All Forum Posts by: Ryan E.

Originally posted by @Steffany Jensen:

@Ryan E. Thank you so much for the information. It’s super helpful. Yeah, compared to most deals on BP investing in the Salt Lake Valley doesn’t seem like a great idea, but like you said, the population growth, great economy, and business growth makes it a great long term investment opportunity.

Honestly, with some of the numbers we’ve been seeing it seems like a great opportunity even if we aren’t making positive cash flows. If we could just cut what we’re paying in rent right now in half, we’d be saving $800 every month, which would be a huge win.

Have you looked on KSL? I’ve seen quite a few off market deals recently that you might want to jump on. We’re looking to close sometime after the new year, around January or February, so we’re passively looking. If you come across one that you’re not particularly interested in, feel free to pass it our way :).

We will definitely read that book though! Thanks again for all the info! Oh, one more question for you, do you have a lender you trust? Would love to use someone who’s familiar with house hacking and is trusted by another BP member.

Actually I do know a mortgage broker! His name is @Shane Barker. He’s one of my best buds and he’s a very trustworthy and honest person. I talk to him at least a 2-3 times a week and he’s always answering my questions about mortgages. PM me and I’ll get you his contact info. 

I would love to see any deals you are seeing on KSL. I’m actially really glad you mentioned KSL because that’s one area where I’ve been slacking big time in looking for deals. I’ve been thinking real hard about doing a direct mail campaign with the goal to acquire one rental, possibly to house hack, every 12-24 months. Anyway, would love to chat more with you and your husband! 

Originally posted by @Steffany Jensen:

@Cherie Orellana that's what we've been thinking about, but we are worried about the mortgage insurance, closing costs, etc. and are wondering if it's really the best option? We've even looked into a 203k depending on if we decide to buy more of a fixer-upper. Do you know much about those? We're looking mostly in South Salt Lake, North Salt Lake, and anything that's East of I-15 in the Salt Lake Valley. I would love to receive the hotsheets, if you don't mind. We are also keeping our eyes out for basement apartments and mother-in-law.d

Steffany, I have been house hacking for the last four years in the valley. I wouldn't worry a ton about PMI and closing costs etc. Instead I think a decent cost benefit analysis would be to look at what the mortgage would cost while house hacking vs what you would be paying in rent. In SLC it's going to be super difficult to find anything that the rest of BP would consider a good cash flowing deal...at least as far as rules of thumb like the 1% rule and at least on the surface analysis and before adding value or raising rents to market rate or even waiting for them to naturally climb.

It can seem like you are going against all of BP land but in my situation it has worked out very well. My portion of the mortgage is about $700-$800 per month and I live in an A+ neighborhood and my home has gone up in value tremendously. Now, you should definitely get as good a deal as possible but don't let it stop you if you aren't "cash flowing $200 per door" would be my advice. I would also say find something where you can add some value and raise the rents but as long as you are in a pretty good neighborhood and you hold for the long term your rents and value should go up over time in spite of any short term dips. The economy, job growth, population growth, etc are all tremendous in UT. That combined with the limited land supply make for obvious value increases over the long run in my opinion. 

Also, I just finished reading Scott Trench's book, "Set for Life" and it's a fantastic read. I highly recommend it for you and your husband if you haven't read it already. The main point I got out of the house hacking advice Scott gave was that it's more about reducing your #1 expense, housing, so that you can increase your savings rate and thus your investing. 

I am also looking to house hack again...this time  a fourplex. I see all the 2-4 units in Salt Lake County and I analyze them daily by running them through the BP rental calculator and looking on Zillow rents for rents in the area as well as running the address through Rentometer. If I can find a fourplex where I will be paying 0-$600 after rents from the other three units I will most likely jump on it once I get a few other details ironed out. Ideally this will be a four plex in a great area (likely $500-$800k), value add, an ability to raise rents and bill back some utilities to the tenants. Once I make these theoretical improvements and raise rents I will move out and the rents from the unit I move out of will then cover the mortgage plus a nice buffer. This likely will be cash flow break even when including 10% vacancy, 10% maintenance, 10% property management but I don't need anything above the mortgage as I have a great job that I enjoy so I will just stash everything and build up a nice reserve on top of what I already have. I don't think I ever would have bought my current house had I purchased based on popular BP cash flow analysis and I would have missed out on my tenants paying over $50k towards my mortgage, a much much lower housing expense than what I would have been paying, and a very significant amount of equity growth. 

