Looking to invest while looking for our own home

[Chase Nye]

Hello,

I am hoping to get some general advice as well as some Salt Lake City insight. My wife and I are moving to SLC this summer and hoping to find a place for ourselves as well as a buy-and-hold property. We will be in SLC for a minimum of three years and like the idea of converting our own place into a rental. We also have no problem doing some rehab, and hope to nudge our liability (our own place) as close to an investment as possible

My question is this: we have studied a bit about finding deals for rental properties that will cash flow, but should we apply those same strategies to our own home? Obviously, we will be considering different criteria when looking at neighborhoods. (schools, interests, hotspots, etc.) Now that we have narrowed our search to an area, should we be speaking with wholesalers, going to auctions, and working with a rock star agent to find these deals? Or should we stick to the path that non-investors take?

For some reason, my hunch is that those methods will only work when we are considering a home/neighborhood based on cash flow, and looking for money-maker prices. Do they work when we are focused on our own place? Or do our different standards render those methods less effective?

Hoping that someone can help us divide these two worlds that we are trying to navigate.

Thanks!

[Jerry W.]

Why not do both?  You obviously need a place to live and you will want it to be a nice place, but so will folks who will want to rent.  The nicer places are a little less money, but they are a lot less work as well.  No harm in following both.  Good luck.

[Jeff Brower]

Edit: I see I have sort of misread the original post, still going to leave my comment below just for an extra idea if you end up looking on the mls.

Have you considered a multi-family? A 2-4 unit would put you the furthest ahead and would allow the best financing options. Say you buy a home for yourself and use an owner occupied 3.5% down fha loan. Well if you then go looking for a buy and hold you will most likely need to come up with at least 20% down on that property. If you can find a 2-4 unit to owner occupy, then you can get the entire property for only 3.5% down.

I am actually in the process now of selling my personal single family home in order to do just this and buy a 3/4 unit place. I made the 'mistake' of buying my own house first 3 years ago. If I had purchased a multifamily, then I would be miles ahead at this point.

Just something to consider :)

[Curtis Fergus]

@Chase Nye I think I remember reading a post from you a few weeks back saying you and your wife might be headed out this way.  I agree with @Jeff Brower on the idea of house hacking a multi family if you can live with that while you are here. The problem in this market is finding a cash flow rental is extremely difficult. The values here in salt lake are just to high to positive cashflow without a substantial down payment. It can be found don't get me wrong it is just not as common to hear of people finding deals here that meet the guidelines you read about on bigger pockets from other areas. I found a few and I would love to help you find some as well. Maybe try some of the local REIA meetings and see if you can meet some wholesale people? But I'd say if you are looking for a single family home to live in you will probably be interested in a few of the areas in the valley with better neighborhoods than where you will be looking for typical rentals. My 2 cents on the matter... Let me know if I can help.

[Chase Nye]

Great insight. We are definitely open to a multi-family, and would love to hold one long term. @Jeff Brower We would love to get some help finding something, although we don't arrive for four months. We are definitely open to a multi-family, but assumed that the neighborhoods that we want to be in ourselves will not cash flow. I'm sure it's no surprise that we want to be east of I-15 and north of ~3000 south. We had therefore concluded that we should separate our investment and our own place, but didn't want to give up on using some investment strategies to try and cushion the costs of our own place.

Still sorting all of this out. Thanks everyone for the advice.

[Jordan Atkin]

@Chase Nye I'll start by agreeing with @Jeff Brower. I think using an owner occupied FHA loan to buy a multi unit is the single best investment you can make. The cream of the crop are side by side units with garages (my opinion)

Without knowing the details about your needs, expectations and pricing its hard to say what areas you would consider "good." I think it is very doable to find a nice property in a nice area that will cashflow once you move on. Personally, the majority of my rental portfolio is in east side SLC even though people have told me since 2013 (when I moved here) that the prices are too high and the returns are crap. 

Addressing your original question about methods of locating property: I think it boils down to time and how much time and effort you want to spend locating the investment. If you don't have the time to burn around locating opportunities then I would suggest working with an investor minded agent that can bridge the gap between the retail and investment markets. 

I know several and would be happy to offer referrals. 

Jordan 

[Chase Nye]

@Jordan Atkin Thank you for the response. It's great to hear that you are finding cash-flow properties east of I-15. We would love to buy our own place in the areas that I mentioned above. Finding an agent that can help us find a middle ground will likely be a great place to start. As far as time, we will likely commit to renting upon our arrival, which will give us a year to find something. Hopefully, a little patience will land us a good deal. 

If we intend to arrive in July, what steps do you think that we should take before then? I assume building a network by making contacts on BP is the best place to start. 

Thanks again for the help.

[Martin Carstens]

Hi Chase,  one thing for sure, do your self a favor and read a daily newspaper from SLC everyday.  I am a out of state owner, and I can tell you the best ten or twenty minutes I spend every day reading what is going on, priceless!  You will get to know neighborhoods, politics and what is up and coming. All great information for some one from out of the area. SLC and Utah have a lot going for them.

Best of luck! 

Martin

[William Hochstedler]

@Chase Nye

There's a lot of discussions on "house hacking" here on BP.  Try searching for the term to get other of perspectives.

Good luck.

[Melissa Gittens]

I agree with @William 

@William Hochstedler set up some keywords and educate your self about the market that you want to purchase in.undefined

[Becca Summers]

Chase, welcome to Utah soon! Yes where you personally want to live is very popular. Most of my buyers want east of state street there too so inbetween I15 and state street home prices are lower than just a few blocks east. Great little area with a lot of homes needing renovation. You can get good deals there you just have to move fast.

My advice on turning your home into a rental down the line is find an area you want to invest in and purchase there. Unless you plan on doing C or D rentals then maybe don't move your family in. 

I'd be happy to help you find great areas to rent in verses invest in.