Newbie from Salt Lake City, Utah

23 Replies

Hello everyone! My name is Jared McNeel and I am a healthcare professional and newbie investor from Salt Lake City, Utah. I have a degree in business and finance, work full-time, and have a dad who is a general contractor. 

I have joined Bigger Pockets to associate and network with others who share a common interest in RE investing and would like to network with as many investors/private lenders as possible. Since I am very new I have a lot of questions that hopefully others in the BP community might be able to answer. 

My current/primary goal(s):

I am acquiring my first property in mid November through a traditional lender and am trying to better understand how to use this property as rental income (through placing tenents) and to then keep building up a rental portfolio one house at a time. Basically, I would like find out how to go from one property to two and then have the trend continue. How would I be able to purchase another property financially with a lender if I already have debt from my first property?

SInce my first deal was purchased through family I did not need a realtor and would like to meet one here on Bigger Pockets in my area who could send me leads and alerts for possible future deals. 

Thanks in advance everyone! 

Originally posted by @Jared McNeel :

Hello everyone! My name is Jared McNeel and I am a healthcare professional and newbie investor from Salt Lake City, Utah. I have a degree in business and finance, work full-time, and have a dad who is a general contractor. 

I have joined Bigger Pockets to associate and network with others who share a common interest in RE investing and would like to network with as many investors/private lenders as possible. Since I am very new I have a lot of questions that hopefully others in the BP community might be able to answer. 

My current/primary goal(s):

I am acquiring my first property in mid November through a traditional lender and am trying to better understand how to use this property as rental income (through placing tenents) and to then keep building up a rental portfolio one house at a time. Basically, I would like find out how to go from one property to two and then have the trend continue. How would I be able to purchase another property financially with a lender if I already have debt from my first property?

SInce my first deal was purchased through family I did not need a realtor and would like to meet one here on Bigger Pockets in my area who could send me leads and alerts for possible future deals. 

Thanks in advance everyone! 

 Hello and welcome! Best of luck to you!

It’s mostly about debt to income ratio when it comes to traditional financing. Make sure your mortgage on the property is less than 70% of what you charge for rent as a lender will only count that anyway when you need to get the next loan. You should strive for better than that though! There are many reasons for this, operating costs, vacancies, repairs etc.  Then you should count on bringing 20% down payment on the next one since it will be investment ( non owner occupied) You should be able to get more loans on future properties so long as your debt to income remains good. I think up to ten? Then start looking at portfolio loans or commercial loans...

@Tom Ott: Thanks for the warm welcome!

@Nicholas Armstrong :  I appreciate the welcome!

@Curtis Fergus : I Appreciate the answer! Regarding the 20% down payment, if my next property is a live-in house hack to rehab and then rent would I still be required to put 20% down or would this be a standard 3.5% down with a conventional loan? Just want to understand how owner vs. non-owner occupied changes the down payment. Does non-owner occupied represent a greater risk to a lender? 

@Spencer Taylor : Thanks for the welcome! I am not sure of your overall strategy but do you have any areas of the Salt Lake Valley that you have had the most luck in finding sound deals or areas/cities that you focus on in particular? I just purchased a property in Taylorsville and am looking to see if anyone has had any luck in flipping or renting to quality tenents in other areas of the valley. I see investors snatching homes up like crazy in Taylorsville so I believe this is a good sign?

@Jared McNeel you got it! 3.5 to 5% down for owner occupied depending on the program and lender is typical. Yes lenders see investment properties as more of a risk. Just make sure if you plan on house hacking a rehab to eventually rent out, most lenders require you to live there for atleast a year, but you will still want to buy at a deep enough discount that you keep that debt to income ratio solid when it comes time to rent... catch 22 is that if you are looking to buy a fixer upper with FHA to live in, it does need to meet their guidelines before they will lend on it. I guess I'm saying it's challenging to pull it off correctly with a 3.5% down approach, unless of course you find just the right deal! Always make your money when you buy!

Welcome @Jared McNeel !

Have you considered doing wholesaling to help fund rental properties? This is what I am currently doing since I don't have a W-2 income right now. Using the profits from wholesaling to be able to either purchase outright or put a large down payment to increase the chance of getting funding.

I would also consider reading @Brandon Turner 's book "The book on Investing in Real Estate with no and low Money down". There are a lot of creative ways to get funding for properties! Great book for beginners as well.

Good luck with your REI venture!

Welcome @Jared McNeel those are realistic goals that I too had troubles with, it almost seems like once you get your first deal, then it all lines up.

Welcome @Jared McNeel to BP. I would encourage you to do some searching around on the site, tons of great info here. Yes, network as much as you can. Having your dad as a general contractor could be a big help as well on properties.

@Justin Dossey : That is defintely a book that has been on my list! Thanks for reminding me to get it.. I have good W-2 income but haven't looked into wholesaling. I will have to do more digging. Thanks for the welcome!

@Curtis Fergus : Thanks man! One more question, do you attend any REIA groups in the Salt Lake area? I want to know which ones are worth my time.

@Andrew Syrios : Thanks for the welcome! Good luck in your ventures as well.

@Matt Motil : Hey Matt, great I'm hoping to be able to get all lined up sometime in the future.! My first property was very shakey, probably because I'm new at this whole thing. Thanks for the great words of advice!

@Bryan K.: Thanks Bryan!

@Jared McNeel

Welcome to the BP family! Good to have you here! Here are some recommendations for you:

Find and connect with other BP members that are in your area: http://www.biggerpockets.com/meet
Set up keyword alerts to be notified of the topics that interest you: http://www.biggerpockets.com/alerts
Read Beginner’s Guide: http://www.biggerpockets.com/real-estate-investing
Check out BP Podcasts: http://www.biggerpockets.com/renewsblog/category/podcast/

Wishing you the best!

@Jared McNeel What a great goal! I’m just a little ahead of you and own 2 rentals currently. The renters have been great and I have some tips from the property management company I work with that I would be happy to share. I just put money down on another Edge Homes townhome and its the best investment other than FIG that I have been able to find in Utah. Good luck!!

Good job Jared.
You are on to a good start.
Learn everything on biggerpockets and definitely use the rental calculator.

I️ am also a newbie, just made an offer seller financing in IN.
2 units for 89k simple terms.
I️ offered 75k with a lower rate. Only hv to but 10k down. 2 units total rents 1,100

Bigger pockets out there. Do u think this is a good deal.

Maybe Brandon advise.
I️ listen to podcast everyday. And thought of what Brandon said, have faith and go for it, only if the #’s make sense, if Not accepted move to the next one.

Aku Thomas

@Aku Thomas Thanks Aku for the welcome!  Does the rental calculator give the numbers you provided a green light to move forward? Keep me posted on the deal going forward I would like to see if you get the property or not. I would love to get into multi-family units one day. That's were the $$$ is!

Seller seems nice and is willing to work with me. l input all #’ on the calculator on her terms, l was not marking cash flow.

So l changes the rate, reduced the amount and it looked better for me.

If she accepts it, l will move forward.

What is out there for 4 plex in Utah.

That is my next move.

Let me know.

Thx

Aku

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you