salt lake are/no multi unit cash flow! True?

Question

I am ready ready to start in real estate. Cannot find a multi unit property that cash flows, none of them make sense here! People are paying stupid money for the multi units here. I’m thinking of buying, house hacking a residential house that has a basement; turning that basement into an apartment to do air bnb for ski season, renting upstairs to a permanent resident. We are 30 minutes from seriously the best ski resorts in the US  (and best powder)Any thoughts about this?

Emma Powell · Answer

I do occasionally see deals on MF in Salt Lake/Utah counties and bought some, but the last one I found that I got excited about was over 100 units and had too big a capital raise for me to take on. Mostly I have been networking with other investors who have found large MF deals that have fallen through for some reason and seeing if I can solve the issue, and found some others from a wholesaler and networking online with people in Idaho. I found one 50-unit in SE Idaho we are closing on, and several others in SLC that were good deals, but for various reasons I was not able to get under contract (usually the capital raise, I struggle with that). Keep looking, but also be open to some other markets where you might find an easier entry.

David Li · Answer

@Bradley Penrod I saw a sfh for 385k that has a mother in law and a Separate entrance. If u use fha loan is only 3.5% down. Also there’s a few older duplex that’s 285k in west valley and the owner did some improvement on one side u can look into those as well

Aaron Knoll · Answer

You can still find deals on multi properties if you're patient but they are few and far between. It's an even bigger problem for SFH's and anything on the MLS. Another issue: most of the multi-units I could see buying in SLC would not be the best for ski season rentals. Some towns like Sandy have ordinances restricting AirBnb.

Bradley Penrod · Answer

financial goals:

1) build a portfolio of several properties to eventually trade up from the appreciation earned from those properties

2) learn about being a landlord

3) learn about renovation

thanks for replying

Michael De Rosa · Answer

Your observation is correct. There is a lot of cap rate compression in our market and it can be difficult to find a property that cash flows unless you are putting down a larger down payment. There are deals out there but you have to be more creative if you want to stay in the Salt Lake area. Renting out a SFR as 2 units could give you more cash flow but you do not see the appreciation in the building you would normally see in a fully permitted multiplex, especially if you end up putting in capital to remodel the building. There are also more headaches like utilities, parking, and neighbors that you have to consider.

What are your financial goals with the property you plan to buy?

salt lake are/no multi unit cash flow! True?

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