All Forum Posts by: Matthew Yrungaray

Hi Jim,

Thanks for the reply, the seller is a close family friend. He is willing to do almost anything to help me acquire the property if it makes sense for me. He wants me (well, maybe more my wife) to succeed and wants to give a helping hand.

The asking price is very reasonable according to other 3rd party agents/brokerage firms.

The hypo on seller financing is 6%, seems reasonable to me...

Thanks for the reply Jeff,

The cash flow from the property is about $36k a year, a cap of about 6.5. I will put no or very little cash into the deal. I have thought about various ways to re-position the property (i.e., married students to single students +$14k, eliminate cable tv +$9k, increase rents $25 to mkt value +$9k, convet to condos, etc...). I am trying hard to not be a motivated buyer. I see the total return around 8%.

Good points around vacancy and maintanance, some of both is the rule not the exception.

Does it make sense to invest for total return? A property that I am considering is very tight on cash flow, capital appreciation is slow in the area but the property is in great shape, is never vacant and I can owner finance. The property is in a very desirable area. The return on this property would come from principal paydown, appreciation and very little income. I will put very little if any money into the deal. Thanks for any input

Matt from the Salt City

Thanks for the Utah perspective Brian, it's nice to here from a local investor. I have wondered about what caps makes sense around here. Do such low caps make Utah a bad place to invest? Is there a certain type of real estate that yields better? Thx for weighing

Welcome Ed to BP! Glad to have another BPer in SLC! Let me know if I can help out. Cheers!

That makes sense Joel, I'll have to take a closer look at expenses and price and revisit the analysis. I don't want to make a bad deal and regret it later. I'm not afraid to walk away. Thanks

Any other Utah investors out there want too with in?

Thanks for the feedback. I am exploring other financing options, including seller carrying back some of the note. I have looked at 2 years of tax returns and besides some updating (flooring, fixtures, etc...)the expenses seem to be low over all-due to proper maintanance and recent updates. Utilities are covered by the tenants. The stated expenses include property utilities and property management. The property is located in an " A-" location and property is in B condition. Price per door in this area is between $80-90k. It is also located near a college campus-hence the low vacancy rates. I agree that compared to other markets this may not look like a deal(cap rates in the area are 6.5 cap) but I have had other third parties drooling over the property. I have first right of refusal on this property and I want to make sure I thoroughly evaluate this property. Perhaps in this case the play is not current income but equity thru principal pay down, capital appreciation, or a combo of all three?

Maybe it is a bad deal...? or is it a more conservative investment with conservative returns?

Hello all,

I am working on a 30 unit multi family property in SLC, UT. Each unit is 900 sq ft, 2 bed 1 bath. Units are updated and about 40 years old. Vacancy has been almost 0 in the last 10 years. The rents are perhaps $25 under market. There is no deferred maintaince, PM has done a great job keeping up the property. Here are some other details:

Asking price: $2.2M

Gross income: $234,880

Expenses: $76,760

NOI: $168,248

LTV 80%

debt service: $139,400 (20 amort. @ 5%)

Cash flow: $28,865

Cap rate: 7.6%

(It seems that most investors are looking at higher cap rates but this seems to be better than most in this area and for this quality of property)

I have a million questions:

How do I protect myself and investors from the short fixed rate period?

Should I offer as a private mortgage opportunity?

how structure the ownership of the deal when most of the cash is coming from other investors? I want the equity and I am willing to forgo the current income.

I have other questions but I think that they may be answered along the way.

Thanks to anyone that has some insight

Matt from the Salt City.

Thanks for the welcome Jenkins and Mehran! Jenkins, keep it up working hard to help us investors. Mehran, great job meeting your goals for the year! It sounds like you are on your way to meeting your long term goals. What has helped you recently move so quickly past your annual targets/goals? Experience, mentor, book, etc...? I have my apartment deal in front of me already. I'm going to post some info about it today.

Thanks for the welcome Travis, Gary, Ned and Matt. Ned-I'll for sure check out multi-family millions. Matt-thx for the ABC's of investing tip, I'll give it a look. Salt Lake is awesome but I've heard people say that the margins are tighter and harder to find buy and hold deals. Regardless, in still looking.