All Forum Posts by: Alex DeBirk

Great help everybody, thanks.

Things are flying over my head though. I've seen Cap rates and CapX (Cap ex?) on the property analysis tools here on BP. Can someone explain them to me? And is PTR paid to rent ratio? As in 0.7% is the amount of rent received to price paid to acquire the property? I've seen a 2% rule here on BP but I don't think that works in Utah. No way you can get a $100,000 property to rent for $2000 along the Wasatch Front. I think I'm pushing it with my Provo townhouse rental at $900 for a $130,000 property.

I understand that I need to get deeper on numbers if I'm serious about a property. The reason for posting my calculation above is a realtor I'm working with sent me about 100 MLS listings of multi-family units. I needed a way to very quickly see if anything was worth getting serious about and wanted to see what folks here thought of my method.

@Jordy Clark, this property is actually near the airport. Neighborhood seems decent, though. I'm going to go look at it tomorrow.

I am also considering a quad-plex that produces $3800/month, asking $390,000 in a seedy but close-to-good-stuff American Fork area. Half-rented and yard needs a complete make-over. Current tenants look like the kind attracted to a something on the slummier side, and the exterior of the property suits that. Haven't seen the inside. It's close to the 1% rule, so this sounds like it could be a deal. Thoughts?

Curt, Adam, thanks for the advice, I think you're right. What do you think of my analysis method?

And following your advice, I have looked at a lot of properties (not giving up!), and this seems to be a very typical ratio in the Salt Lake area at the moment. I've seen a ton of properties offer a ratio that is similar to a total income of $1400-$1800/month income for properties listed in the $200K-$260K range.

Anyone in the SLC market area able to provide some insight? Are things just wonky right now? A better way to locate these things? Am I just learning by experience about the preview 100 to find 10 to offer on to get 3 rule of thumb?

Thanks.

Hey everyone,

Thanks in advance for reading.

I'm new at this whole thing so I want to make sure I'm analyzing things all right. Please let me know what you think of the deal!

I am looking at a buy & hold duplex turn-key deal in the Salt Lake City Utah area (trying to put as many trigger words as I can in there ;-). The listing is for $259K and rents for $1800/month. I only know the property tax, so I opted for the 50% rule to see if it's one I want to look into further. Thus:

$1800 less $900 for taxes, insurance, utilities, maintenance/repairs, management, private money lending fees (?) etc.

I am guessing a cash flow of $200. Thus, I have $700 left for the mortgage. Assuming conventional loan with 4% interest amortized over 30 years and 20% downpayment, I get a mortgage balance of $146,622.87. Dividing by 0.8 gets me my offer of $183,278. My down payment plus assumed 10% closing costs puts my out-of-pocket at $54,983.58. The ROI is then only 4.36%. Pathetic!

Goal seeking the ROI in Excel to 8% gives me an offer of $154,800 and all in costs at $46,441.16. Zillow puts the Zestimate of non-rental units surrounding this one around $170K, although recent nearby similar sq. ft sales have been in the 240K range....

So basically even if I offer $100 less than they want, it's only a barely acceptable deal for me. Did I get that right?

Who in the world would accept that kind of offer? Any advice on how to approach the seller to increase my odds of picking this up when you know nothing about the seller? It's in a decent area and needs no repairs, turn-key, so it would be a nice headache free property to get my feet wet with. DOM is 79 days, so they may be getting more and more motivated.

Thanks!

Thanks for the welcome, @Travis Fisher, @Dmitry Fomichenko, @Jeffrey Breglio, @Dan Dixon.

@Dan Dixon, I'd love to meet. I know it's taboo to work with multiple agents, though, so as an FYI, I am currently working with an investing agent with Century 21 in SLC, but so far they are only sending me multifamily properties. I need something I can wholesale and flip in order to fund any multifamily properties I do want to get. If there's a way we can still work together and not step on any toes, let's do it.

@Jeffrey Breglio, thanks for the advice. I planned to go to the July REIA meeting in Utah County but couldn't leave work in time that night. I'll be there in August for sure. I saw your website from the REIA's website though, and have been planning to reach out to you. I have a four-plex under contract that I may need to close on and get rental contracts, etc put together.

To answer your question, @Travis Fisher, I bought my rental right after the market crashed at the end of 2008 to be my residence while I finished at BYU. I was flush with cash at the time and I didn't want to rent. I started renting it out when I moved to Berkeley to do my graduate degree in 2011. I've never had a vacant month yet, but I barely make anything on it, so a definite goal in RE Investing is to pay that down and get some real cash flow out of it.

I found out about BP because I wanted reviews on the Flipping Formula RE Seminar. BP folks advised against it, but I did it anyway and was glad I did.

Hello! I am a new investor in Orem, Utah. Very excited about the great people and information on this site. I am interested in buy & hold, wholesaling, flipping, though I am of course open to other methods (are mobile homes different from regular buy & hold?). I already own a rental in Provo, and I am familiar and interested in Utah, Salt Lake, and Davis Counties.