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The Closing Process for Income Property

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If you’ve purchased an income property in the past, you already know that the closing process can be a real hassle.  The reason is that there are various tasks needed to officially close the deal.  For example, you’ll have to contact a title company or attorney to administer the closing and investigate the property’s title, secure homeowner’s insurance, manage your lender’s requirements, and conduct a final walkthrough.  Here is a contract closing checklist that you can use to help simplify the process.

About 30 days after the execution of the contract, you will have hopefully jumped through all the necessary hoops and are ready to take ownership of the rental property.  On the day of closing – preferably before you’re at the table – you’ll need to review the HUD-1 settlement statement.  The HUD-1 is the detailed transaction log depicting who owes what.  Carefully review the numbers to make sure they are correct.  If not, have the title company make the necessary revisions.

Once you’re sitting at the table, prepare to get writer’s cramp from signing all the necessary documents.  This process may take a couple of hours, depending on how well prepared everyone is. 

Finally, make sure you get all the pertinent items from the seller – the leases, tenant contact info, security deposit info, keys, appliance manuals, and anything else the seller has regarding the property.  Trust me, obtaining items from the seller is much easier before the deal is officially closed. 

So that’s the process in a nutshell.  Once you’ve done it a few times, it gets easier.  If you’ve never done it before, I recommend you click for more detail on the real estate closing process.

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