Single Mom in Moab, Utah looking to invest/buy a home

[Kimberly Kelly]

Hello, 

I appreciate you taking time to read this as this is my first post. 

I am 29, have been exploring investing for over a year now. I have read 5 books, been pouring over podcasts, talking with friends, and just recently started thinking seriously about investing in property. My hometown, Moab, UT, is really expensive, but it doesn't deter me from taking the risk and staying close to family and my daughter's father. I have my 10-year-old daughter part time.  I am looking to put my savings to work for me and hoping to move out of my 2020 fifth wheel into something that will appreciate over time. She is quickly becoming a teenager and we need our own rooms to accommodate her independence. 

I have $120k in savings. I wait tables 6 days a week and am listening to bigger pockets day in and day out and dreaming of passive income. I am aware that this isn't a place to mix emotions with business, which is easier said than done.  I am trying to keep my options open and stay creative. 

I am currently being pre-approved for a first time home buyers mortgage (not sure on fixed or not), and I imagine I would need roommates for income cushion if I move into a place. It looks like my monthly bills may be closer to $2300/month with utilities. The price range I am hoping for is a fixer upper at the $460k mark or less. 

I have a potential business partner who sells real estate and may have a deal. He thinks we could turn it into an LLC and create a rental (ADU?) above the carport once it is turned into a Garage. I think he would get the profits from that nightly rental as he would be the one to remodel it. And I would be the one living in the house, hopefully with a trustworthy roommate as I have a child.

He also briefly mentioned that we may be able to create another rental in the backyard which would be great money wise, but maybe a bit chaotic. I would also be the one responsible for the mortgage so I'm nervous about partnering up and would honestly prefer to do it myself. Or if the partnership had somewhat equal terms and risk. He is the one bringing in the deal so I want to respect that.

I have had 3 other friends offer to go in on deals with me whether that is flipping a house, building on raw land, or being a private investor to me with a low interest rate. The latter seems to be more of an entanglement- so I would probably want to flip a property if I go in on the private investor. 

Once I do buy a place, I plan to sell my fifth wheel (hopefully in the $60-$75k area) and probably hold onto that money for emergencies. Or at least half of it. These are my thoughts. I am passionate about a better life. 

Really hoping this sparks a conversation. 

Thank you. 

[Drew Whitehead]

Hey Kimberly!

Welcome to BP! I love Moab and we go there several times a year. I've always been wanting to get a property there to go to but you're right, prices have gotten so high it's really hard to make it cash flow. 

In this market, I have only been able to find deals off market. I've seen some wholesale deals come that aren't terrible but if you really want a deal, I would look off market. By this I mean driving for dollars and seeking out properties that are in disrepair or that have great potential for an ADU or up/down duplex or something else.

With just the two of you, you could really find and house hack a duplex or triplex and not have to really pay anything. I don't know what rental rates are in Moab but I imagine they mirror the real estate pricing? I also don't know how Moab city looks at ADU's but I'm guessing they may be more strict than other jurisdictions? Have you looked into that? I would definitely do your research there before going down that road. However, house hacking a small multi-family or converting a single family into two rentals may be the route to go.

My last suggestion would be to try and keep as much of your savings as you can. Moab could also be a great place for a short term rental and you can use your savings to furnish one of the units. With the tourism of Moab, you could probably make a lot more cash flow on a STR than a LTR. If it were me, that's what I would do. You may even be able to leverage a nicer property that will rent easier as a large, luxury STR. Just my two cents...