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F.A.Q.

Tips on Being a Landlord

Tips to Negotiate Before Making an Offer as a Homebuyer

What is an Option Period for a Home Buyer?

How to Narrow Your List of Homes

How to Lease a Home in Texas

How to Buy Your First Home

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Tips on Being a Landlord

Know Your Numbers

  • Calculate monthly expenses (mortgage payment, insurance, property taxes, HOA fee (if applicable), management fee (if applicable).
  • Your rental price should cover your monthly expenses.
  • It should also give you a little extra to pay with or to have for any future repairs.

Get Property Under an LLC

  • You need that extra layer of protection. If anything were to happen to your tenant, or anybody in the property, they can come after your personal assets.
  • Open a new bank account to separate your business income from your personal income.

Get with a Realtor

  • Realtor will guide you through the process, provide you with comps, weight out the numbers, and make sure you are getting top dollar your investment property.
  • www.surgerealty.com #surgerealty

Make Sure Your Property Looks Amazing

  • Make sure it’s clean, that repairs have been made, and if it fits in the budget, provide a fridge and washer/dryer
  • It will make you stand out then other rental properties.

Vet Out Your Tenant

  • Check Their Income. They should make 3x the rent.
  • Check Their Credit Score. Their credit history will help you decide how likely it is that they will pay on time.
  • Check Their Records. Criminal records, eviction records, verify their employment & address.

Draft a Lease Agreement

  • This is your chance to add the language and the terms which will control the rental agreement.

Hire a Property Management Company

  • The management company handles the day-to-day work to manage the property.
  • They answer calls, take care of any repair requests, and make sure that money is coming in on a monthly bases.

Know Your Numbers

  • Be strategic about it.
  • Depending on the market and how competitive it is, you want to offer a price that makes sense for you and the seller.
  • New Listing: Come in strong Older Listing: There will be room to negotiate the price down

Survey

  • You can negotiate the survey between the seller and buyer.
  • You may be lucky if the seller already has one that can get approved. It can save you about $400-$600, depending on the lot size.

Home Warranty

  • If you are a buyer, I suggest squeezing this into your deal. It just gives you as a buyer peace of mind the first year.
  • This will cover most mechanical items and minor repairs request for the home for a small fee.

Seller’s contribution towards buyer’s closing cost

  • Look at these important numbers when buying a house: Monthly Mortgage Payment, How much money I need to bring to closing
  • If you need to raise the sales price, feel free to do so, roll it into the loan, and get some contributions from the seller towards your closing costs.

Non-Realty Items

  • If you fall in love with the stainless steel appliances but not sure if you can also get this with the purchase, please ask your realtor.
  • It may cost you a price, or at times the seller will throw it in the deal.

Tips to Negotiate Before Making an Offer as a Homebuyer

What is an Option Period for a Home Buyer?

What does an option period mean?

  • Time to do due diligence as a buyer.
  • Hire an inspector to inspect the house.
  • Inspection results will determine if you are comfortable moving forward or if you need to go back and negotiate.
  • Time is of the essence!

What is my time frame?

  • Look in your contract and see what was agreed on.
  • Usual time frames include 5-14 days.
  • Buyer pays seller the option fee, $10-$20 a day.
  • Two things to keep in mind: #1 Day 1 starts after the effective date, not the day you sign. #2 The Option Period ends at 5 PM.

Do I move forward or back out from the deal?

  • If you decide to move forward, the Option Period will be deducted from the sales price at closing.
  • If you decide to back out from the contract, the earnest money is the only cash you can recoup. *it all depends what both parties agreed on.

Look at the square footage of the house & the lot

  • 1,500 square feet is a fair size for a 3 bedroom and 2 bathroom home
  • 5,000 square feet or bigger for the lot size – depending on the style of home

Look at the dimensions of each bedroom

  • You’ll be able to tell if the home will be spacious or too tight

Look at the school districts

  • If you have kids, or planning on having kids, this could really help narrowing down your list

Look at the property taxes & HOA fees

  • Looking at how much you would need to pay in taxes and any HOA fees will also help in narrowing down your list some more
  • HOA fees can range from $100 to $12,000 a year

Drive around the neighborhood

  • Drive around the property area during the daytime AND nighttime just to get a feel of the neighborhood
  • Visit local grocery stores and restaurants to do your due diligence
  • If you cannot drive around the neighborhood, get on Google Maps to see what is around the property

Stay within your price range

  • Scratch out the homes on your list that are higher than your preapproval amount
  • It saves time when you stay in your budget

How to Narrow Your List of Homes

How to Lease a Home in Texas

Have money saved

  • These items will need to be paid in the first 30 days: Lease Application Fee, Deposit, Rental Insurance, 1st Month Rent, Pet Fee (if you have pets)

Show proof of income

  • Gather last two months of pay stubs
  • Entrepreneurs – need to show bank statements/IRS tax return
  • Make sure you make 3x the rent price Rent = $3k a month / Make $9k a month

Have a valid I.D.

  • Make sure you have a valid form of identification such as: Driver’s License, Passport, or Military I.D.
  • Make sure they are NOT expired

Get a realtor

  • A realtor helps speed up the process and answer any questions you may have
  • Realtors can help you draft a letter to the landlord/property management to give you a better chance to get approved

Start your home search

  • This is the fun part!
  • Let your realtor know your price range and what you are looking for in your new home

Fully complete lease application

  • Missing information can make you lose the opportunity of your dream home
  • Fill out the application completely

Pay the application fee & deposit

  • Make sure you have deposit ready
  • Landlord will continue to show property until you pay the deposit
  • Deposit locks you in!

Have money saved - Money is power

  • 3.5% down for FHA | 5% down Conventional | 0% for VA
  • $200,000 | FHA-$7k at closing (no including closing costs) | Conventional -$10k
  • The more money you put down the lower your monthly payment is going to be

Talk to a lender

  • See what you can afford to buy
  • Lender will look at your employment and credit score
  • Get your pre-approval letter

Get a realtor (The Surge Realty)

  • Realtor will guide you through the process of buying a home

Make an offer

  • Take that leap of faith, take action, make a good offer
  • Ask your realtor to add a Seller’s Concession to the buyer’s closing cost. It could lower your down payment

Option Period

  • Do your due diligence
  • House inspection
  • Renegotiate with seller
  • Go back to lender and give them the numbers (property cost, HOA, insurance, taxes) so they can give you a rough estimate of your monthly payments before you move forward

Loan Process

  • Let the lender and title company do their job
  • Watch your spending - no big purchases or opening credit cards
  • Appraisal - plays a huge part. If it doesn’t appraise at value then renegotiate happens again

Clear to close

  • Go to title company, sign documents and property is yours
  • “FUNDED” is the magic word

How to Buy Your First Home