All Forum Posts by: Pete Krentz

Are you by chance going to do any of these with a virtual option? Just for me to tap in that is?

I live in areas with a rate of about 50% pet ownership at the low end. I love animals so try to accommodate as much as I can. I primarily rent to families and give them a break and don't charge pet rent and just do a deposit based on the animal - usually about $200-300/animal.

Does anyone know of a local lender that will actually allow the 3-5% down for an owner occupied multi family property. I've yet to find anyone that will go under 15% on 2 units or below 20-25% on 3-4.  I hate listening to the podcast hearing people actually get this and it's nowhere to be found in our area.  If you have found it please let me know!

I just went through this myself this last month with some great tenants so didn't have any of the complaint issues. They just wanted to buy a house in the middle of their lease.

I told them that I would list the unit for rent but they were responsible until the day the new tenants take over. They moved out this last weekend with 3 weeks to spare for me to get things cleaned/turned (needs some new flooring in their unit) and ready for the new tenants. You can be a stickler and hold them to your lease. It is after all a legal and binding contract. I however have found it makes things MUCH easier to just assist as best you can. It takes me 2 minutes to post a listing. That's not a lot of time to keep everyone everyone happy. A tenant that moves out happy tends to clean way better than an angry one.

Best of luck!

I refied in June in an owner occupied 4 plex (the owner occupied doesn't help my rate). It dropped to 3.25.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $490,000
Cash invested: $98,000

4 Plex - 2 Story Townhomes - 3 Bed 2.5 bath identical layouts. Middle units have 1 stall garage, end units have 2 stall garage and storage sheds in the back yard. All backyards are individually fenced.

What made you interested in investing in this type of deal?

Large units that were in good shape to keep maintenance costs down in the beginning. To house-hack and live in a unit myself while the other units paid the mortgage and provided a small amount of cashflow

How did you find this deal and how did you negotiate it?

MLS - Realtors

How did you finance this deal?

Selling prior homes - Conventional loan

Lessons learned? Challenges?

A nice well maintained building will limit your maintenance headaches while starting out. The limited interaction and desirable units have allowed me to keep tenants longer and allowed me to travel without any issues - for months at a time in this case.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $163,000
Cash invested: $32,600
Sale price: $199,000

SFH - Splity foyer - 4bed 2 bath 3 stall garage.

What made you interested in investing in this type of deal?

The house was already rented to a telecommunications construction company that paid a higher rent for the flexibility of adjusting tenants they had in the area. The company paid and handled everything.

How did you find this deal and how did you negotiate it?

MLS - I negotiated on my own as I was a realtor at time.

How did you finance this deal?

Conventional loan

What was the outcome?

I made an okay profit on the sale but the real value was the easy cashflow of $500/month. I never had to deal with the tenants as the company held the lease and moved tenants in and out. All I did for the entirety of possession was collect a check.

Lessons learned? Challenges?

Company leases can take away some serious headaches as far as tenant management. I could tell them about an issues (incredibly rare) and their HR department would handle it immediately.

A company may pay a higher rent for the flexibility of moving their employees in/out at will.

Challenges - I wasn't always aware when a new tenant would move in/out.

I used to manage a portfolio of apartments that had a lot of section 8 tenants. I didn't do leasing so can't get super specific but can offer at least my 2 cents on what I observed as the portfolio manager.

Section 8 had both +/- as you're aware. The income was stable and the tenants on it in our area were more likely to pay because they didn't want to lose their section 8 vouchers. It can take years to get into the program so they generally are pretty cooperative. Section 8 had some weird habitability rules but in general were straight forward and easy to comply with. I just remember getting a lot of letters in the mail for a unit inspection where I had to send a maintenance man over to fix something very minor before they would sign off. Minor being replace a light bulb/plate cover to something real like broken toilet/appliance etc.

Section 8 does tend to fall into a certain category of tenants. Not always, but in general, are pretty hard on units as a lower income tenant tends to be. They were however better on them than my non section 8 tenants in the same buildings. Again, they don't want to lose their voucher so try to comply as much as they can. I personally didn't have any major issues with the section 8 system. They aren't tenants I would pursue in my own personal rentals because my units aren't priced for that type of tenant. If I did have those units, I wouldn't mind participating.

I'm not aware of any specific "turn-key" places in Sioux Falls, but we do have a decent handful of property management companies. Keller Williams, and Hegg are the 2 major players for Realtors in Sioux Falls...I've worked at both companies. Keep in mind most Realtors will say they are great with investment properties but in my experiences maybe 1 in 100 actually is. They focus on personal homes so it's not really their fault, it's a whole different ball game.

If you have specific questions feel free to reach out to me. I'm no longer an active Realtor but I'm certainly willing to answer any questions about my home area!  I also have a pretty sizable network should you need assistance in any part of the process. Best of luck in your search!

You're probably going to run into the same issue here. Anything that is worth your time is sold prior to going on market or that same day. Prices here are pretty inflated and make a solid cash flowing buy difficult to find. Not saying it can't be done, but it's definitively difficult. That being said, here is the local area MLS.

http://rase-inc.org.idxbroker.com/idx/search