All Forum Posts by: Casandra M.

I'm from Wisconsin here - Just an FYI on the "WI Toilet" - a lot of these are in the older homes because farmers/farm workers would come in through the basement while still full of dirt or cow manure and use the facilities in the basement instead of tracking in dirt and nastiness into the house. This is also why there are also usually shower heads near a drain with no sink or curtain.

Strangest things I've seen? The first duplex we purchased had oddly placed stains near the top of the walls by the ceiling, as if someone projectile puked on a regular basis. Same place had holy water stacked all over the place.

Hi Everyone - I've been reading through this site to try an absorb as much advice, lessons, and financing information as possible, but haven't found any answers for my exact question.

I'm interested in finding hard money lenders to finance larger down-payments on multi-family units (loans of 60K or less). From what I've read, people are only using hard money lenders for the full sale price of units. 

Is it uncommon to only have hard money for the down payment, and to do a traditional financing option for the remainder? I was hoping I'd find support for whether or not it would be a good idea to get hard money for a 25% down payment, traditional financing for the remaining 75%, with all profits (rent less both loan payments-HML and traditional financing, prop tax, insurance, and 10% maintenance fund) going to the hard money lender under the loan is paid off.

Any guidance would be great. Thanks in advance!

Hi Jacob - My husband and I purchased our first duplex rental in Janesville last year, after much deliberation between Beloit and Janesville. We ultimately decided on trying to build our investments in Janesville first because of the bad rep that Beloit has for quality of tenants. The city of Beloit has been pouring a lot of money into improving the area and ridding itself of it's "rough town" reputation, but ultimately, a knowledeable family friend with over 30 rentals in the area convinced us that if we were looking to be a certain kind of landlord, that Beloit would not work for us. This was advice that was given while our family friend was actually trying to unload all 30 units. 

Janesville development is from multiple distribution centers being built right now, and the new dollar general distribution warehouse is holding their job fair this month, so employment should be increasing here shortly. The old GM Plant is also going on the global market here soon, so it'll be interesting to see how soon a business may purchase that location, and what type of work it will provide to the traditionally manufacturing-heavy workforce. 

Thomas - I'm glad you spoke on the topic of not accepting a "cash for keys" policy for tenants that display a lack of respect for a property. My husband and I just recently started purchasing rental properties in the last few years and we've debated this concept and found ourselves on either side of the fence (only in theory thankfully, as we've not had any evictions). 

While the idea of "cash for keys" can have an immediate relief to the Landlord, it does not provide a long-term value to the community as a whole. There are renters (especially in the Madison area and surrounding Madison communities) that are well-versed on that concept and will use it to their advantage at every rental that they occupy. 

On to your experience however: were you aware that the tenant was trouble-some and behind on both rent and utilities prior to purchasing the property? If so, did your attorney mention any legal ramifications that you could have taken against the property seller if it appeared that he purposefully hid this information?

Hi David - Yes, your second loan can be an FHA loan since your current loan is a conventional mortgage, and since you are planning on the new property being owner occupied. Keep in mind however, that most conventional loans will have a one-year clause that requires a property to be owner-occupied for the first year after it is purchased (that is, if your current conventional loan was taken out as against an owner-occupied property, and not on an investment-labeled property). If you are currently under this constraint, moving out of your first property can violate your first mortgage terms.

Thank everyone for the input! My husband and I actually pulled out and read through nearly every closing document we received and found the clause that outlines the loan expectations, and it turns out that we are within the loan guidelines because we complied with the one year owner-occupied rule. Though, once we refinance out of FHA, we will either need to live here for an additional year to get a lower interest rate (keeping the property as an owner occupied), or refinance as an investment property, at which point, we would need 25% in equity (just an FYI for others).

I've seen similar questions to my situation, but nothing that I feel gives me a "solid" response.

We have a 15 year fixed FHA mortgage on a two unit in Southern Wisconsin, that is considered "owner occupied". Our one year is up on living at the location, and my husband and I are now purchasing a single family home to move into. We will be renting out both units on the old property (for the past year, we lived in one unit, and the other was rented out) after we move. We are upgrading our home insurance to reflect that the old property will be a rental property, and it was brought up that we might have to declare that old property as an investment property.

My question is: Do we have to reclassify our mortgage as a rental property, if we did fulfill the one year owner occupied clause? Would this force us to have to refinance our old property into an investment property, before we rent out the second unit and move?

Any input would be greatly appreciated. If anyone needs additional information to help answer, let me know!