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All Forum Posts by: Steve Theobald

Steve Theobald has started 24 posts and replied 126 times.

Post: Retail Price reductions are here (to stay?)

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

Hi Tanner.  Good to hear from you again!  Many of the investors I work with who have homes listed have complained, "My listings are just sitting there!"  They are not panicked yet, but know that they need to factor in a bigger buffer on subsequent deals, and have asked me adjust my flip and rental deal-finding calculators.  

I don't think interest rates alone have spooked buyers, but I think the stock market volatility along with tariff talk (certainly related) are adding to the uncertainty. And then there is the natural market cycle.  Regarding interest rates, one study showed until we get above 6% the impact on purchases should be minimal.  The current 30-year rate is about 4.5%.

Remember that we have had about a 5-6% average per year rise in home prices for the past 6 years in Utah from when we bottomed out in July of 2012.  Nothing goes straight up forever, and the housing cycle is no exception.  Then you have normal winter quarter flattening/weakening.  

As far as the stock market goes, we are STILL in the longest bull run in the 100+ years of the stock market.  We crossed above the 200 day moving average on the S&P in the summer of 2011, and are still flying way above it.  But the current downtrend has many concerned.  We are about 10% below the highs (FYI, an official "bear market" is a 20%+ drop for two months).  So stock market jitters must be a factor too.  

So what am I looking at now?  I think SELLERS, with their new-found equity, should experience very little pain as they take a slightly lower offer to get their homes sold. The DOM (days on market) here in Utah, which has been as low as 8, is now around 35, so we are FINALLY entering a normal market again.  

As an agent for investors, I am actually looking forward to the next year.  I think the "fear of the sellers" will be greater than the "fear of the flippers" (or B&H investors), so purchases will still happen.  That spread is what I am banking on to stay in business and even thrive.  Even with flat or slightly downward prices, the flipper believes he/she can get in and out in 3 months and come out just fine, but the seller can see no end to the potential drop (especially those still affected by PTSD from the last correction.)  Investors should not be afraid to hold firm on their lower offers.  The deals will come as more and more sellers get spooked by increasing DOM.  

For those selling rehabs, if necessary, I say take your potentially painful haircut quickly and move on, especially if you have hard money in play.

And if you are about to list a home, remember that it is better to price the home competitively from the start and hold firm than to lower the price each week down from an overly-optimistic starting price.  The latter method statistically nets the seller less money--buyers sense a highly-motivated seller and have all the reasons in the world to push hard for an even better deal.

(And whatever you do, don't do what some guys do when buying and drag out the Due Diligence for 13 of 14 days for example and then try to negotiate a huge deduction.  That is just wrong.  Do it on days 2 to 5 if needed.  Please don't ruin it for the seller--everyone is watching the DOM.)

So that is what I am seeing.  Let's make 2019 a great year.

Post: Anyone Flip High End Homes in Salt Lake City

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

@Kyle Pierce  I have several clients who are not afraid of the $1M+ mark.  I may be able to hook you up.  I will see if they are okay having you call them and will then PM you.

Post: Real Estate investments in Utah

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

@Account Closed, Becca has good info as always.  Even though my broker is a property manager, I don't get into the nitty gritty of landlording (I just help investors find good deals).  I know that you need to take a "good landlord" class with some cities, and I recommend reviewing the UAA - Utah Apartment Association website for more info:  Utah Apartment Association.  

Post: Cap rate and COC in CottonWood Heights, Utah

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

All the prior comments are really good. Because of the growth of the past 6 years from when the Utah market bottomed in 2012, appreciation and principal pay down appear to be the only sane reasons to hold rentals in your portfolio in Utah - because compared to much of the rest of the country, the cash flow is lagging here. But for those with a longer term horizon, I have still been able to find a few SFR and Multi-family deals daily that work quite nicely on CoC and 10-year IRR. PM me if interested.

Post: Looking into buying our 2nd rental property in Northern Utah

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

Hi @Ted Guzman. Great question! 1) Talk to your lender to determine your max purchase price. But make sure to include the income from your son's rent. 2) When talking to the lender, ask again about the debt to income ratio but this time include the potential rents from a single family residence (SFR), a duplex, a triplex, and a fourplex. This will challenge the lender, but he/she will manage! 3) Consider converting any retirement funds you have into self-directed funds so you can purchase real estate with them. 4) Let me (or another agent) help you find, negotiate, and purchase a property that has good rental numbers. Both SFRs and Multi's can be great rentals. 5) Manage this second one yourself to see first hand the complexity, but then plan on hiring a property manager for #3 and #4 after you get tired of whiny tenants. LOL. 6) Remember you are in the for the long haul and don't sweat any eventual market down-turn. Please PM me privately to continue the discussion.

Post: Utah "SuperRentals" - best SFR and Multi rentals in 6 counties

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

Utah is a hot market and the deals are flying off the shelf.  How can you quickly know which rental deals have the best numbers each day before they are under contract?

I have the answer!  Each day I send out a list of the top SFRs and Multi's with the best rental numbers to those who commit to use ME to make offers. 

I estimate rents, look at all the pics to estimate rehabs, and do full-blown CMAs on all the deals.  

Am I nuts?  You decide.  But take advantage of it while I am willing to spend this time.

Here is a portion of today's SuperRentals list, sorted by IRR:

Be sure to connect with me here on BP and fill out my short questionnaire:  http://tinyurl.com/SUPERSteveHomes

I look forward to sending you my list.  

Enjoy!

Steve Theobald 

Post: Real Estate investments in Utah

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

@Becca Summers Love the island idea.  But how could a bridge or road not interfere with boating?   Hmmmm.  Congrats on the $600k sale!!

Post: Real Estate investments in Utah

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

@Becca Summers  that's really exciting info about FB and Eagle Mountain.  And I like how you said "growth is from going UP" down in Orem/Provo.  I have always wondered what we do in these boxed-in counties since the birth-rate and in-migration is probably not slowing anytime soon.   I have thought about draining half or all of Utah Lake, but that idea didn't go over too well with my wife, and I am sure that the Saratoga Springs lakefront dwellers would string me up.

Post: New to SLC - Looking for Real Estate Agent Recommendations

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

@Chase Harmon  I am in Salt Lake.  I work mainly with investors.  Few agents have the experience and ability to let "the numbers speak" on a deal and not make it emotional (which is what is required for an investment).  I have been an investor myself since 2006.  I have done about 30 flips and just closed my 150th deal in 6 years as an agent.  I'd be happy to help you with both SFRs and Multi's, flips and rentals.  Please message me privately.

Post: noobie from Utah seeking advice

Steve Theobald
Posted
  • Real Estate Broker
  • Salt Lake City, UT
  • Posts 132
  • Votes 143

@Allan Anderton  Congrats on listening to every podcast.  Wow.  Also, I am impressed with how hard you are working on the down payment and thinking things through.  While not related to rentals, yesterday I heard about a new flip investor SELLER who had to bring $40k to the closing table upon resale.   Are you freaking kidding me?!!!!   This real estate business only works long term for those who engage their brains and factor in ALL costs and risks.  You have gotten some great advice from others in this thread, and you will succeed.  

By the way, I regularly produce a list of the best SFR and Multifamily rentals in Salt Lake and surrounding counties. The first pass is based on the "Gross Yield" which is simply the ratio of annual estimated rents by bedroom count divided by the sales price. The ones that float to the top MAY be good rentals. From there I estimate rehab costs and more. I'd be happy to share it. Let's talk.