All Forum Posts by: Jeremiah Maughan

Property managers are a good resource too.  We are usually the first people to find out when a client wants to sell a property and since we have years of history with properties we get a good idea of what a solid investment looks like.  I've had potential buyers call me up out of the blue and ask if any clients interested in selling [whatever property type they were interested in].  I emailed out my clients and found two who were interested in selling.  It worked out pretty well.

Yeah, from what I've seen the cash flow is better in the midwest than here.  More of a renter mentality in some areas of the midwest so it keeps the cost to rent ratio more favorable for an investor than you find in Utah.  I like the landlord friendliness of Utah laws as well as the overall economic stability here, but diversifying is usually a good idea.

Start with your income situation.  What is your income and expense ratio in your personal finances budget?  Do you have the financial risk tolerance to cover something that breaks in the property? It's okay if you don't have savings if you have a good personal cash flow situation.  When an investor has no savings and pursues "no money out of pocket" opportunities, they can get into trouble when the property needs work or something breaks and they don't have the money to fix or improve it.  Then they end up with no renters followed by a foreclosure.  You'd probably be well served to partner with someone for your first property, someone who has a strong financial position in the event something goes wrong.

The first house I owned was a townhouse my dad bought and put me on the loan via FHA and also on title. I later bought him out through a cashout refinance and then it became my first rental. My dad ended up paying very little for me and my brothers since roommates were able to pay the mortgage. The nice thing is that you can get around the singles limit when one of the kids is a co-owner due to Provo's head of household definition. I was legally able to have five in a unit otherwise zoned for three. That kept the purchase price low and the income high.

The "gotchas" are zoning and assigned gender if you're going for BYU Contracted (formerly known as BYU approved).  Many student rental buyers make the mistake of thinking they can put six in a unit zoned for three or they buy a unit for their kids, forgetting that if it is BYU contracted that only the male kids or the female kids (depending on assignment) can live there.  You can buy something that's not BYU contracted like we did, and your kids can easily get housing waivers, but their friends who are also attending BYU might not be able to get waivers to live with them.

To attract married students to a multifamily, pretty much anything within 10 or 20 blocks that is priced affordably will attract married students.  You'll have higher demand within five or eight blocks, but the difference isn't all that significant. 

Also know that BYU contracted housing does not typically allow married couples.  Sometimes they do but they've been cracking down on it.  So if you want a married kid to live there with single kids, you may not want a BYU contracted place.  The family exemption might be possible, but we'd need to check with BYU OCH for that.

Let me know if you have more questions. Definitely a subject I'm familiar with.

If your lease currently prohibits pets, then if they want a pet use it as an opportunity to addend your lease with pet approval and pet rules.  No need to wait for a new lease.  If someone comes to us after the fact and request a pet, we go through a similar application process @Brandon Rindlisbacher described and follow a similar pricing and policy @Rebecca Belnap described. Pets are a great way to increase ROI, especially for older homes or homes where the carpet is due to be replaced anyway. Last stat I heard is that more than 60% of the rental population has them, so why not provide for that group? I always inspect the properties every two months and I bring a blacklight to make sure they aren't damaging the property. However, I have found that if a tenant has an excellent background check (credit, employment, rental history) then they are usually very responsible pet owners. People can be just as nasty as pets.

As to which animals to allow, I'm pretty open minded.  All carry risks so I choose the additional deposit amount accordingly.  For example, I won't allow cats with claws in homes with berber carpet. I won't allow high energy dogs in small apartments without yards.  Cats are fine, but get the ducts clean afterward and make sure YOU are the one changing the filter, not the tenant (use a nice, high quality one and bill them for it).  Stuff like that.

I would agree with @Brandon Rindlisbacher.  We manage about 900 doors in Salt Lake County and Utah County, are on the mailing lists for wholesalers (which is where I am seeing the best pricing), and handle just shy of 200 sales transactions a year.  The best price to rent ratios I've seen is about a 9.5, and they typically range from 9.8 to 13.5.  $1,350 for a $90k is a 5.55 which does not seem realistic.  Where did your $90k number come from?

Would love to be there but will be heading out for Thanksgiving that day.  Happy to join up in the future. Can host at my office too any time.

Hi Brandon!  Sounds like a party.

I would also add that it depends on the basement.  We manage lots of homes in the 1930s range and they are fine....unless they have been chopped up into multi-units with electrical and plumbing running all sorts of weird ways and then you have to be careful.  Those end up being maintenance money burners.  So if it has a normal crawl space or a reasonably excavated basement then it's probably okay, but too often I've seen major issues under those homes or due to them being converted, when you do have a problem it can be a serious problem.

Depends on the property class and your demographic.  We find people who are renting single family homes usually have their own while people renting small apartments do not.  People more well to do will have their own also.  In-unit washer dryer is becoming very popular so at least providing hookups seems to be essential.