CASH FLOW - Where to invest if you were to start all over?

Question

I haven't owned an investment property for move than 10 years, what are my options to create an investment with passive income?

I live in Utah and don't mind investing out of state for a worthy property, but my first choice would be to invest locally to get my feet wet.  I qualify for a VA loan, and have been qualified for 453k and more with cash I have on hand.

Options I have looked at:

1) Build a Duplex/TriPlex/Fourplex

2) Buy existing multi unit, with or without a seller carry.

3) Possible Mobile Home park??

4) Buy a Condo in Park City and rent daily

At this point, I'm looking at options and really best practices from experienced investors if they where to start all over again?

How do I leverage my first property to buy future properties?

Thank you for your time and patience with a new investor.

Keith

Douglas Larson · Answer

Hi Keith, That's a big question but I can see you've thought about it. This is an exciting step but I think there are some important details about you that will factor in.

You didn't say anything about a spouse or kids or a job or handyman skills. You also didn't mention if you like Herriman or would prefer another location. Herriman is a good area with new schools, great parks and lots of growth. I have a 4 bed, 3 bath home there that rents for $2100 per month.

Most newbies with a good, full-time job and a great VA loan could certainly do well with an SFR in the south end of the valley that could rent as a duplex. If you can, live in the basement and rent out most of the home. With the right place, you could get nearly $2000 per month and almost cover a $350K mortgage. SFRs with a basement apartment are fairly easy to find or create, and very easy to sell.

If you've got some handyman skills and bought a Fixer-upper "duplex" home, you might be able to create some equity pretty quick and pull a HELOC within 6 months or so and use that as a down-payment on another rental.

That's my 2 cents. Have fun out there!

Eric Gardiner · Answer

@Keith Sestak All of those options are great but I agree that you should use the VA loan first while you can. House hack anything at this point and then down the road spread out to more complicated investing.

Jeremy Taggart · Answer

@Keith Sestak I would definitely utilize your VA loan and ideally house hack a 3-4 unit if that is possible for you. Idk how well your current market is for cash flow but I wouldn't buy there just because it is in your backyard if the numbers don't make sense.  Only certain areas make sense to build so that can be tricky, especially for a beginner. I would focus on multi units either in your backyard if the numbers make sense or find a trustworthy team in a good cash flow market somewhere else with better numbers.

Jonathan Mueller · Answer

@Keith Sestak Hey I am an investor and a realtor in Park City, let me give you a little insight on option #4. Buying a condo in Park City and doing nightly rentals. I love living here in Park City, there is never a shortage of things to do here, not only in the winter but we are also becoming a great summer destination! Biking and golfing are driving a lot of our summer business. Right now you can buy a 3/2 condo 1350/sq ft for $450,000. Average rent in the winter is $300/night, summer rates average $200/night, and I would say off season you are looking at $150 night average.  At these rates, you can keep the home pretty well booked. HOA dues are $539/month...which is really good for all the amenities they provide! I would say most months you are averaging 20 days rented. Again these are all rough figures. Below I put a link to the listing if you would like to look at details.

3 Bed Park City Condo for Sale

Dont forget the discussion of self management vs. professional management. Many companies charge 20-50% for managing nightly rentals. IF you get systems in place, I have seen many people successfully self manage from out of state.

Hadar Orkibi · Answer

HI @Keith Sestak I'm arriving to SLC on the Friday 2nd of March around 3pm.

Will PM you my contact details.

Keith Sestak · Answer

@Hadar Orkibi, I would enjoy getting together for a chat. I am traveling in early March, but perhaps our schedules will work out.

Hadar Orkibi · Answer

Hey @Keith Sestak you live in one of the best growing markets in the country.

There many opportunities there, you just need to dig deep.

I'm visiting Salt Lake City early March for about 5 days.

Happy to catch up for a chat....

Cheers H.

CASH FLOW - Where to invest if you were to start all over?

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