My first buy and hold in Utah and its a condo! $400 cash flow! (pics included!)

[Quintin Mortensen]

I moved into a condo in Salt Lake City, Utah in 2012. I didn't know anything about investing, all I knew is that I wanted to buy the cheapest place I would be happy living in so I could rent it out when I eventually move. 

I got my real estate license in early 2014 and kept an eye on other condo's in my community. One popped up on the MLS for $111k (3 bed 3 bath 1300 sq ft.) Others were going for $130k-$145k at the time so I thought this deal was too good to be true. I visited it and it definitely needed some work but all cosmetic and stuff (so I thought,) and I could do everything on my own. It was a HUD listing that basically means you bid on it and they take the bids every day and give you a yes, no, or counter over 24 hrs. So I thought to my self "I'll just throw a ridiculously low offer and just increase my bid a little everyday." So I throw out something like $92k to get started. The next day I get a counter for $93k and I'm shocked. I immediately take it and rush to the lender to get approved.

Everything goes relatively smoothly with the purchase and it's time to get started on the repairs. Our budget was $10k for everything. Fortunately we got out with only spending about $8k but we got very lucky and got deals on almost everything. (Thanks Amazon) 

The plan was to move out of our old place, rent it out, and move into this place. I know most people shy away from investing in condos but I'm on great terms with the HOA board and they run it very well. After this wonderful experience I plan on buying a few more units in this community.

For my first investment here are the numbers: (the old unit we moved out of)
Mortgage, tax & insurance $550 - PMI $80 (will fall off in 20 months) - HOA $145
Total is just under $800 and I'm renting it out for $1195 per month. 

Here are some before and after pictures. Keep in mind this is my first project, I am handy but Youtube answered most my questions.

Outside, end unit.

Old Kitchen, broken dishwasher.

Day 1 patching holes, taking off cabinet doors for painting.

Lovely surprise, rotted out floor under the leaky dishwasher.

Starting to come together. Paint looks kind of baby blue in the picture but its a light gray.

Loft painted, it was nice not to have to cover up the ground since we replaced the carpet.

Catsby picking out the carpet he likes.

Kitchen nearly finished. New lights, counter tops, painted cupboards, new floor.

The flooring makes everything look great!

Finished Loft, New carpet and lighting.

Bathroom, Ikea sink and faucet, new tile, lighting.

The plan is to live here for another year or two while my wife finishes up her pharmacy residency then off to wherever her job takes us (hopefully stay in Utah.) Thanks for looking. If you have any questions let me know. I'd be happy to answer them.

** Shameless request - My next project I need a contractor to finish a basement in a 1919 house. If you have any recommendations or leads let me know. I would like to do most of the stuff myself but I want the planning and framing done by a professional. 

** I would also love to team up for another project. I can manage any project you have and want to just get out there and get deals done!

Thanks, Quintin Mortensen

[Patrick Donovan]

That 400 dollars may look good but you have to include management fees to pay yourself for your time spent on the place like finding tenants, repairs, and so on which 10% is a good rule for that. Also for maintenence which should be at least another 5-10%, capital expenses which are another 10% , vacancy factor at 8 %. These are percentage off of your rent so take that 400 and subtract 120 for management, 95 for vacancy, and another 120 for capital expense and maintenence. And that is on the low end for the last two. So cash flow would technically be around 65. Even though you won't use this money every month, you will eventually need to replace the roof , water heater furnace ect. You need to account or this or it could set you back in the future