How to Ensure a Successful Closing
As your closing date draws near, you’re probably getting excited about finally owning your own turnkey rental property. You should be! Everyone remembers buying their first real estate investment property. It’s the first stepping stone to building up generational wealth. Expert after expert and study after study show that real estate investing is a tried and true method to growing a fortune. Just try to stay cool and collected for your closing, because a lot can go wrong on the day. Many disappointed buyers wish they’d had the following checklist to ensure a successful closing. Here are the tips to keep in mind. With an out-of-state property purchase, the closing process involves meeting with a notary at a convenient location near your primary residence. You can count on it taking about an hour.
Have Your Cash Ready
One of the most common reasons for a failed closing is inability to pay unexpected closing costs. While everyone in your corner has been doing everything possible to cover all the details, sometimes things either fall through the cracks or come up unexpectedly. For example, there could have been a small typo in the calculations, or the title company forgot to include some small fee; whatever it is, having cash ready will take care of it. So either bring your checkbook or your wire transfer details ready and have some cash in reserve in your account to cover the unexpected on the day of your closing.
Bring Multiple Forms of ID
Surprisingly, this tiny detail has been known to trip up even savvy investors. Most commonly, this happens to people who occasionally switch wallets or purses. They make the switch a few days prior, but accidentally grab the bag or wallet that doesn’t have their ID. You don’t want to get caught at your closing without proper ID. You’ll most definitely be asked to present at least one form of photo ID, and possibly two. If you can’t present it, the closing may have to be rescheduled. Make this one of the last things you double-check before leaving your house for the closing—along with confirming that you turned off the oven! The best thing to do is to take photos of your driver’s license and passport or other photo ID and store them in your phone and on your home computer in case they’re needed when you don’t have your wallet.
Bring Copies of Your Financials
Typically, you have already submitted your financial documentation prior to loan approval. That means you can count on all your required documents to already be in possession of the loan company representative at the closing, right? Wrong! Just remember, humans make mistakes. With all the paperwork and details required to transact a real estate purchase or sale, it’s easily possible for some documents to go missing. Just to cover yourself—and the loan rep—upload a copy of your financials to Google Drive or your choice of cloud storage platforms. You’ll be the hero if one of your documents turns up missing at the closing. You can even go the extra mile and bring things you might not have been asked for, such as copies of a year’s worth of cancelled checks and bank statements.
Miscellaneous Things to Have on Hand or Saved in the Cloud
Make sure you have these miscellaneous things on hand because they may be needed:
– Proof of property insurance coverage
– Your bank wire transfer details
– Telephone numbers and addresses of all the players
– Phone wall charger (in case you need to recharge in the closing room)
– Pen, hand sanitizer and water (since you’ll be there about an hour)
Bring Proof of Legal Entity
You don’t need to form a legal entity (e.g., an LLC) in order to invest in turnkey rentals. But if you have chosen to do so, be sure and bring all that legal paperwork to the closing. This will include your articles of incorporation, FEIN assignment letter from the IRS, copy of your by-laws and anything else related to the newly formed entity. If the officers of your legal entity include anyone besides yourself, make sure you bring them along with you. Their signature may be required on the closing paperwork if your entity is the one buying the investment property.
We actually recommend printing out this list and keeping it in your folder of things you’ll need for closing day. That way, when the happy day arrives, you can pull out this checklist and make sure that you’ve done everything you can to ensure a successful closing. Chances are, your closing will go just fine. But the simple act of reviewing this checklist ahead of time will also help you to feel confident as you make one of the best moves in your life – closing on your very first turnkey rental property!