All Forum Posts by: Greg Callan

@Cherie Orellana Thank you for the information and the connection with

@William Hochstedler

Hi. I know it has been some time since this post was initiated, but I was wondering if anyone could give some insight to a newbie regarding the housing market in northern Utah. I am in Logan and looking to purchase an investment property in which I will live in one unit. I have looked at several options but am struggling to find anything that comes out looking like a good deal. Is the timing just wrong to consider buying investment real-estate in Utah? After a brief estimation of expenses (50% rule) and mortgage, I always come out with a negative cashflow even if all units are rented.

@Matthew Paul - I like your other perspectives. It's something I often think about. Why has no one else jumped. In the case of this property, I actually learned about the property before it is on the market. The real-estate agent with whom I am working knows the owner and that it is being renovated. So technically, it is not on the market at this time. There are many 4 plexes near the one in this discussion, but no other 4 plexes for sale at this time. Another one that did sell a few weeks ago had a lower cap rate and sold within 2 days. However, I am guessing that buyer had a different strategy or maybe even multiple properties to play a different angle. Thanks for the suggestions. I am still researching it a bit as a way to continue learning about investment real-estate and I will present some data to the seller with an offer that would make it work for me, but I think it will have to be a pass on this one.

@Scott Bowles Thanks for the feedback on estimated expenses. 

@Scott Bowles - Thanks for the information. I am new to Utah (up in   Logan) so I do not know the market that well. Still want to learn more about how the market here works. So I am open to your suggestions and feedback.

I agree that it will be impossible to find anything bringing in 1%. 

I would be happy to have your opinion on a more realistic estimate of expenses. Here are my estimates, but I am happy to hear if you think some of them are inaccurate. Moreover, I could use some modeling of the questions that one might ask to determine if these numbers are too high or too low. I think the most flexibility could be with Cap-ex improvements, maintenance, and vacancy, but I could be wrong.

Management = 10% = $340 per month

Exterior work (lawn, snow) = $100 per month

Property taxes = $221 per month 

Insurance = (I need an actual quote) Let's say $125 per month

Cap-ex improvements = ??? I could use help, I've seen others list 5% here so 170$ per month? 

Vacancy at 5% = $170 per month

Maintenance = 1% of property value per year = $375 per month

Total = $1501 or 44% of the incoming rent.

Thanks all. I think that we have sufficiently addressed that the price is too high for this property and that this one is dead in the water unless the seller will come down about $100K. They will not, because someone in the community will purchase this property and quickly, but likely someone who has much much more to put down as a downpayment. I will let you know if the seller comes way down on the prices. 

@Todd Dexheimer  haha. I'll hold that check for now.

@Maurice D. - Thanks I had done some of those things, but I do like your perspective on "paying yourself" for management. I do not plan to manage the property myself, but that mentality would be really wise for someone whoo is planning to do that. I have a busy career and I do not want a lot of other things to address. Thus, I will be hiring out and need to plan for that. I realize that will eat into much of the potential earnings but less earnings that are passive are better than no earnings.  

@Todd Dexheimer - Thanks I agree with your assessment. While using tax benefits of the loss, yes, I would still save some money compared to renting / buying, but that seems like a dangerous wager to me given that the depreciation taxes will be recouped by the feds if I decide to sell and THAT could end up costing me way more than I ever actually made on the property.

@Sam B. Thanks for your feedback. To answer your question. I am not really considering this property anymore, not unless the price were to reduce drastically. I was more so asking for advice as to whether I was evaluating the property accurately because I was coming to the same conclusion that it would be such a great deal anymore. When first presented with the sellers' estimates of expenses, it was a much different story. I am a newbie so they might have thought they would slip one past me.

@Craig Sloan I like the 10 times rule. This one isn't going work for me unless the price drops drastically.