Goal and strategy review

[Ben Visser]

First goal is to carve out more time to be involved in the forums and doing more research through them. I pick up the podcasts often, but have been slower at carving out time to be on here.

I set a goal of 9 doors/deals a year for the next 10 years. The aim is to create long term passive income. I'm posting my strategy here for critical feedback and insights to tweak it, if necessary.

My partner and I own a duplex in Ogden, UT and a home in SLC, UT. The larger side of the duplex had renters in it when my partner bought it. Rent was too low for the area, we raised it $100 (still too low, but they do take good care of their home. That rent raise meant the mortgage was covered, leaving my partner to only pay his basic utilities and the shared water. 

I live in a home where I rent out the 2 basement rooms and live on the main floor. When both rooms are rented it covers all but a $100 of the mortgage and the utilities.

Here's the plan so far:

My partner will finish the renovation of his side and move out next month. We will rent that side (around $700) and be positive cash flowing. The property is zoned for up to 4 units, but city restrictions now say our lot is too small to add more units. A trust owns a sliver (7x194') on our property line. If we can purchase that we would have enough land to build a 3rd unit. The city said it would be easy to get that permitted if the land is obtained. The Trustee is working on getting back to us on the sale of that sliver. We may be able to take out a 2nd mortgage to cover the cost of adding a 3rd unit. Ballpark is $50k for the addition, and expected rent is $850.

My home in SLC is luckily in a zone where accessory dwelling units are allowed. There is enough equity that we should be able to get a HELOC to pay for the accessory unit construction. Still thinking about $45-50k for costs to build. Max size allowed is 480 sq ft. Rent would be $800-1000 depending on if we can make it a 2 bedroom.

I'll finish the kitchen in my basement so if I move out we would basically have 3 units (non-conforming) with positive cash flow.

My partner can get a 203k loan if we find a property. We found one, but HUD allowed non-profits to bid before owner occupants. That is confusing to me, and I'm digging deeper to see if that follows their policies. It would be a great home because it could also have an ADU built in the back of it for another rental.

If we don't get the property above, we will still keep our eyes on the MLS for a property where a 203k works and is ugly enough that normal owner occupants won't touch.

between the duplex, building a 3rd unit, and building an accessory unit on my house, I count that as 3 doors added to the portfolio. If we find a 203, that could be 4. The last 5 doors this year are unknown. My goal is to solidify a plan on doing sub2 investing like podcast 2 and 70. Marketing plans are the next step on this vein of the plan.

After reading this, what are your thoughts? Am I missing anything critical in the path of thinking? Any of my numbers off?

Thanks in advance for any feedback you can share.