Introduction for potential House Hacker in Nothern Utah.

[Jake Davies]

Hello everyone my name is Jake Davies. I am 21 years old and am going to purchase my first home in this upcoming year or less. My wife and I have both agreed that purchasing a 4-plex would work great for us. We have only a family of 3, we had our first child in June of this year. I have always wanted to be an entrepreneur and one point co owned an entertainment company with a friend for 3 years. The market in Northern Ut is a little over priced i would say compared to what i hear on here for Multi family houses. I plan to use the first time home buyer program and maybe the 203k program. I would like to purchase in SLC which is closer to my job, but the market is cheaper in Ogden which is where I live now. I am looking for any advice, tips, or welcoming. Any leads for resources would also be highly appreciated. I am so glad that i have found this community! 

[Holden Latimer]

@Jake Davies

It is awesome that you are starting out at such a young age. While I am not really that old (27), I wish I had gotten started as early as you plan to. 

I am currently house hacking my first property which is a multifamily 4-plex in Salt Lake City. My wife and I purchased the property almost a year ago and have had an overall positive experience. As primarily a buy and hold investor, I plan to hold this property for the foreseeable future.

Going into the process I really planned on adding value to the property through renovations. We completely turned 2 units right away and made some improvements to the other 2 unit interiors. We also put in a new fence, new windows, etc. To save on costs, I learned as much as I could and we did most of the work ourselves. Apart from the value we added via renovations, I believe we bought some rent lag (meaning rents were below market at time of purchase) going in.

Since we acquired the property we have raised total rent by just over 20% and conservatively, after our recent refi of the mortgage, will be cash flowing well over $1000/month. Remember though that we put in quite a bit of capital apart from the down payment in order to add value to the property.

The two remaining tenants we inherited are leaving after this month and we will be doing some additional renovations and rent increases in order to stabilize the property.

While our result have been pretty awesome compared to my going in projections, it was no easy road. 

Qualifying for a mortgage isn't exactly easy because we are a unique type of buyers. It helps that most lenders will allow you to use 75% of in-place rents towards qualifying. Look into doing an FHA loan which only requires a down payment of 3.5%.

DYI renovations while cost effective will likely slow you down and with some projects will likely cost you more. Time is money so don't drag a renovation out too long if you are losing rent for long periods of time. Unfortunately I didn't have the luxury of contracting most of the work, but I would suggest it if you have little to no experience with renovating a property. The hardest thing I have found so far is finding a reliable contractor that doesn't charge you an arm and a leg for their services.

Price required that we buy in a less desirable neighborhood. We bought in Rose Park which is avoided by many investors. Parts of Ogden also seem to have a poor reputation. These areas are in most cases avoided for good reason @Douglas Larson, but if you have a good strategy and understand market rents, you should be able to be successful in certain pockets.

Sorry, this post went way longer than I intended. I wish you luck in finding an opportunity that works for your situation. Let me know if you have any questions or want to bounce ideas off of someone who has been in a similar situation. Best of luck in whatever opportunities come your way!