Any tips for first time real estate investing in Utah?

New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote

Any tips for first time real estate investing in utah? Everything is just so expensive I've been considering out of state investing but I'm not sure if I should for my first time purchase. (I make about 40k a year and have pretty good credit, and my wife is still building a clientele with personal training and nutrition)

I really wanna get like a duplex or quad but starting out I can only seem to find 500k. I feel like I wouldn't be able to get renters in unless I pushed it out to like a 50 year loan lol.

Any advice or real estate investors in the area wanna give me some tips would be great! Help me out of the rat race 😅

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Frank Rodrigues

Investor · Kansas City, MO · Member since 2021 · 110 posts · 65 votes

Thomas,

Coming from someone who lives in UT but does 100% of cashflow in KC now. I would only get a fraction of the success in UT. Everything is so overpriced/expensive in comparison when it comes to cashflow which is what I do. If you ever have any interest in OOS investing and have questions feel free to PM me and best of luck!

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William Hochstedler
Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
4y
Network through your closest circles. Ask everyone you know if they know anyone who might have a house to sell. Your sphere and neighborhood are your competitive advantage to find deals.
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Account Closed
Realtor · Herriman, UT · Member since 2021 · 28 posts · 20 votes
4y
Hi Thomas!
You can find Duplex for 375k-425k in Weber County, a bit north from you. You are going to get older homes up there. Another way to get around finding a duplex that matches your budget, you can find a SFH with a Mother In Law and you can rent out the top and bottom floors independently to help you cash flow. You can also consider renting room by room, think of things like this near college towns. Or, find a home that has an unfinished basement that you can finish yourself (?) and add rooms to in order to possibly add equity. In Ogden you have Weber State University, but what about down in Provo (BYU) or down by you in Orem (UVU) or keep going south finding routes by colleges. Or find a condo or townhome (lower price point) that you purchase and then you can rent out the rooms by college towns (assuming you don't want to live there and can just rent out all rooms, you can start potentially cash flowing and building equity.)
If I were you I would first start speaking with a lender who can help you figure out what you need to get into property and at what price point, that will help you narrow your scope and timeline in a world of REI which can be overwhelming if you are not focused in the right place for you.
Good Luck!
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Esteban Medina
Rental Property Investor · Orem, UT · Member since 2019 · 7 posts · 6 votes
4y
@Thomas Ray Saccato hi! I also live in Orem, i am currently house hacking rightnow. I still have a ways to go but how i got into a house hack was buying a house with a mother in law basement and renting the basement apartment out. With prices the way they are, my main goal wasnt to cashflow right away. I figured if i could pay the same as what i was paying in rent each month plus the tenants rent to cover the mortgage id be winning. Which has worked! Once i move out it will cashflow 400-500 not to mention the equity thats grown. It’s definitely delayed cashflow but worth it in a market thats growing and getting more expensive to get in. Im still starting out as well but let me know if you have any questions!
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@William Hochstedler, thank you! I'll make it my priority and start calling them all and see what what prospects I can find.
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Niomi Snedden, thank you so much for the insight, I love all of those points. I'm gonna get started on finding a good lender then and see what price point works then and talk the pros and cons renting rooms out. I know down here near uvu the rooms clear out in the summer so it might not be something I wanna do right away. I heard something about some law requiring you to live in a home a year or so before being able to rent the whole thing out do you know if that's true? I guess I should also look into finding a lawyer to ask specifics like this? Anyways thank you I appreciate all of the help!
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Esteban Medina, thank you! That was my exact train of thought going into it, I've tried searching a little bit but could not find anything from the one realtor I spoke to, ill try the first comments suggestion then speak to more realtors.
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Account Closed
Realtor · Herriman, UT · Member since 2021 · 28 posts · 20 votes
4y
You bet! Ah, the seasonality of being around college towns definitely is a consideration. Depending on the loan you get will have those requirements but a good lender will be able to really speak to that. I have lenders I have personally and professionally used if you need anything... Don't hesitate to connect and ask! Where there is a will there is a way, just keep doing what you are doing and your plan will come to motion.
