Local Real Estate Investing Advice in Ogden,UT?

Question

Hello BP,

New investor here, looking for local advise on the residential rental market in the Ogden, Utah area?

My wife and I have been doing research to determine the best place for us to start buying rentals to hold long term for cash flow. Our research led us to Ogden, however we do not live near by.  We are hoping to team up with a local individuals that are knowledgeable on the area and understands what to look for in an investment property.  Our plan is to purchase small multi-family properties (2-4 unit) and we would love to get one under contract before the end of the year.  Any advice/knowledge that you are open to share would be greatly appreciated.

Thanks in advance,

Justin

William Hochstedler · Answer

It's been a while since I posted anything about the general market conditions in Ogden.  So here goes:

In general, because of the flight to value, many owner occupants are buying all over Ogden.  The amenities continue to improve and there are still several massive public/private initiatives in the works like the Hostess block and the East-Central plan.  Because of the influx of owner occupants who are not as familiar with the block-to-block idiosyncrasies of Ogden, specific location is less of a determiner of value.

The major problem with the inventory in the downtown areas is still the massive amount of deferred maintenance.  For the past 75 years there has been almost no capital investment into these aging buildings.  Owner occupant populations have lacked resources.  The "Own in Ogden" (in my experience) has helped widows shore up some structural sagging and maybe replace a roof here and there.  But it hasn't really touched the barely functioning mechanical systems that have been band-aided together for decades.  We constantly see HVAC, plumbing and wiring systems that can only be work/rent trades with tenants who convince a landlord that they can rewire the house cheap!

So if you're looking at stock built before 1950, assume that you will spend $30-40/sf fixing building systems that are dysfunctional and unsafe.  Beware of buying flipped investment properties as well.  Although there are many good operators out there, your needs from a property that you will own from 5-30 years are not aligned with their short-term profit incentives.  In this market, a flipper does not make a penny more by adding over-counter outlets or attic insulation.  But instead can profit from granite countertops and other "wow" items.

A few years ago when Ogden was cheap, the rent to value ratio was very good because Section 8 housing drove higher rents.  That is no longer the determining factor as surrounding areas rents have increased substantially.  Because of this Ogden's rents have not climbed proportionally with the rest of the Wasatch front as they were high to begin with.

Because of Ogden's progressive planning & zoning and comfort with higher density projects (second only to Salt Lake), we are seeing a bunch of 10-50 unit multi's going up all over town.  It is unclear how this added inventory of new housing will affect the existing stock.

I think that Ogden will out-perform the Wasatch front outside of the immediate Salt Lake area.  Ogden's has some fantastic amenities like Snow Basin and Powder Mountain with its massive renovation.  Weber State is aggressively increasing its program offerings. But it is still the proverbial worst house on the block.  Ogden will not only benefit from all of the economic assets that Utah has to offer, but be further buoyed by the law of conformity.

Of course, like many other places in the country, the market is overheated right now.  Here in Utah we are experiencing a building boom much greater than I've experienced in 17 years.  We can't get roof trusses within 4 months for example.  So I definitely think there will be a return to some sort of sanity (or worse) in the next couple of years, Ogden should have a brighter upside than many other markets because it was never a fringe market--only a distressed one.  It is a cultural hub with a lot going on, not some exurb with cheap land an long commutes.

So Ogden is still a great place to buy.  But make sure you consider the real costs and have a lot of patience for the real payoff.

Duane Richards · Answer

Hello Justin,

Welcome to to the real-estate market in Utah! My wife and I started research and education just a bit over a year ago. As part of that process (BP forums, articles, books podcasts), we took a few trips around our beloved Utah to see where we might want to invest. One trip took us to Ogden where we interviewed a great property management company (Reeder Asset Management) and scoped out a lot of multi-family units. We found most of the multi units were converted homes, many of them pretty old. Buy in was much lower than Salt Lake or Utah county properties and rents came closer to the 1% rule. We eventually stuck with our "familar" areas for our first investment, but I still believe Ogden is a great place to look as prices are still lower, but appreciation is sure to rise with the other Wasatch Front areas.

If you're looking to do long-distance, it wouldn't hurt to reach out to Reeder or another PM group as they were very helpful in pointing us towards the "good" neighborhoods to narrow our search.

Good luck with your real estate ventures!

Eric Trostle · Answer

I second and also recommend Reeder Asset Management!

Stefanie Jensen · Answer

@William Hochstedler

Well Said William.

As an Ogden resident, investor and real estate agent, I see things from much the same perspective. You nailed it on the flip houses with the wow features, but no real structural updates!

I will add that I do see so much opportunity here in Ogden. There are still quite a few little pockets of downtown that I know will be gold 10 to 15 years down the line. Change is happening and it’s great to see owner occupants buying some of these older homes downtown and believing in the revitalization. It is tough right now because just about everything in Utah is overpriced just because interest rates are so low and inventory is so low. It’s kind of exciting to see how all of this will play out over the next few years. But as always, if you’re looking with the correct lens, you will find opportunity here. It’s a great place to live and I love helping people find properties that are not being used to their full potential. I love it here.

Eric Trostle · Answer

I was born and raised in the Ogden area.  There are good spots and not so good spots like anywhere else but overall is a great place.  Depending what your looking for you can also look in the surrounding cities(South Ogden, Riverdale, Washington Terrace, Roy, North Ogden etc) are great as well.

In the Ogden area you have Weber State University, Hill Air Force Base, and a lot of jobs which keeps rental prices high and in demand.

I’m happy to share what I know and discuss any questions concerns you may have!

Marlina Eckel · Answer

I have done some investigation of the city and it is very important to know your neighborhood.  There are some valuable posts in this forum, so definitely search around a bit.  Ogden is changing, but there are some areas you would definitely want to avoid.

Eric Trostle · Answer

@Bastian Kneuse I haven't personally been involved in 50+ unit real estate transactions but always looking for new challenges and ways to grow though.  As for some insight to the market here...Weber and Davis counties are experiencing very very low inventory for people looking to buy, rent, or build and has created a high demand for everything and anything.  We just had our annual economic and housing forecast for the area and are projected to see house prices go up another 10ish% mainly due to the high demand of people needing a place to live.  If you're interested in listening to the entire forecast you can do so here.  https://fb.watch/3728Ule-_z/.  Let me know how I can serve and help you in your journey!

William Hochstedler · Answer

@Bastian Kneuse

That's a pretty open ended question.  There are a couple of projects going in the works and a lot of new commercial still happening in Ogden.

Utah's fundamentals are terrific and I think it will continue to out perform the country in general.  We can put a lot of new housing on line before we have sane inventory.

I'm still bullish on Ogden for reasons above.  Take a look at the footprint of the FrontRunner.  Ogden is still the least expensive real estate served by mass transit in the Greater Salt Lake area.

Are there a specific projects that you are considering or are you just doing background on the market?

Bastian Kneuse · Answer

@Stefanie Jensen @William Hochstedler @Eric Trostle I am investing in large multifamily properties (50+ units). I am interested in Odgen. I am curious if you have any insights into this real estate class and how it is performing in Odgen?

Justin Darrow · Answer

Thank you everyone for the great insight and local knowledge of the market!

It has given us a lot to think about and we are already making adjustments to narrow down our criteria. Our plan is to hold on to the properties long term so it’s seems the opportunity in Ogden is possible. We loved it when we visited earlier this year and are hopeful to find a deal soon.

We were planning to reach out to Reeder Asset Management already but it is great to hear good things from other people.

Again, we are very appreciative of everyone’s advice!

Local Real Estate Investing Advice in Ogden,UT?

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