All Forum Posts by: Holden Latimer

@Zach Coverston We basically did new black appliances, laminate flooring, new paint, new carpet in living areas, new doors and hardware, etc. Pretty much touched everything. I think $850 is achievable, but to minimize vacancy going forward, I think $800-$825 is the sweet spot for that area. How long have you had your properties? What are your current rents? Awesome to meet others who own rentals in the same neighborhood 

@Ryan Anderson Congrats on the new purchases! I still own the 4 plex in Rose park and stabilized the property about a year ago. After renovations our average rents are at about $825/unit which has been a nice bump from our starting rents of $679/unit. We have been through a handful of contractors on this and other projects, but haven't quite found a go to guy.

Do you own other deals in or around Salt Lake City? I would love to connect as well. Always looking to form relationships with like minded real estate investors. 

I self manage currently by the way.

@Nick Brubaker

Glad to hear you guys found a location to settle down. Hopefully one day I can make a trip out to your market. Hit me up if you would like any help analyzing a deal!

@Josh Nicolson

Thank you for your response. We ended up structuring the deal within an LLC. Closed last month and are very excited about the future. Great sign that we went under contract at a price just over $242K and our initial appraisal came back at $280K. Better yet, we received and appraisal update which came back at $290K!!

@Nick Brubaker Friday during lunch or dinner would work well for me. Somewhere in SLC would be most convenient, but if others want to meet up as well I am okay with whatever.

@Nick Brubaker I would love to give you my thoughts on the Salt Lake City investment market and the Utah lifestyle in general. My wife and I own a 4plex near downtown SLC and are currently under contract on a duplex in Midvale.

Also, if I recall correctly from seeing one of your previous posts, you are relocating from Japan correct? I lived in the Osaka area for about 2 years. If I remembered that incorrectly, feel free to disregard ;)

Where are you looking to buy in Salt Lake City? I bought a 4plex in the Rose Park area just over a year ago via FHA financing. It has been a good experience so far despite the bumps in the road.

4plex deals are interesting because unlike larger commercial deals, their market value is affected to a greater extent by market comps rather than off of the income they produce. I work primarily in the commercial realm for my day job, and was surprised to realize that I could not raise my value simply by increasing rents, reducing costs, and improving NOI. This helps, but in certain areas you can only raise the value so much before you hit a ceiling on value.

Despite the fact that my 4plex would not trade where I think it should from an income perspective, the good news is that I did not buy the property for appreciation alone, I bought the property for cash flow and it has performed beautifully so far. We rehabbed all the units and have raised rents by well over 20% and will be cash flowing around $1000/month going forward. Based on my go forward 10 year projections cash-on-cash returns should average 44.39% over the next 5 years.

CapRate wise (based on my original underwrite) I bought the property at a 7.11% cap. As I stated above, I probably won't be able to exit at a similar CapRate because of the location of my asset, but I should have some decent equity build up from the improved operations.

Hope this helps, and good luck in finding the right deal. If you would like I know another investor that is looking to sell a 4plex right next to mine, but his is fully renovated already and will likely fetch a premium. PM me if you are interested!

@Trevor Thompson

Thank you! I actually have called and am just waiting to hear back. He was my first thought to contact from BP and SLREIA. I was hoping to get some other input in the meantime. Thanks for the reference!!

Hope I can get some advice on how I should structure my second multi-unit deal.

Quick background, my wife and I bought our first property, a 4-plex in Salt Lake City just over a year ago (FHA owner occupied loan). We renovated all 4 units, increased rents by just over 25%, refinanced, and are getting strong cash flow.

We were planning on waiting an additional six months or so to replenish our capital before continuing on to our next owner occupied deal, but a great deal on a duplex came up that I felt we couldn't pass on. After figuring out we probably couldn't finance the deal ourselves, I decided to raise capital and bring on equity partners.

We were able to raise over $80K in a day to cover the down payment and a $30K renovation budget. We will be coming into the deal with $5K and requested a 10% additional equity premium to manage the deal. We were able to put the property under contract and know I am wondering how I should structure the entity?

I have never worked with partners before so don't know what the best approach would be. I have basic understandings of LLCs and partnership structures, but would love some advice on which type is best in this scenario. Any insights, wisdom, or advice would be greatly appreciated!!

Thanks!

@Account Closed

I commend you on paying down personal debt. I think being debt free in your personal finance plan is great and something everyone should strive for. 

Investing in real estate without using debt, especially just starting out, on the other hand is not such a great plan in my personal opinion. Debt can be an incredibly powerful tool when used to purchase cash flowing assets and I doubt you will find many successful investors that have created great amounts of wealth without using debt to leverage their purchasing power.

Unsecured credit card/student loan debt is completely different than a mortgage secured by a positively cash flowing asset.