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All Forum Posts by: Chase Leavitt

Chase Leavitt has started 6 posts and replied 35 times.

Post: How to be an expert on outside markets!?!?

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

I will be training a group of 15-20 very wealthy individuals who will be looking to put their money into real estate. The topic is "How to be an expert on outside markets and find comfort investing outside of your backyard". I would love to get your thoughts and feedback on this topic! Here's are my quick thoughts:

- Know the numbers! (rents, all expenses, cap rate, cash flow, vacancy, etc.)

- Call local management companies 

- Call different apartment complexes that are for rent to get details on location, rents, etc. It's amazing how much great information they will give you on that area.

Post: Would you rather buy a SFR, Duplex, Quad or 10+ unit....Why?

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

Multi-units all day to help off set any potential vacancy. Numbers change more drastically with vacancy for SFR versus multi-units. In the locations I have a microscope on the Utah (Salt Lake/Utah County) markets and with the numbers, (cap rate and cash flow), that I've penciled they look a lot better with multi-unit. I'm assuming other areas might be the same but not positive. I love 2-4 units, new construction if you can find the right deal and/or have the right builder connections. And the financing terms are great with 1-4 units.

Post: Own two paid for homes, selling one when I retire, how to invest?

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

@Susie Lowe Great questions. My situation may be a bit different than most. I represent a builder, Volcommon, that builds off market brand new multi-units. Basically, we target high employment with low vacancy areas, and find pieces of ground in those locations that make sense from a numbers perspective (cap rate and cash flow). We tie up that piece of ground and then we will pre-sell that entire project to our investors. So I'm a little bit bias with your question and would say new construction all day long. I'm sure there are great existing duplex/investment options as well but I've found them in new construction. Personally, I don't like the idea renovating an existing duplex or 4-plex. A lot of times when you rehab or put money into a unit your numbers (cap rate) will change drastically. I've love my new units in the fact they are low maintenance with very few (if any) problems. I enjoy what I do, family, life, therefore, my time is too valuable to be doing a renovation and quite honest I just don't have the passion to do that like some do. Also, the newer multi-units I have are usually worth much more than what I'm buying them for because I'm coming in at an early stage in the game. It's not uncommon for our investors to purchase a multiunit with 50-100k of instant equity. That's why renovating something existing just isn't that exciting to me. Now the disadvantages of new construction; 

1. You may be required to take on a construction loan depending on the builder and what their set up is. 

2. You are having to wait 9-12 months for it to be completed, therefore, you won't have any rental income during the build period. 

3. The numbers you purchase from are a proforma and they aren't actually numbers, they are projections. (With the right due diligence and know how you can help to eliminate this concern.) 

I think there's opportunities in both but I've found mine in new construction. Here are a couple of key indicators I would look for; location, low vacancy, low maintenance, solid cap rate (A true cap rate with ALL expenses and true rents), cash flow. With the right due diligence the numbers will help you sift through which investment properties are better than other ones. Feel free to reach out to me directly with any further questions! Happy hunting :)  

Post: Own two paid for homes, selling one when I retire, how to invest?

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

Thanks @Craig Libby!! Besides Utah I'm really liking the Houston and Dallas, TX area, Meridian ID. and Phoenix locations. I'm sure there are many other great locations but the ones I've mentioned are actually ones where I've researched and seen deals that still make sense. Yes, I would love to keep int touch. Best of luck in your efforts! It's fun and exciting 

Post: Own two paid for homes, selling one when I retire, how to invest?

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

Thanks @Craig Libby!! Besides Utah I'm really liking the Houston and Dallas, TX area, Meridian ID. and Phoenix locations. I'm sure there are many other great locations but the ones I've mentioned are actually ones where I've researched and seen deals that still make sense. Yes, I would love to keep int touch. Best of luck in your efforts! It's fun and exciting 

Post: Own two paid for homes, selling one when I retire, how to invest?

