All Forum Posts by: William Hochstedler

Is there such thing as a deal in this market?

The bottom line is that similar properties are selling in days for all cash at this price.  If it get's listed, it will sell for at least what you have it under contract for.  If that's your definition of a good deal--that other people will pay more for it--then it's a good deal.

Remember that most of the building systems will be at or near the end of their useful life cycle.  You already mentioned the roof.  You might have $25K worth of repairs in the next few years.

Even that makes it more attractive than many properties that are currently available.

I'm telling investor clients that it still makes sense to buy real estate if you have a too-much-money problem (which many people do).  But buying for appreciation or cash-flow in Utah is getting less and less interesting by the minute.

A couple of factors are at play.

First, rents trail purchases because it's a less efficient market.  This is because of typical year-long leases and independent landlords that aren't as efficient charging market rent at every turnover.

The second factor is that rents are a function of monthly payments not purchase price.  Because of the dropping interest rates, mortgage payments haven't gone up that significantly.  So cashflow hasn't gone down as much as real estate values have gone up.

We see it in the commercial and multi-family sectors as well.  Cap rates are very low right now because appreciation has been strong (which drives up prices without corresponding cashflow) and interest rates are down (which increases buying power per $ spent).

Going forward, rents will probably climb as the inefficiencies in the market catch up, interest rates climb, and a greater percentage of the population is unable to purchase homes.  In more expensive markets where the rent to value ratio makes renting much more affordable than buying, rents go up and a greater section of the population become tenants. 

Northern Utah Real Estate Investors Association (NUREIA) has a monthly Ogden meeting on the first Tuesday of the month.

@Gay Lloyd hosts a casual meetup at Pepito's on 25th St.  On the last Wednesday of the month.  They also post the event on here BP.

Welcome to BiggerPockets!

There are lots of home owners who don't have access to the sub 3% interest rates because of credit scores and DTI. Even with equity, these people are effectively homeless if they lose their primary residences. The rental market is very tough for tenants here in Utah with an almost 0% functional vacancy rate. So they are going to fight tooth and nail to hold on to their homes rather than sell.

I just don't see enough conversation about what happens when the bottom half of the economy can't afford housing in any shape or form.

A lease is just another encumbrance on the property like an easement, lien, or mortgage.  All of them must be resolved (i.e. paid off) or they transfer with the property (like a utility easement).

If the tax sale (and property) was in Utah, you won't be able to get title insurance within 4 years.  As a result you won't be able to get institutional financing on it.  So in order to sell it or finance it, you will have to do a quiet title action.  This will cost about $1500-2500 and give yourself at least 3 months because of notice requirements and court schedules.

If it's actually available, it will be listed on your regional MLS. Probably https://www.mainelistings.com/

Banks require broad marketing and having it listed by a Realtor. If it's listed on the MLS, you should find a local real estate agent to help you make an offer.

There's lots of info here on how to find a good agent.

Welcome to BP!

The Utah Apartment Association has the best up-to-date lease in the state because they write the laws. https://www.uaahq.org/

Check out this thread:  https://www.biggerpockets.com/...

I think America First has some interesting products in Utah and folks on BP keep mentioning PenFed but I am not familiar with them.

There are state approved contracts on the Utah.gov website:

https://realestate.utah.gov/re...