All Forum Posts by: Rebecca Belnap

Just the state approved REPC. One when you buy, one when you sell.

You are right, in South Jordan and nearby, it is very hard to come close to the 1% rule. @Sam Levin , @Amy Kendall, and @Jacob Cogswell are right, you will get much closer with multi-units. Sam mentioned some off MLS new construction 4plexes in the Ranches par of Eagle Mountain that I've looked at. Gross Rents are $5480 and the purchase price is $625,000. Not a 1% rule purchase, but with new construction and a builder's warranty you should still cash flow nicely. I worked out numbers on it for owner occupying with a 3.5% down FHA loan, where even if you pay full price and pay a property management company once you move out and have it fully rented it still cash flows $533 per month. That includes an hoa, property management, everything.

The cost of your repairs really depends a lot more on who your tenant is than the age of the property.  A bad tenant can trash a brand new house and cause $10,000+ in damage.  I've had a tenant who have apologized for bothering me and asked that if I buy the new toilet, he would install it himself at no charge. (he was a contractor and wanted to know it was done right.)

Your business will go through problems no matter what paperwork you have, so don't worry about it too much.

You weren't specific about which type of paperwork you are asking about or which type of business you plan to do, so here are a few ideas:

1. State approved REPC.  That is short for Real Estate Purchase Contract.  I always use the state approved one since ours is good and it doesn't look like I'm trying to pull a fast one with small print.

2. Do you want to set up an LLC? Again, this is something the state will give you the proper forms for, or a lawyer can help you with it for a fee. You only need this after you have at least one property unless you are using a Hard money lender that only lends to companies. That is for their regulations, not to benefit you. If you are using any conventional lending they will only lend to you in the beginning and not your company.

To begin with, don't worry about LLCs and Scorps; just find a deal that cash flows or you can flip and worry about the company structure when it exists.  Too many people don't act because they think they have to do all the busy work first.  Just find a deal.

I know of some off mls new construction that they are breaking ground on soon in Pleasant Grove, Eagle Mountain and Riverton. Cap rates around 7.5. I believe the Eagle Mountain 4plexes have garages and 1800 sqft per unit. Purchase price is just under the FHA cap so if someone want to house hack they can get in for 3.5% down.

ksl is the most searched local source.  It sends you to rentler which is free to list and also has a background check you can use if you like it.  

Welcome to bigger pockets.  There are a lot of meetup groups with bigger pockets members and most are very kind and helpful.  You will find investors at all levels and I think I learn as much from the new ones as I do from the pros.  What are your real estate goals for 2017?  Best place to start is to figure out where you want to go.

KSL has always given me plenty of leads.  I manage my own rentals and have had good tenants for the most part.  Be sure to call on the references and Rentler (KSL sends them there) has a way to do credit checks.  If their credit is good and the previous landlord checks them out, then you should be fine.

@Caleb Rigby That is a wonderful thing to have happen.  There is nothing like going to the property to know what the situation really is.  Now you have a chance to run the numbers, get bids and see if the numbers do work.  Best of luck on your decision.

Welcome to bigger pockets.  A lot depends on what your situation is.  If you don't own your own home yet, that is the easiest way to start, but it works best if you can buy it right.  Give us more details and most of us will happily share our successes and failures with you.

I recently went to a continuing education class that was likely presented by the same people  

@Sam Levin saw.  He is in no way saying that you can do it without a trained tax professional.  It is more of a way to let people know that there are better ways to claim your depreciation earlier when you need it most.  

Even after the class, I have no idea if the carpet is a 5 year or a 7 year asset, but I do know that if done properly (not by me) I can fully depreciate it in a lot less than 27.5 years, and if my tenant trashes it, I can expense the remaining value of the carpet, replace it and start depreciating the new carpet.  This is true of light fixtures, countertops, cabinets, and the bushes in the landscaping, but only if you have a full inventory of all the assets in the property.  It isn't to tell us how to do it, but to know what a trained professional can do to help us be more profitable.  It's very hard to cash flow a property in the early years and this helps if you are in the higher tax bracket.