Just make sure you have plenty of reserves and I think you should be ok. 

@Kevin Leppink no problem. Good luck!

@Jeffrey S. Breglio thanks and I’m glad you chimed in! I’ll have to come to one of those downtown luncheons very soon...I didn’t realize they were at Legends. That’s super close to where I work. 

@Kevin Leppink first thing first is that I have never done a direct mail campaign but I have been getting some ducks in a row as I have been deeply considering starting one with the simple goal of picking up one rental every 12-24 months or even finding a property to house hack. Here's what I've found out from the research I've done and the people I've talked to. Again, I have not done a mailing campaign and I'm no expert. These are just some of the steps that I've taken in order to prepare for if I do end up marketing for rentals for me. 

-Find somewhere to get your list i.e. ListSource. The list will include the mailing address of the owner I believe. 

-Find someone to print your postcards, letters, whatever. Supposedly it's best to send a postcard first because it's the cheapest and you'll get the non deliverables back returned to you so that you can further scrub your list or skip trace those returned cards and find the real addresses of the owners. Make sure you use a first class stamp for this reason. There's lots of shops that will print and mail for you. Yellowletter.com is just one off the top of my head. Do a search on BP and you'll find a ton of info.

-Make sure you have enough money for a sustained campaign of 6-8 mailings. 

-Make sure you have some kind of phone number local to area. There's lots of different apps out there but the one I was going to use was just Google voice. 

-Make sure you know all the questions you need to ask the potential seller to determine why they want to sell and to see what are any issues they have and how you can solve them

-You'll need someone to help you with rehab estimates if you don't know how to do it and you'll need someone who has access to the MLS so that you can figure out an accurate ARV.

-You'll need a title office or real estate attorney. Here in UT the two that I know of are Jax Pettey at First Liberty Title and Jeff Breglio. I've talked to Jax and taken a seller finance class from him that was really good. I haven't had any interaction with @Jeffrey S. Breglio but he's on BiggerPockets I'm pretty sure and I've heard that he is a good guy for what that's worth. 

-You'll need contracts for the seller to sign so that you can put the property under contract to buy. The type of contract will depend on what you are doing with the property i.e. buying for yourself, flipping, wholesaling, wholetailing etc

-You may need a CRM to keep track of leads etc but that's really probably more for when you scale and start doing some volume.

Anyway, I hope all that helps. Oh, since you are local to the Salt Lake area make sure you connect with @Jeff Rappaport, who hosts a wholesaler meetup every month that is really awesome. I've been to a few of them and they are a wealth of free information and networking. I haven't been able to go in the past year or so because I travel for work and my schedule can get crazy. Jeff also does a relatively new podcast called "the creative financing podcast". I haven't listened to many episodes but it looks like they interview a lot of local to UT experts so that's awesome for us UT people. @Jeff Rappaport

@Ben W. I get emails from quite a few of the wholesalers operating in Northern UT. I don't buy anything they send out but I like to look at it to see what they are offering. 

Some of them are Salt Lake Wholesale Properties saltlakewholesaleproperties.com (they just put out a deal in Ogden today), @Jeff Rappaport who's company is called Jupiter Property Solutions I believe...Jeff runs a wholesaler meet up in the salt lake area and his deals seem to be really good at first glance. I have spoken to him and his partner/wife Rebecca Jensen quite a bit and they are really good people. A few more are saltlakewholesalehomes.com, utahhousebuyers, utahsellnow, Boothe Home Buyers, creationutah.com named Wholesale Utah Homes I believe, Prince Realty-John Prince is the main guy here...I've talked to him a few times and seems to be a good dude and a lot of his deals that I see seem to have a good amount of meat on the bone. 

