I am currently looking for my first rental in Salt Lake County, Utah. I have been drawn to the west area of Salt Lake County because of the lower property prices. I would say that the west area market has more C rated properties than most. I am currently drawn to mostly multi family rentals because I would like to house hack. I have a few questions and they are as follows;
Has anyone had good luck with investing in West Valley, West Jordan etc?
How have the tenants been for you?
Would you recommend continuing searching in the west end of the valley?
Let me give you a little more information about my current situation. I have a potential investor that is willing to put up the down payment and completely own the property. I would like to find a 3+ unit multi family unit rent out 2-3 units and live in one of them for free. I am interested in being a landlord for a year or so just to get a feel for it. While I am currently a landlord (hopefully living for free) I want to save enough money to get my own property in the years to come. I would appreciate any good insight from any investor and/or recommendations on what I should do.
Thanks in advance!
West Jordan, Utah
Now that I re-read through my post it does sound a little confusing as to what I am looking to do. So I want to get into the real estate game as fast as possible. I currently dont have any capital and looking for some low risk options. I have someone who I am partnering with to where they will pretty much own the property but I will be a landlord for him. I want to find a 3+ unit multi family property so I can live in one unit and manage the rest for my investor. I plan on finding the deal, running the numbers, and getting the deal all set up. Of course I will need my investors approval before we actually go forward on the deal.
The idea for this is because I want to get some landlord/management experience so I can manage my own property successfully in the future. I will be saving money for future deals and getting some experience in the process. Any information about what I have just stated and the questions above would be great!
@Stefan Coles I like that you want to get the experience managing properties a lot of people want to hand that off right out the gate but knowing what it takes to manage a property and screen tenants is a huge asset. I know you can manage your own property without having a real estate license but in Utah you have to have a real estate license to manage someone else's property. I didn't see in your profile is you where an agent or not. Could you structure the deal so you have some form of ownership to get over that? You can always get your license it's about 120 hours of class and a test and will cost about $1,000 I think I can't honestly remember it's been a while.
@Becca Summers thanks for your response. I currently do not have my real estate license but looking to get it in the future. I was not aware of that rule here in Utah, but I'll have to do more research on it. On the other hand I might be able to restructure the deal so I would be able to partly own. I'll need to talk to my investor to clarify that.
@Stefan Coles @Becca Summers is right. Here in Colorado you have to have a large chunk of equity in the entity to be considered the owner of a property held by that entity. If the property is owned in the name of a person and it isn't yours, then it isn't yours.
You can look into what the rules are around on-site managers. As long as they are not negotiating leases and such, they can be exempt from license requirements. Maybe Utah is less strict there.
I would recommend either becoming an agent and doing management, or saving your pennies for an owner-occupied 3 or 4-unit that you can buy yourself. If you get your license, then you can become a standard renter in your investor's deal, but then you can charge him for property management to add to your income and experience. I don't see a mixture working well for you or for the investor.
You would have to structure it differently for sure. But if you don't have the capital just study the Utah rules.
The licensing requirement does not apply to an owner who manages his or her own property, an employee for one property owner, apartment managers who reside in the apartments at reduced rent, full-time salaried employees of a Homeowners Association, hotel or motel management, or management activities associated with rental accommodations for a period of less than 30 consecutive days.
So If you structure it so that you are the on-site manager (his employee), at a reduced rent or something of that nature I believe you would be okay. It sounds like you don't have the capital right now to get into it, but maybe if you have the reduced rate on rent while learning the skills as his employee, you could gain some knowledge about what it takes to manage properties, and save some money for your own deal.
I think the question about managing the property has been answered well. Here's my thoughts concerning the areas your looking in. I started out in old Magna (as far west as you can go) and in Glendale. These are two of harder areas to deal with in Salt Lake County. That being said, in general SL County doesn't really have bad areas when compared to the rest of the nation. I have now had rentals in most cities on the west side and my experiences have been Great, Horrible and everything in between. Most of the outcomes with the tenants were predetermined by me. Meaning when I did a good job screening my tenants I usually had good outcomes, when I started out in the business and didn't really know how to screen I ended up with some pretty negative outcomes. Right now Salt Lake County is a seller's market just like the majority of the nation. It's hard to get a very high ROI. Since you're looking for a rental I'd almost say wait and let the market go through a correction and then be ready to take action when it does. But if you have an investor who's okay with a small return then go for it.
If you were looking to owner occupy a home you were going to stay in for a long time then it wouldn't matter as much if you bought high and had to endure some low's because eventually the market would work it's way back up. Fix and flips right now are a decent route to make money if you can buy right. They are easy to sell, just hard to find at the right price. Fix and flips are short term situations so you would most likely be able to exit before the correction got to steep.
Last note - West Valley City is very strict about the upkeep of the property and yards. I have rentals on 3600w and 6400w so they get noticed by the city A Lot. I hope this helps. If you have any specific questions please feel free to ask. Good Luck.
@Amy Kendall and @Chris Ramos these are some great answers and I appreciate you taking the time to answer! Ultimately I am looking for a place to live whether it is a SFR or MFR. West Jordan or West Valley is where I feel I could get the best priced home (sq ft/mortgage). I am kind of entertaining the idea of living in a fix and flip to build equity in the home using a FHA loan then renting it out.
I am currently living in a apartment and I'm tired of throwing away money! Just looking to buy anywhere if the price is right. The only thing that is stopping me right now is DTI and bad credit from past events. However I'm trying to be optimistic and looking forward towards the future.
Thanks again and I hope to see you guys around.
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