All Forum Posts by: Garrett Christensen

It could. It will depend on the numbers of your investment property. Lenders take 75% of your received rent towards your income. So if you have solid cash flow on this investment property, then it might not affect your rate down the line for your Primary. If your debt obligation is more than 75% of the rent then it will hurt your DTI and thus affect your rate.

Provo/Salt Lake is a solid option, I personally just bought a 7 unit myself. It’s a strong rental market, but is definitely more of an appreciation play than cash flow. Reach out directly if you’d like to go over the market in more detail with me.

Lehi is a solid market, but not for cash flow. Rent to Purchase ratios are around .5-.6%. Most investors out here rely on appreciation.

You've thought through a lot of good benefits to doing this. Make sure you look into your state's laws regarding managing someone else's rental. A lot of the time you need an active broker license. Sometimes close friends and family are an exception to this rule though. Here are my thoughts on each of your points.

1) Great reason, it's always good to help a friend even if it's never paid back

2) This isn't always valid, but I can't speak for your friendship obviously, I just know that it always gets difficult when money and stress are involved.

3) Great property management experience for self-managing your own properties which I think everyone is capable of doing.

4) Great reason, although it doesn't always happen. I've closed one deal in the last two years from a tenant and I have 11 doors.

5) Similar to #1

One more thing to consider is the liability if something were to happen to a tenant or the property while you're managing it. Make sure it's legal or else insurance has an easy out and your friend/you could be stuck with a big problem. Hope some of this helped, and good luck!

There are a few ways to do this. I just did a deal last year where I was in your shoes. I partnered with someone who paid for nearly all the renovation and the upfront cash. We bought the property with cash, about 70k from my partner, and 250k hard money. There were about 50k in reno costs. I did 95% of the work and we ended up splitting it 50/50, but we went through a few different scenarios. 

1) My hourly contribution would be how I gain equity. This is the logical way of doing it, but it's tough to determine the hourly rate and the value of renovation expertise. This option also doesn't motivate the contractor (you and I) to get things done fast and with a hard money loan that's not a good combo. 

2) Determined by the cashout refinance. Depending on how much cash we pulled out after refinancing that could be used to adjust equity amounts. This was just one more lever that could be used to try to make it more logically "fair".

Ultimately we went with 50/50 for a few reasons. One, the hourly contribution and financial contributions were close enough that it made sense. I ended up paying for some of the reno as well so that helped me because on paper I should have had less equity. The big reason was that both me and this partner wanted to do more deals together in the future and we didn't want to be nickel and diming each other forever. We realized that for a partnership to work out both of you need to be 110% invested in the project and it's much tougher to be fully invested when one has a much larger stake and essentially becomes "the boss"

Hope this helps.

Here's my disclaimer: I am not a tax professional, but I can give you some general information about possible deductions that could be available (NNN) situation.

1. Depreciation: This is likely the most significant deduction available for a landlord in a NNN lease situation. Depreciation allows you to recover the cost of the property over time by deducting a portion of the property's value each year.
2. Mortgage interest: If you have a mortgage on the property, you can typically deduct the interest paid on that mortgage.
3. Legal and professional fees: Fees related to the management of your rental property, such as those paid to attorneys, accountants, or other professionals, may be deductible.
4. Commissions: If you paid any commissions to brokers or agents for securing tenants or negotiating lease terms, you might be able to deduct these expenses.
5. Advertising: Costs associated with advertising your property for rent could be deductible.
6. Travel expenses: If you need to travel to manage your rental property, you might be able to deduct some or all of your travel expenses.
7. Home office expenses: If you use a portion of your home exclusively for managing your rental properties, you may be able to claim a home office deduction.
8. Insurance premiums: Although the tenant typically covers insurance in a NNN lease, if you have any additional insurance coverage related to your rental property, those premiums may be deductible.
9. Utilities and services: In some cases, the landlord may still be responsible for certain utilities or services, such as common area maintenance. If this is the case, those expenses could be deductible.

Hope this helps

Rentler is pretty good too. I would consider using Stessa for the bookkeeping side of things. Even the free version is great!

Get in touch with a really good agent who knows Real Estate Investing and invests themselves. If they are good they'll share their knowledge and will essentially be a personal coach to you. 

It will actually vary a decent amount when comparing south and north Utah County. Up by Lehi, you could probably get $2100-$2400 for that, down in Orem that'll probably be around $1900-2200. The rents and prices tend to get lower the further south you go.

My brokerage has a solid PM division. I'd be happy to put you in touch with her if you'd like. Message me directly.