First time: turning owner-occupied to SFR

[Carrie Westover]

Hello, I have just joined this site and this is my first post. I have been impressed with the wealth of information so far and I am looking forward to learning so much here.

We recently refinanced our home to a 12 year mortgage and now have the opportunity to "house-sit" our relatives home for a year to 18 months at little or no cost to us. It is the perfect scenario for us to jump into real estate investing, specifically SFR, as my husband and I have contemplated doing in the past.

We should be able to rent our current home at or above our current mortgage payment and continue building our equity in this home, while living elsewhere.

My question is this, will we run into problems with our lender since we recently refinanced? How should we approach them, if at all? Is it required by law to notify lenders when changing an owner occupied home to a rental? We have lived in the home almost 5 years.

Any advice or expertise in this area would be greatly appreciated.

thanks,

Carrie Westover

[Jon Holdman]

I'd consider six months PITI to be a bare minimum reserve amount. Six months rent would be better. Even if the furnace, for example, works fine right now it will choose the first really cold day of the year, on a Sunday morning at 3:00 AM to die. You'll pay a service guy, if you can find one, a premium price for a fix. Or a couple grand for a quick replacement.