Building a property portfolio using owner occupied financing

[Dean Klein]

Hi All,

I've currently got 4 properties including my primary residence. I would like to acquire the next 3-4 properties using owner occupied financing where I will live at the property for 1 year, then convert it into a full rental, and buy another property to live in, and repeat that a few times.  The properties will all be in the same city though. Will banks give push back for doing this? Has anybody else built or added to their portfolio's using this strategy? I'm wanting to do it for the 15% vs 25% down payment and also the better interest rates. All of my properties will be duplexes. Any insight is appreciated!

Dean

[Mike Dymski]

Terms on investor loans are not much different than owner occupant...20% down vs 25% and maybe 50 basis points difference in the rate. Moving every year in and out of investment grade properties and neighborhoods is a lot of gymnastics for this small difference relative to other profit aspects in REI.