How do I find my first deal in SLC, UT?
Dear BP community!
Really excited for my first post on this great site. I'd like to start with a quick background, explain what knowledge I have and then ask for everyone's help on finding my first deal!
Background:
I am 25, live and work full time in Salt Lake City, UT. I currently live in a condo that I bought last July.
My 5 year real estate goal is to buy and hold enough SFHs that are all fully financed that generate passive income of $1500 a month.
Experience:
My real estate experience is the property that I live in which I sublease a room and used an agent to buy. Additionally, I have listened to every BP podcast out there and spent some time of the forums. I come from a finance and investing background and know the very basics on real estate valuation (2% and 50% rule) I have lived in SLC for 7 years and have a basic idea of what rents will be.
My First Deal:
I am leaning towards buy and hold SFHs rentals within an hour of down town SLC. However, I am not sure the best strategy to find a property where the numbers make sense. So far through classifieds, MLS and every other online free resource I haven't found a deal in the 1-2% range where the numbers work.
So, Do I...
1. Direct mail delinquents?
2. Go after short sales?
3. Drive for dollars?
4. Continue to view the MLS?
5. Ask an Agent?
Unfortunately, I'm not sure I have time for all of these. I need to specific and targeted on how I spend my time finding my first deal! Let me know what you would recommend.
Thank you,
Bryce
Hey Bryce,
Welcome to BP, I am relatively new to real estate investing however I work with an RE Agent Melody Sheldon, she has help me on four fix and flips but I could have rented them as well if were ready to go that way she is an expert in short sale properties she may be able to help. She works in SLC now. Her number is 1 435 770-1703 she would be a great contact to start building your team! Good Luck Tell her Ken sent you
Also Andy M is a no member he wholesales property's in salt lake he moves several houses a month he would be a great resource for you his number is 801 557 4446. It would be really good if you would tell him Ken Fricke sent you! You get on his list and you will find great deals in SLC
Bryce
Welcome to BP. I also live in SLC.
Best three strategies based on what you mention would be...
1. Networking - I'm part of SLREIA salt lake real estate investors association. They have a monthly meeting the second Wednesday of the month in Sandy. Google them for the website for more details (I can't post the link here ). They also have and wants section the website where you post what you are looking for and see if anyone is selling properties that fit your criteria.
A few of the investors I know from SLREIA have rentals mostly on the west side of the valley (west valley, Kearns, taylorsville, rose park)
2. Driving for dollars in a farm area. You mentioned an hour radius of SLC which puts you Orem/Provo to the south, Ogden to the north, tooele to the west and past Park City to the east. That's a lot of diversity and ground to cover.
I have a primary farm area between my home and my office. When I go to the office or run errands I try to drive down different side streets for FSBOs, for rents, and vac ants. Everything else I have an agent put me on a hotsheet in areas I look for properties in.
3. Working with agent like ken said. You can ask them to set you up on a hotsheet to have properties that for your criteria (I.e. Area, price, property type - SFH vs multis etc) emailed to you as the hit the MLS.
@Bryce Till Welcome and good luck in your search! @Jason Fraser and @Ken Fricke gave some good suggestions on how to find buy and hold deals. The area where you buy really depends on what you are looking for in a rental property and the price range you can afford. As a general view of what I'm seeing- Salt Lake County has a solid housing base, Ogden can usually give you better returns, and Tooele has cheaper newer homes right now. They are all good options, but it depends on your strategy and goals.
Thank you all for you comments.
I have been away as I have actually just finished my first DIY in my current residences. I did new paint and laminate flooring, it went well but as you would have guessed took longer than expected. I did laminate flooring from LumberLiquidators and installed it myself. Looks great and I have heard it should hold up pretty well.
@Jason Fraser and @Ken Fricke thanks for your comments. I will give Melody a call and also have plans to join the SLCREIA
Since this post I have continued to scour the internet for deals on classifieds and on the MLS and I haven't even come close to finding a property that comes close to the 2% of 50% rule.
I had one lead on a 1 bed 1 bath that asked $65k, the numbers worked until I found out an offer had come in at $102K
Looks like I'll need more networking and more creative ways to find motivated sellers.
Starting to think the SLC market may just be too high right now for easy deals.
1 bed 1 bath probably hard to rent. What general area was it in? Was it a condo?
-
Real Estate Agent Utah (#4922719-SA00)
- Gary Buys Houses
keep in mind the 2% rule doesn't work in every market. If it did in Utah, I'm guessing it's a really rural part of the state or the rare exception in Salt Lake County.
@Bryce Till I have the same problem in my area. The way I try to get around the poor return is to buy distressed properties. They may only need $5,000 or $6000 of work, but they can be purchased much cheaper because of the work that needs to go into them. Some need more or less work, but the idea is their cost is much lower so they cashflow a bit better. Good Luck
I'm still a newbie but I've yet to find anything on the MLS that beats 1% in Salt Lake County. I think@Jason Fraserhas the best idea. Go find a rehab that;s not too bad off and put the value back into the house so you can get the ration you need to make a profit.
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#2 New Member Introductions Contributor
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Try calling the MLS expireds great way to develop potential wholesale deals or listings for a referral agent
Go to IREM.org search for ARM certified property managers. Call 5 ask them what parts of the city they like/dislike and why. Ask them what they see expenses running per category per unit. What do they see them selling for per unit, what is the market occupancy rate. Ask them if they know anything coming up for sale. Great way to pick up some good info and possibly a deal.
Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers.
Good luck
Paul