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Esteban Medina, also! Have you heard any laws here in utah about renting out a whole what is that multi-family unit? The mother in law basement, i heard there's some law requiring you to live in it for like a year or two before being able to rent it out or rent out the whole home?
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Niomi Snedden, thank you! I'll keep that in mind moving forward, I appreciate all of your feedback.
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Frank Rodrigues
Investor · Kansas City, MO · Member since 2021 · 110 posts · 65 votes
4y
Thomas,
Coming from someone who lives in UT but does 100% of cashflow in KC now. I would only get a fraction of the success in UT. Everything is so overpriced/expensive in comparison when it comes to cashflow which is what I do. If you ever have any interest in OOS investing and have questions feel free to PM me and best of luck!
2 Reply
Christopher Nehren
Realtor · Salt Lake City, UT · Member since 2021 · 14 posts · 10 votes
4y
Ogden is definitely your best bet to get started if you plan to start of with a duplex. You may find deals in other places like West Valley, but I have had the greatest success finding off-market deals in Ogden for all of the clients I work with. You can get a decent off-market duplex or triplex in the $300k-$400k range. That being said, it is on the complete opposite end of the valley so I am not sure how that would go with your work schedule and commute.
There are some pretty good options to do a SFR househack in places like Lehi and Pleasant Grove. I feel like I don't see as many in Orem with ADUs or mother-in-law apartments, but Provo does.
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Tyler Cazier
Realtor · Orem, UT · Member since 2020 · 7 posts · 3 votes
4y
@Thomas Ray Saccato hey Thomas, we should talk. I also live in Orem.
1 Reply
Matt Todd
Member since 2019 · 4 posts · 0 votes
4y
People will buy small multi-family at break even all day in Utah/Saltlake County so it's really competitive and if you aren't financially prepared for initial expenses and no/low cashflow it might break the bank. Values went up 20-30 percent in the last 12 months so people are shooting to make money on appreciation rather than cashflow. It can still work out super well, but it's a bet, and if you're spending your last dollar, you're in a less stable position than your competition.
If you want cashflow in Utah (as in more than $200/month), vacation/short-term rentals, treating an ADU like a duplex, or renting by the room have better margins.
They all have limitations.
Vacation rental laws are dicey in some areas, you'd need to furnish it, and management could (at least initially) be way more hands-on.
The ADU/duplex idea is tantalizing (they could be 100k cheaper and yield higher rent than a legal technical duplex), but it's always illegal (when not owner occupied and properly licensed) and cities have a really big stick they can shake at you if your neighbors complain. If you get caught in year 10, then maybe you've already made money, but if it happens in year 1 (at the same time you just spent 50k on rehabs and your furnace goes out), then you're in the hole and have no way to get out. Also, if something really bad happens (house burns down, tenant gets electrocuted and dies) things will be much worse for you when it comes out that the setup was sketchy and didn't have any official stamp on it. If you want to try it just know the risks.
Renting by the room could be super lucrative (especially in cities with housing shortages and young, single people), but also flirts with illegality. Provo, Orem, and Salt Lake have a "3 unrelated persons" max tenant limit per unit. It's totally insane. That means a 7 bedroom house is allowed, you guessed it, 3 tenants. Everywhere else is 4. Elsewhere (like Seattle, Meridian Idaho, or Bend Oregon) you can have 8, 10, or unlimited tenants, but nowhere in Utah. Point is, your best bet would be something with a really low price point (like a condo) so that you can still cashflow with 4 tenants.
Potentially other niches exist where you can win big, but there are a lot of people watching this market. If you have an unfair advantage, use it. If you want to try to solve a hard problem, do it. Otherwise, you can still build tons of wealth through debt paydown, tax breaks, and appreciation on small multifamily, even if it "only" breaks even on cashflow. Just pick a good property that will last, in a city where things are moving up (and be prepared to pay over asking and waive contingencies).
PS. Lots of cities are adding their first big apartment complexes, so if you can get invited to that party (even as a limited partner), that's something municipal governments really want to make happen right now with us running out of land and having big housing shortages.
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Frank Rodrigues thank you, ill have to add you so I can ask you ant questions if I decide to go that route, know anything about real estate in texas?
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Christopher NehrenTexas? Yeah my work would probably appreciate if I moved somewhere like west valley but I'm not that big of a fan of the areas in west valley. Wow I'm surprised you can find them that cheap in utah.
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Frank Rodrigues
Investor · Kansas City, MO · Member since 2021 · 110 posts · 65 votes
4y
Originally posted by @Thomas Ray Saccato:
@Frank Rodrigues thank you, ill have to add you so I can ask you ant questions if I decide to go that route, know anything about real estate in texas?
I don't, but here is some quick info on KC for you.

