All Forum Posts by: Tracy C.

Originally posted by @Devin D.:

@Tracy C.   A few questions first.  1. Is the home being rented at market value? 2. Are you happy with the property management services? 3. Have you read the contract in place already?   Lets assume that you are not happy with the property management service and it's below market value and there is no issues with the contract in place.  Then there are a few things you need to do after you have a copy of the lease contract and landlord agreement (the contract between the owner and the property manager).  There is likely notices that have to be given for both most likely 30 days for the tenant and 60 days for the property management company.  Often especially with month to month leases there is a first, last, and sometimes security deposit collected.  If this is the case you need to know before you close who holds these funds.  Often times will be the property manager but not always, and you need to know what amounts.  The property manager should be able to give you the move-in inspection. With all that being said if it's not already been agreed you will likely be legally obligated to honor the property management contract and the tenant contract until you notify them or intent to terminate or terminate and resign under more favorable terms for yourself.  Congrats on the purchase, just make sure you have covered your bases with the seller and if you need help and don't want to use the same property manager I would recommend finding one you believe will represent you and your new asset well.  They can advice you on what you will need to know and obtain prior to closing.  It's unfortunately all to often information is restricted once a relationship is severed or is known that it will be.  This is why prior to close and notifying the current PM and Tenant it is important to get all the information you will need.

Right now we are waiting to receive a copy of the current lease from the property management company. I would like to keep the tenant and I'm ok with the amount of rent they are paying. I just want to work direct with the tenant and not use a property manager. Hopefully I can work things out to work direct with the tenant as quickly as possible after closing. I actually the seller could take care of releasing the management company. I have been told the tenants do want to stay. They had been there since 4/1/2019. They decided not to sign a new lease on 4/1/2020 and have been just month to month. I would like to see if I can get the tenants to sign a 6 month lease but if not I'm ok with month to month.

Originally posted by @Marcus Auerbach:

@Tracy C. the lease survives the sale of the property. So if it has not been terminated yet, either party can terminate it in September and depending on how it is written most likly will then end 10/30.

Best practice would be to provide a letter to the tenant at the day of closing to introduce yourself, provide contact information, rent payment instructions, general instructions and if you want, your intentions for the new lease.

There are several good FB groups in Milwaukee. Where is your property?

Oh so I have to deal with the management company until 10/30/2020? I thought the seller would be able to terminate them for me and I would work direct with the tenant starting on 9/1/2020.

So I can't contact the tenant until 9/1/2020 right?

I'm in Green Bay.

Hi I'm purchasing a property on 8/31/2020 in Wisconsin that has a month to month tenant that will come with it. The current owner is using a local property management company. I'm unsure what will all happen before and after closing. Does the seller need to let the property manager go on 8/31/2020 and then I have my lease ready to give the tenant on 9/1/2020 to sign? We want the current tenant to stay and we've been told they would like to stay.  We're actually purchasing the house to eventually short term rent it but are ok long term renting it to start.
Any help would be appreciated!


Also are their any other good forums or facebook groups for Wisconsin landlords?

Dennis, This is my feeling too. Because down the road if I want to purchase more properties instead of paying with cash I'll just use my equity. But maybe my case is different because my credit union has loaned me money with no cash down or just 10% cash down since I have so much equity available. I'm buying my 6th property and putting $75K down but I choose to do that. Then after this property I'm taking a break for awhile. 

Jay C. Where are you getting 30 year loans? My investment loans are only for 5 years.

Wait BUT if we pay down a loan early that money you put down switches over to equity. Then can't you just use that equity to continue to grow? So use the equity instead of cash going forward? That's how I got going so quickly was I had a commercial with residential property I had paid off in full about 10 years ago. (appraised at about $370K) When I purchased my first short term rental property I didn't have to put any cash money down on it. I just used the equity from my paid off property to buy it without having to put any cash money on it. Then from their going forward I just had to put 10% down on future properties. That has saved me having to fork over lots of cash and that is how I'm purchasing my 6th investment property. (2 I sold for a nice profit)

Jay C. I'm using a local credit union 

Ok and he said the payment would drop from $1046.32 down to about $830. So that would save me about $266.32 a month then right. If so that's quite a bit. (Especially since I'm done investing for awhile with the 4 properties I will already have under my belt. I can't take on anymore risk) 

Samuel, How come your not counting in the interest savings I would have?

Here is the current info on the loan

Details

Current Balance

$175,991.39

Regular Payment Amount

$1,046.32

Amount Due

$1,046.32

Next Payment Date

Aug 15, 2020

Interest Rate

4.870 %

Current Year Interest Paid

$5,107.50

Original Loan Amount

$180,000.00

Open Date

Jun 14, 2019

Maturity Date

Jun 15, 2024

I'm mainly wanting to know if this is a good deal from the credit union and if I'm not missing anything. I figure since I'm not buying anything more for now I should at least try to save some money on a property I already have.