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Updated over 4 years ago, 05/14/2020
Utah Current Market: Rent As Is vs BRRRRs
I have analyzed 20-30 properties across Utah and Salt Lake Counties. I feel like I am analyzing these properties wrong, because I haven't been able to find anything with a decent ROI. I can find some cash flow in the properties but the ROI is so low. Is it better in the current market to be looking for BRRRRs rather than Rent-as properties? I would love some direction on how to do this better. As a note this is my first time in real estate investing, so this would be my first purchase.
For example this property, https://www.utahrealestate.com... I can only seem to get about 2-3 ROI with $100 cash flow. Is this accurate or am I up in the night? I only post this listed for example, not trying to push this or anything.
I would really like some direction with this. I would like to invest locally since i live in UT but I don't really know what to do. Any direction and help would be great.
Hi @David MIchelsen, have you watched the BiggerPockets webinar on How to Analyze Rental Properties? You can watch the archives with an upgraded membership, or wait for the next one (that one is a repeated webinar, I believe). I think that's a great place to start to see where you're having trouble. That being said, I know I analyze MANY, MANY properties before I find ones that work, so it could be that you need to just keep going.
Also, you could spend time in the Deal Analysis forum and see what you can glean.
@David MIchelsen
Yep, not much cash flow to be had along most parts of the Wasatch front. It's slowly disappeared like an endangered species. Now it's only to be found in outer lying areas such as Tooele, Ogden, and magna. If you're savvy, occasionally you'll find one in more simply located areas, but you usually are inheriting a mess with tenants and probably a rehab project.
I'm just getting involved in the education portion of BRRRR investing, focused in Salt Lake and Utah counties. With how insane the housing market is in Utah, I expect to have similar difficulties with finding deals. I plan to use the drive-thru neighborhoods technique to locate distressed properties and attempt to contact the owners to see if they're interested in selling. I'm a street cop, so driving neighborhoods is what I'm already doing, and I know Salt Lake neighborhoods pretty well, as a result. Maybe give this a try once you've found a good area to buy?
@Jacob Barker thanks for your service and for keeping us safe! I also live here and have looked around quite a bit. I haven't been able to make the numbers work here. There are some MF's in West Valley that may work -I'm surprised by the number of listings in Utah that state 'rented below market' and I mostly ignore that statement. I have some hesitancy looking in Utah County as I wonder if it will be overbuilt eventually. I think Park City may have some bargains this summer, but their long term rentals seem to be a steal and don't justify the cost.
I have a few properties in Memphis (bought a few more this month) and am educating myself on some other areas. I am looking for an area with more appreciation and less cash flow at this time but still need the numbers to make sense.
As I've had luck with my out of state properties, managers, etc. I am going to probably head out of state again although I'd like to invest locally...sigh...
Trying to decide where to invest next. It's a new problem as I am very comfortable with my Memphis team. I've been looking at Richmond, VA, Jax, FL (concerned about the job market there), Jackson MS, and the midwest. It's touch to narrow it down...
@Cj Powderhorn Thanks you for the info! I appreciate you taking the time! When you started investing, was it here locally? Or did you go out of state and learn the long distance game to start?
I'll be happy to message you my story.
@David MIchelsen I live in Park City and at the same stage as you. Nothing screams ‘good deal!!’ Anyway I’m not commenting because I can help, but I’d like to follow and read any other responses!
@Amy Nordeen Golf
Yeah I hear ya! I just went through 8 deals today and about 2% roi on all of them.
@Meredith Burt
Yes I have! I’ve watched a bunch of the webinars with Brandon and he usually goes through an analysis in each one of those presentations.
@David MIchelsen What are you doing for your downpayment? I have found doing BRRRR is the only way to really get a property that has a great ROI. I just helped a client buy a home in Lehi that he got a 10% ROI with very little work to get it rent ready. We jumped on it quickly because it was a divorce property being sold and needed a strong offer quickly. Deals are out there they just fast.
I stay away from condos because of the HOA and rental rates, There are so many institutional investors building condo complexes which make that market feel saturated. I like single-family. I also feel duplexes are overpriced for what the rent rates really are.
@Becca Summers
I'm using a HELOC as my down payment. I've been mostly looking at condos and townhouses and it's overwhelming at times cause there's so many and are very inflated.
I have found with the HOA it's really hard to get a property to cash flow. We're single-family your renters pay their own utilities so that saves you a lot of money. Townhome and condos you're competing with first-time buyers and it's a super competitive market.