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

My wife and I bought a home in Pleasant Grove in 2012 for 150k on .67 of an acre. We ended up subdividing that extra land into to lots and made 100k profit just from the extra land. After living in the home for two years we had the home paid off. We came across a new construction mulit-unit opportunity, ended up selling our home and extra land for a profit of (275k) and rolled that into one 4-plex and a duplex in Vineyard Utah. Taking that money and buying a solid mulit-unit with solid returns was the best move we've made in our early investment careers. We've had that 4-plex for two years now, bought it new for 600k and now it's worth 860k and cash flows $2,000 a month after ALL expenses, (including property management, taxes, insurance, etc.) We sold that duplex for 100k higher than what we bought that for and rolled that into another 4-plex in Eagle Mountain, UT. Bought that 4-plex for 650k in which it's worth 850k and we cash flow $1,500 a month on that property. 

I don't want this to come off as bragging but my point is I agree 100% with @Greg H.. Selling your personal residence tax free and roll that into something else with better cash flow. I would highly recommend a multifamily. I'm not seeing the same deals on the properties I mentioned above but I am still seeing great options that cash flow ($700-$1,000) and have very good equity play. We just closed on a duplex in Herriman and are closing on another duplex in Magna, UT in August. All new construction. 

Just think if we would have kept that Pleasant Grove home we bought for $150k it would be worth 200-210k but instead we have two 4-plexes that cash flow awesome and we are sitting on 350-400k of equity for EACH property. (750k of equity instead of 60k is huge for us, especially when starting out). 

Post: Multi or single for out-of-state investing?

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

Multifamily for the simply reason that 1-2 months of vacancy with a SFH can destroy your cap rate/cash flow where with multifamily you would have multiple doors/revenue streams to help offset that in that situation.

Post: Our first duplex in Provo, UT!

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

Congrats on the new property!! I love the exterior colors!

Post: UTAH NEW CONSTRUCTION 4-PLEX 6.6% CAP WITH $700+ CASH FLOW

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

SALT LAKE COUNTY

With land prices rising throughout the Wasatch Front, development continues to go westward. With the establishment of the Inland Port Authority, the Northwest quadrant of Salt Lake County is poised for growth. Amazon.com and UPS are both near completion on massive regional facilities, projected to bring in 3,000 new jobs between the two of them. All this combined with the expansion of the Salt Lake City International Airport make this an area in need of housing. According to CoStar, "only one project has delivered in this portion of the valley since 2015 and vacancies continue to be well below the metro average. With nothing currently underway, tight conditions look set to persist in the near term."

Multifamily in Salt Lake County realized rent growth of 5.8% over the last year, in part due to the increase in population from immigration sparked by strong job growth. Many renters are coming to Salt Lake from other major markets where rental rates are much higher. Apartments in Salt Lake county are a bargain compared to other markets and these renters are helping to raise the bar on pricing expectations.

Vacancy increased 90 bps over 2017 to 4.0%. A slight uptick in vacancy was realized mid-year, and vacancy has continued to increase. Many of the new properties have generated renter movement to new units.

Increasing migration to Utah fueled by consistent job growth will continue to keep vacancy rates across the Salt Lake valley at indus- try-standard levels. The bulk of new development is located in Salt Lake County with a total of 8,034 units under construction. Salt Lake County houses a little over 53% of all active and planned construction. This influx of new units will increase the base inventory approx- imately 5.7% over last year. Many of these units have already been delivered with initial project phases. Supply levels may create some slowing in rent growth and absorption velocity, however, the current new supply is being absorbed at a very healthy pace of 17 units per month. 

Post: In search of yield in SLC

Chase Leavitt
Pro Member
Posted
  • Real Estate Agent / Real Estate Investor
  • Orem, UT
  • Posts 41
  • Votes 17

@Jim D.  I've purchased several fourplexes and duplexes in Utah and Salt Lake County within the past couple years. Cap rates range from a 6.8-7.8% and all of them will cash flow. They are new construction so it would require a 9-12 month build period with 25-30% upfront but once they are complete they are awesome and very low maintenance. I have a close eye on the residential investment market here in Utah and I haven't seen anything better. Yes they are all off market deals. Send me a private message if you want any details!