company will then email you to see if you’re available at that date and time.
The Title Company and You
You’ll need to have your signature notarized on all of your closing documents, so you’ll need to set up the meeting with the notary ahead of time. The title company can either email you the closing documents, which you can print out and have notarized and then overnight the documents to the title company. Or, you can ask the title company to email the documents to a local notary, arrange to have the notary come to your home and notarize your signature on all the documents, and then the notary can overnight the documents to the title company. Basically, you can do this part the DIY way or the concierge way.
The Last Step
The last step is that you need to send in your wire for closing. This will be part of your closing documents. The wire goes to the title company and it represents your down payment portion. Meanwhile, the bank is doing the same thing. They’re sending in their wire transfer to the title company for the loan amount. After the title company does all the math and the accounting, they then record all the documents and forward the money to the seller, MartelTurnkey. Once everything is finalized and “closed and funded,” all the parties get a congratulatory email from us saying that the transaction has been fully closed. You’ll be named as the buyer and the new owner of the property!
What About the Keys?
When you buy a turnkey rental property, the keys are held by the property management company so they can do their work. As the new owner and recipient of passive income, you don’t need to do so much as keep track of the keys. All that is done on your behalf by the property management company!
Now that you know exactly what happens when you buy a MartelTurnkey property, you’re probably excited to get started. The first step is perusing our selection of properties and choosing one that appeals to your needs. Remember, we’re with you every step of the way on this journey to generational wealth. If you have any questions, please don’t hesitate to contact us!