All Forum Posts by: Sam Levin

I'd only put in that which you can afford to loose, just in case it all goes "poof"

Hi Jamie. One thing you may want to consider is the possibility of hacking into a small multi like a duplex. Mortgage lenders will qualify you for a higher purchase amount for multis than they would on a single, because they will count the rent you will be making on the other units as additional qualifying income for your loan application. I did this once using FHA on a Fourplex in Provo and it was a great investment. My DP was around $20k and when I sold it I cleared over $200k.

Good luck to you and let me know if there's ever anything else you'd like to know about house hacking.

I'm not 100% sure on this either, but I believe the way that it would work is you form the LLC first and re-title the relinquished properties into the LLC before sale. This way the selling entity is the same as the buying entity as per 1031 rules. You should definitely find an experienced 1031 facilitator to ask about this.

Sounds like a keeper to me. You could get a HELOC in it (as long as you are still living there) and use that money to do some other investing. 5 years from now the beach house could be worth as much as $1.5M which would make for a great $1M 1031 exchange into a small apartment building.

Quote from @Mat Fisher:

Anyone have a recommendation for their property management company in Provo Utah area?

Hi Matt. I have some experience with property management here. My partner and I have been in the business of managing properties in Utah County for 10 years now. Our company is called Utah Income Properties. We are a tiny operation of two people who manage 20 units of long term residential townhomes and condos.
We are a realtor team and management is not our main business but it’s been a good way for us add value to our sales business (by offer an all in one type of option for investors) and it generates a little recurring income which is handy when sales are slow.
The first thing I tell people about property management is that it’s a job many owners can easily do for themselves, especially if it’s a simple residential unit that’s in good shape, preferably something that’s less than 20 years old. I’d be happy to share with you what we’ve if you want to try to go that route.
If self managing isn’t an option for you then there’s a mid-sized company in Provo called Passaro leasing that is great to work with. The people who own that also own the brokerage where I work and they are very good people. I hope that helps. Feel free to call me if you want to discuss this further.

I've seen some clients do this with great results. One thing I'd think about is that some of the retail products which do this seem to be useable in a 1031 exchange and some not, so I'd keep that in mind when selecting what to invest in, if 1031 exchange is part of your strategy.

Hi Tua. Don't fret, here's lots of potential in that townhouse as long as you can comfortably hold on to it. I've purchased properties before as a residence, that were in negative cash flow initially, which are doing great now. Rents pretty much always go up here, with the exception of the last to years where they've been flat and even softening in some cases. We manage a bunch of townhomes for clients and we are now for the first time having to do slight reductions on turnovers. The silver lining to that is that, because rents increases have been suppressed for a while, there should be some upward pressure on them to snap back up after home prices start to rise again, which is effectively happening now because rates finally went down. There's a price/rent lag because leases are typically for a year so there's the delayed effect of old leases playing out before upward pressure on rents does it's thing.

With that said, there's also your ability to refinance out of that rate and improve the rentability of it that way. Keep in mind that your refi options change dramatically once you do move out because you will loose the option to use a homeowner's refi and the much better rate that provides. If I had been talking to you before the closing I would have recommended that you choose the 2-1 buy down, which would lower your rate by 2% ($500/mo) in the first year and 1% ($250/mo) in year two. That ship has sailed now but you should keep the 2-1 buy down in mind as a possible tool for future purchases. It's ideal for the current/recent market conditions where everyone is projecting rate reductions in the near term.

Your current rate is so high that you are already arguably in a worthwhile position to refi but you may have to wait on that for the first 6 months or 1 year of your loan. That will likely be an even better time to refi anyway. If you have any other questions feel free to reach out to me directly. I'm happy to help!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $674,000

Represented out of state investor on pre-construction purchase of brand new 4-plex in Vineyard, UT.

Investment Info:

Large multi-family (5+ units) commercial investment investment.

Purchase price: $3,100,000
Cash invested: $661,733
Sale price: $3,700,000

Represented an investor client in their build/pre-construction purchase of a brand new 18-plex Apartment building in Vineyard, UT, as well as in the sale of this property in the following year.

Investment Info:

Townhouse buy & hold investment.

Purchase price: $495,000

Represented an out-of-state investor client on purchase of a brand new townhome in Lehi, UT (3 beds 2.5 baths, 2-car garage, Total: 2,288 sqft / Finished: 1,559 sqft). We also manage this property for him now. This townhome is renting for 2,475/mo.