New Utah Investor Looking for Advice (First Post)

[Daniel Criddle]

Hey Fellow BP Investors,

Just getting to a place where I'm looking to start investing in real estate, and could just use some opinions. Looking primarily at Utah/Salt Lake Counties. Sitting on a little cash + a HELOC of $115K. The BRRRR strategy makes a ton of sense, and would love to get going with it, but having a tough time seeing the deals in this market. One of the fastest growing markets for real estate/appreciation in the country, and there are plenty of flippers/investors as well.

Having said that, I'm confident there are deals out there to be had if you have the right eyes and resources. Do a decent amount of financial modeling/analysis for work, so savvy enough there. Planning to start the 120 hour course (likely Stringham) to get my RE license as well. I have a few contractors in my network I'd trust - would need to find a 1 or 2 more for BRRRR I think. Also will do some of the work- we handled subbing out the finish of our basement, painted it and did IKEA kitchenette ourselves with sink, cabinets. Willing to learn/do more if it makes sense.

Ok, thanks for indulging me with that background. Here's where I'm at. For my first investment, debating staying at this house, looking for ideal BRRRR property, and continuing that pattern, or a quasi-house hacking approach. Our house is ~3300 square feet, finished basement that we aren't renting. We (family of 5) love it, originally had no plans to move, and could stay here a while. Built in 2018, not a perfect rental, but I think it would rent decently in this market, and provide a little cash flow each month. Not sure how much extra the ~1100 sq ft basement would get in rent compared to just renting the main/top floor (4 br, 2.5 bath), but difficult to rent them separately here. So I've debated looking for a new deal to pop up, checking online every day, hoping to find an ideal BRRRR candidate or buying another home nearby and renting this one. It's basically a bigger version of our home that would allow us to keep the same lifestyle (excercise, rec room, guest room, wife's work room) + finish an ~1100 sq ft 2 BR, 1 bath full apartment in the basement that would likely rent for ~$1300, based on market.

So I'd cover costs, perhaps lightly cashflow this home that's in great shape a few hundred bucks max (currently 20 yr mortgage), and then cover ~40-50% of my mortgage with 5% down on the new home (builder would finish the basement). It'd be my 2nd home with this builder, and I've sent them referrals as well, so they're including a good amount of upgrades etc beyond their normal stuff, and it's a good deal relative to this crazy market. I'd put a deposit down immediately, and close in May/June on the new home. I think my hesitation with the house-hack option is, it isn't something I could repeat, bc renting a larger home like that would be tough, and unless code changes, I couldn't rent the basement separately whenever we were to move. 

This is long, if you made it to this point, thanks. After re-reading this, I feel like a pompous, spoiled brat, please don't judge. We did time in old apartments and basements for many years as well :) Any commentary, advice, feedback is welcome in regards to these options, and the general investment environment in the area if you have experience. Thanks, Daniel

[Casey Christensen]

@Daniel Criddle - Is it difficult to rent your current house separately because there is not an additional entrance for the downstairs or because of the location?  And you are saying what you are considering is renting out your current house and building a new house that you could house hack? I think the house hack is a brilliant strategy. My wife and I have house hacked our home in Lehi for the last 4+ years. We just took over the whole house and are planning on building an addition to the garage with an apartment at the back that we can rent out in the near future. I think if you can cash flow and are in a good area and can build a new house, have a portion of your mortgage covered, and live the lifestyle you want, you should go for it. If it helps you accomplish your goals that is. The beautiful thing about real estate is that there are so many strategies and so many ways that you can accomplish your goals and live the life you want. Good luck with whatever you chose to do.