Anyway, that's a lot more than I thought! I purposefully got on most of these people's buyer's lists but I think I ended up on a bunch of them when a one of them punched out a deal and didn't hide the recipients on the email haha...I'm not complaining! Most of them put out deals from Ogden to Provo and even other places. You can get on their lists by google-ing them and signing up through the websites or just call them and tell them you want to be added. 

The main thing with the the deals that any wholesaler puts out or any deal really is that you have to make sure you really know the area and you come to your own determination of ARV and repair costs. In other words...due diligence.

@Tony R Fox I also suggest you read Scott Trench’s book “Set for Life.” I’m reading it now and it’s a great read. In it he gives very god and pracrical advice. He suggests once you have no credit card debt that you save up around $25k and then purchase a “house hack.” If I were you this is exactly what I’d do and as soon as you can. You could buy a Fourplex, rent out the additional units and even rent out any spare bedrooms in the unit you are living if you are in a position to do that. You can do this by putting down as little as 3.5% and you will get a really good interest rate. If yoI do it right you will reduce your living expenses to zero and even possibly get paid to live there. You will be required to live there for at least a year. Once that year is up you can repeat the process using money you’ve saved up in the previous year. When you move into your next Fourplex you will now be cash flow positive in your first purchase and still living for free. Keep doing that process 5 or 6 times and you’ll have 20 units in your first five years. I have been living in a house hack for the last five years and it’s been fantastic. I bought mine about three years before discovering BiggerPockets but plan on repeating the process here shortly. Good luck!

Originally posted by @Cherie Orellana:

I am a real estate broker in salt lake and also invest in multi unit buy and hold.  Murray and millcreek are some of the best areas to find single family homes with mother in laws that can be rezoned to multi family. I have myself on 11 different hot sheets and go through nearly every listing in the salt lake valley up to $300k.  There are still great deals out there even on the mls. I agree with Utah being landlord friendly as well which definitely helps. 

@Cherie Orellana this is a very interesting strategy and I would love to chat with you about it! 

Originally posted by @Brian Mitchell:

I’m from SLC and live in Tucson now. Have many friends still in Utah that have multiple properties. The market there is super inflated. In fact, many of them are looking in Tucson to diversify. For what it’s worth 

 I am going to disagree that the SLC market is super inflated. It’s definitley high but I believe the fundamentals are there to support it. Huge population increases, record low unemployment, low land supply for continued growth, very business friendly state attracting more and more businesses, one of if not the highest birth rates, ppl with one of the longest life expectancies in the US...these all lead me to think over the long term these current prices will seem small when looking back. I think we are approaching the top but it’s really hard to say what will happen in the next recession...will rents and values decrease a little, a lot, stay flat...? Who knows. 

Now, all that being said...the rent to price ratios are not good on most properties I analyze on the MLS and it's tough (for me at least) to find something that "cash flows." There are plenty of investors who are finding great deals though. One of them was just on one of the recent podcasts, #288 Jason and Carrie Harris.

The long term fundamentals of Northern UT are very strong. 

@Taylor Helton I think the first thing to find out is what the going rate would be for one of your bedrooms if you were to rent each out individually. I just listened to one of the BiggerPockets Money podcast episodes, Episode 9. The guy who was interviewed did exactly what you are talking about...bought a couple of single family homes and rented out the rooms which helped him to be able to continue buying more rentals. Could be a good strategy. If you are living alone I'd say you are wasting potential if you aren't already renting out rooms! Depending on your payment and what the rooms would rent for you could be cash flow positive every month. If you were able to rent out each room, live for free and even make money each month you could save that money for a down payment on another house and then do the same thing. You wouldn't need a ton of money for a down payment because you'd be owner occupying so 3.5% FHA. Another thing you could do is house hack a 2, 3, or 4 unit. You'd still get the same owner occupant financing and you could still rent out each room for a higher return.

The best move depends on what your goals are, how expensive your market is, etc. If you are buying for the long term and the numbers make sense then I wouldn't worry too much about the short term market, that's just me. Whether or not you sell your current house will depend on what the numbers are for renting each room and what your payment is.

Where are you located, what are the rents for each room, what's your current payment?