All Forum Posts by: Account Closed

@Jaiden Olsen I think that's a great point you brought up about return on equity. I have the same problem well not really a problem but I have the same issue with the homes I own. What would you recommend moving into to up my return on equity. For example I've got a home in Sandy that's worth $410,000 in my monthly rent is 1,950. The thing to keep in mind is most of that equity was free money from appreciation over the last 10 years so it's not a d thing but maybe time to make a move?

Mike,

Your story sound similar to mine. I was an engineer with 3 kids and I used a HELOC from my home as a down payment for a rental, fixed it, learned how to landlord, rinsed repeated. I worked on my rentals after work and on weekends then just waited for the process to evolve over 20 years. This allowed me to quit my job at 45 and have 13 paid off homes in the Salt Lake Valley and now I just kindof goof off :-), I'm 54 now. You are on the right track by being wary of debt and being conservative. If you want to meet I can give you some of my tricks and tips. The big thing for you is to start right and then hang in there when the going gets rough (which it will!).

Real estate investment is  stinky, dangerous, frustrating and a scary thing to do.  Its not glamorous, you are going to have to learn to talk to renters and understand a different socio-economic world than your own.   And guess what, contrary to popular belief there is not a "team" that is going to do this for you. That BS. You are alone dude!  You have to learn to do math correctly, read people correctly and fix your homes on your own most of the time.  

Also, (even though I'm a realtor, I got my license just for kicks an giggles), and with apologies to my realtors friends, realtors are almost 100% useless in helping you be a real estate investor. In fact, most of them will guide you to ruin with their ignorance to purchase a home that is wrong for you. They don't understand what you are doing and don't know how to help you. They don't think well financially and 80% of them are broke and the good ones are completely engrossed in customer relationships and networking most of which is not that useful to you as an owner of rental homes. In 20 years as an investor in Utah I have only found one realtor that even understood what owning rental property is all about. No realtor has ever found me a home that was right for a buy and hold property. I found them all myself on the MLS, HUD repossession, through wholesalers etc.

To find a cash flow home you are going to have to invest in the bad part of town and landlord some pretty rough people for some years until you figure it out.  I would be happy to sit down and give my tricks and tips and even evaluate a deal (I help people all the time, for FREE, just because its fun for me to talk about real estate and I always learns something).  I'm located in Sandy.

And be careful of multifamily 4 plexes.  The renters move out more frequently, you are going to have more tenant conflict as well as tenants that are poorer and less able to pay rent on time and the 4 plexes don't appreciate as well as single family homes.  Save multifamily until you get some practice. Its probably best for you to get a single family home close to you in your county that cash flows.

Regards,

Darren

Grant,

Good question. Its really about improving cash flow.  I feel house  appreciation is going to stall for a 5-10 years so my real estate is only going to deliver rent cash flow and probably not the appreciation cash flow we have seen last 12 years.  So if I have a $250,000 house that give me $1,500 a month ($18,000 per year) that is a gross Rate of Return of 18/250 = %7.2.  That is pretty lame. 

One of my business that I bought for $100,000 5 years ago gives me a NET (not gross) profit of $100,000 per year!  So I could easily trade a home (7% return) for a business (100% return).  Now granted in 10 years most businesses are worthless or are out of business and most homes are worth more but in the meantime those businesses can throw off huge piles of juicy cash.

And I have tons of time on my hand because my other business all have managers in place. I'm just trying to get a win-win where the failing business or tired business owner can trade for some low stress and high value real estate and then I clean up their business and get the higher cash flow.  Also, I'm tired of rehabbing and finding value homes, it has become boring and stinky to me.  I mean, honestly how much cat piss smell can one person stand in a lifetime!!

Regards,

Darren

After 20 years a a landlord in Salt Lake City, Utah here are my observations about section 8.  I rent 4-5 bed homes not apartments.  90% of my bad tenant, nightmare stories over the years have been with section 8.  I'm a slow learner so it took me 10 years to get the memo that it is a bad idea.  Duh!

