All Forum Posts by: Dean Klein

Hi Jonathan, I recently bought my 5th rental property (1st one bought with primary loan 5 years ago, rest bought as strict investment loans) with a 15% down primary residence conventional loan and moved in. I would like to do it again when my one year of required occupancy is up, any rules against doing so if I'm purchasing another property in the same area? I am wanting to purchase a duplex 2 blocks away from the current one I just bought in one year and I am not sure if the bank will allow me to as an owner occupied loan.

I issued a 28 day notice to vacate to a tenant who has gone bad after more than 2 years of good behavior, and on time rent. The notice was issued February 26, before the ban on evictions in WI. The move out date was set to March 31st, and on March 31st, I noticed he was still there so I sent him a message basically offering to extend the notice to vacate out until May 31st because of Covid-19 and I thought I couldn't evict him anyway so might as well work with him. The agreement was only if he paid April and May rent at the normal rent rate by the 4th of the month. He said he would pay half that friday and the other half in two weeks, I agreed but he has not paid, and I'm getting nothing but excuses. I believe he is going to take advantage of this and not pay. This is a tenant who has several lease violations in the past several months such as unapproved tenants living there, sneaking pets in, ect. I noticed in Governor Ever's Emergency Order this provision "However, if the tenant is holding over on the property, in violation of Wisconsin Statute § 704.25, the Emergency Order does not bar a landlord’s right to seek relief against the hold-over tenant."

Would my offer to extend the notice, even though it was based on him paying April and May rent as usual, constitute him as not a holdover tenant anymore and therefore, I would have to wait to file the eviction? I understand that contacting an attorney is the best option however I am just curious if any other WI landlord has any input on the situation. 

@Gp G. I would deliver the pay or quit notice to the tenant asap even though they say they will pay on Friday. I would just tell him that you have to protect yourself and if he plans to indeed pay on Friday, he has nothing to worry about. Delivering the notice now gets a jump start in case he doesn't pay, then you saved yourself a few days where you can then start an eviction. 

I have a rent collection bank account that is only used to collect rents. I give the account number to my tenants, and it is up to them to deposit the full rent before the 3rd of the month to avoid late fees. I've been using this system of doing my rent collection for about 2 years now and it's been working very well. It puts rent collection on autopilot for me.

@Bridget Y. Just a conventional loan with 15% down for a duplex.

@Bridget Y. That's what I was thinking but if I completed the 1 year of owner occupancy, I would think that I would be free to obtain another one if I wanted to move, regardless of the reason but that must not be how it works even though I'm putting down 15% and not using a special loan program where I'm putting super low down payments such as 3.5% or 5%.

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

Back story: Wife and I divorced June 2018, at the time, we had 6 properties and she received 2 in the divorce subject to the mortgages on the properties. Ex wife has a drug problem and has not been responsible with the properties as far as managing tenants, and making sure the mortgages got paid. I had to step in before my credit took a hit, over a year of back and forth in court, she has been ordered to sell both places to relieve my liability.

One of the properties is a duplex with good numbers, I used to own the property and a good amount of money was spent rehabbing it at that time. My ex has been coming up with excuses in court to delay listing the property however I believe the numbers are good even at the current fair market value and finding duplexes at reasonable prices in my area is not easy. I'm planning to use the FHA loan to owner occupy the property for one year before I move back to the house I am in now. Would this be something you would do given the drama surrounding it, or would you pass? Just looking for opinions, to me it's just a business transaction, plus it will end a year long stress.

UPDATE:

I sent the tenant a rent increase from $625 to $750 and he moved at the end of July. I re-rented the unit for $825 a month. It was a win win!

@Jim K. It is more about respect than money really. I feel that the relationship is strained to a point where he feels it necessary to call me and complain about things that are not hurting the property at all, temporary things like me leaving building materials (old windows) next to the house out of site to the street to haul to the dump in a week or so. If he feels it necessary to complain about simple things like that at $625 a month, I can only see the problem getting worse with a higher rent, he will feel even more entitled because he's paying more. His wife is a nice gal who never bothers me and I don't think really cares about the issues that he brings up to me, if he was more like his wife, I would not be considering terminating his tenancy, and I have talked to him in the past about his behavior, told him I would not tolerate it and that if he didn't like the way I did things, he could move and it did get better... for awhile until it recently started again.