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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Tyler Cazier sure man, looks like you do a podcast for real estate?
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Thomas Ray Saccato
OP
New to Real Estate · Orem, UT · Member since 2021 · 11 posts · 1 vote
4y
@Matt Todd wow that was a mouth full, I had no idea about the 3 tenant max that's very interesting I'll have to keep that in mind, I would already be worried about younger adults leaving every summer if it was Orem or provo college tenants. Multi-family seems like a good idea, I have not considered condos at all.
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Michael Meyers
Investor · Provo, UT · Member since 2021 · 10 posts · 2 votes
4y
I agree that house hacking is the best/only way to go in Utah and Salt Lake County these days. Also, just keep a constant eye on listings. The market has cooled the last several weeks and some properties are sitting for days or weeks. These are where you will not have to worry about bidding with others and can sometimes get a better "deal." (I bought a duplex in Provo this summer and paid less than asking, in part because it sat for almost 4 weeks.) Best of luck!
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Josh Butler
Sandy, UT · Member since 2014 · 28 posts · 7 votes
4y
@Matt Todd Are those limits on number of unrelated persons because those cities have universities within their boundaries?
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Matt Todd
Member since 2019 · 4 posts · 0 votes
4y
Originally posted by @Josh Butler:
@Matt Todd Are those limits on number of unrelated persons because those cities have universities within their boundaries?
Yep. Kinda makes sense, kinda doesn't. The cities don't want students filling up regular family neighborhoods so they make it unprofitable to try.

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Tyler Cazier
Realtor · Orem, UT · Member since 2020 · 7 posts · 3 votes
4y
@Thomas Ray Saccato, yes, my podcast is The Utah Real Estate Show (theutahrealestateshow.com). Several episodes about investing.
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Tyler Cazier
Realtor · Orem, UT · Member since 2020 · 7 posts · 3 votes
4y
@Thomas Ray Saccato yes, my podcast is The Utah Real Estate Show (theutahrealestateshow.com). Several episodes about investing.
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Matthew Fassett
Rental Property Investor · Lehi, UT (Lehi) · Member since 2018 · 91 posts · 99 votes
4y
@Thomas Ray Saccato. I use to always think that the west valley area was just a myth of how bad it is in Utah. My wife is from Utah and I’m from Idaho. Long story short we lived in west valley in those new apartments by winco
And boy oh boy is it a different world in west valley. We could only handle 6 months before we moved to Lehi.
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Eric Douros
Real Estate Agent · Salt Lake City, UT · Member since 2013 · 19 posts · 5 votes
4y
@Thomas Ray Saccato
Hi Thomas. Welcome to home investing!
I think this area of investment is a great long-term strategy. While prices for homes is relatively high at the moment there can still be some good avenues to consider.
1. I would do some searching online for companies that market as, “we buy houses”, or, “sell my house fast Utah”. Try not to click on the ads as they cost money for those companies but rather look at the organic results. These guys can have contact pages where you can submit information and request to be on their email list. It may be a good idea to add some of your criteria for buying.
This is a great way to see some discounted properties they offer. Typically they are only looking for cash buyers but sometimes they will except buyers who have acquired a loan.
2. If you don’t have enough down perhaps looking for a partner could be a good approach.
Talking with the above mentioned wholesalers, I’m asking questions like:
Do you offer hard money loans and what are your terms?
Do you have a recommendation of hard money lender‘s?
What criteria do you look for when someone has ability to buy through a traditional loan?
3. Go to a couple local meet ups with t wholesalers when offered, or through local Reia’s, utahreia.org for example. Don’t be afraid to talk to people. Get your name out there. Even if you’re just a newbie.
Hope some of this info helps!
-Eric
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