1.  Most of renters are mothers with several children who have no jobs and the husbands or boyfriends are in jail for drug dealing or for beating up the children's mothers. 100% of my section 8 tenants used illegal drugs.

2.  When the husbands or boyfriends get out of jail they move back into the home and beat up the women and start dealing drugs again.

3. Utah Housing Section 8 pays lower rents, are slow to deal with, and do not guarantee rent and do not fix broken homes after the tenant has moved out.

4.  I did have the section 8 office cut aid to a tenant 2 weeks after they moved into a home because the tenants were committing housing fraud.  I immediately had the worst eviction of my life.  Another of my section 8 tenants' 15 year old son murdered another boy with a pistol.

5.  So if you enjoy drug dealing, wife beating criminals in your units, then section 8 is the way to go!  With this market in Utah there is simple no reason to rent to a section 8 tenant.

Just my 2 cents.

Darren

Hi people,

I have thirteen 4-5 bedroom rental homes in the Salt Lake County area that I would like to trade for you small business.   All these 13 homes are close to Salt Lake City and are paid off and have average rents of $1,500 a month.  They are mostly located in West Jordan, Midvale, Magna, West Valley City, Glendale, and Kearns, Utah.  I have bought small businesses this way and it is a good way for the business owners to cash out.  I'm especially interested in businesses that need a "tune up".  Currently I own and operate the Sandy Nickelcade and a Laundromat in West Jordan both of which I bought and then "fixed up".

Let me know!  Lets do a deal. Even if your business is not worth what a home is worth let me know an maybe we can do a seller finance on the home using your business as a down payment.  This is a good way to create a win win situation with minimal financing cost or transactions costs.

Darren Larsen - Sandy, Utah

I'm looking to maximize my return on money. My homes are worth about 3 million. I'm getting around 5-6% return by using that assett value as monthly income. If I have a business I could probably get 20% ROI. If I sell and put into a money market I get around 1%. Alot of multifamily gets 6-7 percent if your lucky but then I have to borrow money at 6% to get that return so thats why I'm looking at trading out to a business. Its all bout dem numbas!

I'm looking to maximize my return on money. My homes are worth about 3 million. I'm getting around 5-6% return by using that assett value as monthly income. If I have a business I could probably get 20% ROI. If I sell and put into a money market I get around 1%. Alot of multifamily gets 6-7 percent if your lucky but then I have to borrow money at 6% to get that return so thats why I'm looking at trading out to a business. Its all bout dem numbas!

Hi,

I've been an investor and landlord in Utah for over 20 years. I have 10 homes paid off but now am not getting the return that I think is juicy enough. I have experience running small businesses and I am offering some of my rentals for exchange of business. Has anyone done this before and what was your experience? I did recently trade a laundromat I owned in West Jordan for a house in East Sandy and it worked out pretty good. The value for the business and house was around 350K and the business generated $60K/annually vs. the $20K/annually I get from the rental home. I am glad to get rid of laundromat but I see that my cash flow reduced quite a bit. The homes I'm looking at trading are all on the west side of Salt Lake County and most are 4-5 bedrooms single family rented at market rates of around $1,500. Any thoughts.

Hi,

I've been an investor and landlord in Utah for over 20 years.  I have 10 homes paid off but now am not getting the return that I think is juicy enough.  I have experience running small businesses and I am offering some of my rentals for exchange of business.  Has anyone done this before and what was your experience?  I did recently trade a laundromat I owned in West Jordan for a house in East Sandy and it worked out pretty good.  The value for the business and house was around 350K and the business generated $60K/annually vs. the $20K/annually I get from the rental home.  I am glad to get rid of laundromat but I see that my cash flow reduced quite a bit.  The homes I'm looking at trading are all on the west side of Salt Lake County and most are 4-5 bedrooms single family rented at market rates of around $1,500.  Any thoughts.