When you buy a piece of income real estate, you must go through what is called the contract and closing steps. These two steps called the passing in some states. Both these steps are easy for three reasons:
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- Your work is little more than showing up and having your papers ready.
- Your attorney and accountant will know exactly what to do and will give you this information.
- The average contract signing will take only about one hour of your time. The average closing will take about 1.5 hours. So you will invest about 2.5 hours, during which your attorney will be present to tell you which papers to sign and to explain the various details of the contract signing or closing.
Since the contract and closing stages are so routine in the purchase of income real estate, I am skipping the details here. Also:
- Your attorney will be at your side to explain every step in the process, should you ask. Your attorney can explain what’s going on much better than I can. So I am sticking to the business and cash flow aspects of your income real estate deals in this book.
- Your attorney is an expert on the legal aspects of your transaction. And your book’s author is an expert on the business and cash flow aspects of your income real estate investments. After you buy your income property, you will probably receive some rent security deposits. These can range from $1,000 for a small property to as much as $50,000 or more for a large property. But you are not allowed to spend these security deposits; instead, you must keep them in a bank account where they are safe and secure for your tenants.