Mistakes from my first rental property investment

We just closed on our first real estate investment property. Though throughout the buying process, I felt that I am making the right data based decisions, I still made mistakes.

This article is just a log of those mistakes and learnings which I took from them.

(a) What happened ?

During the lock change appointment, the realtor dropped the keys with the locksmith and left. The locksmith was alone at home. My expectation was that the realtor will stay at the home, pick up the new keys and then come back. But it looks like there was a mistake in communication. I had to figure out where to give the keys, and beg the realtor to pick the keys for me.

Learning from this experience ?

Communicate and confirm the expectations clearly. Mention exactly what you are expecting from the other person to be done. Confirm with the other party. Plan ahead of time, how the next steps after closing on the house will be handled. Have complete clarity what, who, when and where for each task ?

(b) What happened ?

We missed adding the home warranty in the purchase contract. My understanding was that we had added it as I had requested the agent to add it. But I found out later after closing that we didn't add the warranty.

Learning from this experience ?

Trust but verify. Do NOT depend on the realtor or any other party in the transaction to do the due diligence. Validate all the contracts for key details e.g. names, contract conditions, dates, address etc. Never sign the contracts in hurry without reading them thoroughly.

(c) What happened ?

I couldn't use the funds which we transferred from Surbhi’s account to my account. This is because we had to get a letter of explanation for the funds and gift certificate from Surbhi. Since this was going to take time, we couldn't use these funds. This was a result of poor planning.

Learning from this experience ?

Plan for down payment and closing costs ahead of time. Know which account this money is going to come from. Do not move large funds to and from accounts. If you need to sell stocks to gather funds, do so asap. Track your stock windows when you can sell stocks / cant sell stocks.

(d) What happened ?

The seller's agent called the lender and impersonated the buyer's agent. Using this they social engineered the appraised value of the house out of the lender. This gave the seller an added leverage in the negotiation and they were not willing to budge and became adamant.

Learning from this experience ?

Talk to all the parties specifically about not sharing any information without written authorization with any other party. Do not share pre approval letters with contact info for loan officers. This gives the contact info to the seller's agent and might get used the wrong way.