UT (utah) · Member since 2018 · 15 posts · 4 votes
Hey Utah BP members!
Nice to meet you all. I’ve had this account for awhile. I’ve just been keeping current while I finish PA school. Now I’m hoping to add more to this forum.
Been analyzing deals and trying to find my niche I want to start in and boy is the Utah market a tough/ intimidating one to get into.
Right now I'm thinking of a house hack in a SFH with possible basements that could be renovated into a MIL-A (finished or unfinished) maybe with an FHA loan or FHA 203k. Admittedly I don't know where the numbers will work, I'm pushing margins in the salt lake valley and nothing I've analyzed yet is giving me the COC that I would like or feel comfortable with.
Curious to learn from others who have been successful and use this time as a learning period and really use it to hit the ground running when my partner and I eventually pull the trigger!
Real Estate Broker · Lehi, UT · Member since 2016 · 397 posts · 318 votes
5y
@Logan M. I bought some new duplexes in Show Low awhile back that have been fantastic. We also built a new fourplex in Florida this year and are under contract on a few more to be done there.
This probably isn't the answer you're looking for, but this year I couldn't find a place relatively close to where I live (Layton area) to buy investment properties that cash flowed. I ended up going out of state to Alabama. If you are comfortable with investing out of state you'll be able to find a bigger pool of opportunities
UT (utah) · Member since 2018 · 15 posts · 4 votes
5y
@Robert Hansen I kind of got that feeling. I have been looking at Nebraska since I lived there the past year and the Midwest seems like a reasonable place.
What kind of hurdles did you have to work through investing out of state? Ie finding realtor, property manager
@Carlin Barney, Once I decided to invest in Alabama I used BP as a way to connect with a handful of active realtors that were interested in working with me. They gave me some ideas about what areas they recommend and what prices I should be looking for. I leveraged the realtor and other local investors on BP to find a few names for contractors, home inspectors, and property managers. I bought my first SFR and had a tenant in place and was within a week of closing on my second place before I decided to fly out there and check out the different neighborhoods and meet the people I'd been working with.
If I did it all again I'm not sure if I would have done anything much different
Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
5y
Hi Carlin - I have had a single townhouse rental in Salt Lake (Herriman) for 4 years now. I have been actively searching for my second and third in the valley for over a year now and cannot find anything that makes sense. Utah's market is crazy!! Have been looking as far south as Spanish Fork. I have also just started looking into the Midwest and it's looking much more promising. The house hack would be your best bet for Utah. Good luck!!
UT (utah) · Member since 2018 · 15 posts · 4 votes
5y
ya I mean, it’s just crazy in Utah right now. It’s promising though because it checks some major boxes. Good remnants (most the time) projected growth is excellent especially in the point of the mountain areas on both sides of Utah lake. It’s just going to take a little more work than most other areas.
im going to have to really spend time looking in Omaha and Lincoln now. Nebraska is home away from home and such a fun town
Hi Carlin - I have had a single townhouse rental in Salt Lake (Herriman) for 4 years now. I have been actively searching for my second and third in the valley for over a year now and cannot find anything that makes sense. Utah's market is crazy!! Have been looking as far south as Spanish Fork. I have also just started looking into the Midwest and it's looking much more promising. The house hack would be your best bet for Utah. Good luck!!
Real Estate Broker · Lehi, UT · Member since 2016 · 397 posts · 318 votes
5y
@Carlin Barney If you need a place to live as well and are open to the idea, then you can't beat a house hack. If your CoC is your most important metric, then you'll be hard pressed to find a better return. For example, finishing my basement and renting it out gave me an incredible CoC return. It costed me about 45k to cut in my entrance and finish my basement. It is furnished and I rent it out monthly or as a short term rental and consistently make around $1600/month and have even made as much as $2000/month. That gives me over a 40% CoC return! I don't get that return even on my out of state investments! But if you take a house hack out of the picture, then I am definitely finding better returns in my out of state investments.
UT (utah) · Member since 2018 · 15 posts · 4 votes
5y
@Amy Kendall I’m sure you got some great deals being a Real estate agent. Especially considering that the Lehi area is blowing up right now. I have been playing with the idea of a house hack for sure. Even trying to get creative like you and find houses that would be pretty easy to cut a basement entrance into.
I’d be curious to know what you look for in a good deal in the Utah county area since it seems to be your bread and butter. I mean for a 3 bed two bath with an unfinished basement is gonna run me what, 400k in that area? Plus another 10 k to cut in a basement and then 25-40k for finishing and furnishing the basement?
@Carlin Barney I bought 3 houses in Montgomery. I paid cash for them but I'll probably try to do a cash out refinance for all 3 in 2021. The problem with doing that is the refinance would be so small that it might be difficult finding a lender willing to do it.
Investor · USA · Member since 2015 · 325 posts · 447 votes
5y
@Carlin Barney
I would think Utah would be a brutal place to invest. Lots of young, ambitious, and talented guys coming off the mission ready to take over the world... this is the only market I would probably pass on.
Real Estate Broker · Lehi, UT · Member since 2016 · 397 posts · 318 votes
5y
@Carlin Barney I would say that you are pretty accurate with your estimation there, depending on what square footage and the age of the property. A couple I am working with just went under contract on a house with a finished basement apartment in Provo for 360k, but it's a smaller place with a 2bed/1bath upstairs and 1bed/1bath downstairs. So, I think you are right in the ballpark of what you could buy one for and either finish it yourself or have it already finished. I haven't heard great things about the FHA203k loans. I have heard they can require a lot of time and paperwork and the bank can be slow in dispersing the funds, which in turn can lead to unhappy contractors, etc. But that is just what I have heard, and I have not personally used one myself.
Personally, I have been investing out of state as well as here locally. I have got some amazing appreciation over the years in the properties I bought here, and I have done some exchanges into bigger and newer properties here that maintain or improve my cash flow and set up me to still benefit from the growth here in Utah. I also enjoy being close to my properties and having my network of contractors available, but my out of state properties do offer a better CoC return right now and have also worked out really well.
Real Estate Broker · Lehi, UT · Member since 2016 · 397 posts · 318 votes
5y
@Logan M. I bought some new duplexes in Show Low awhile back that have been fantastic. We also built a new fourplex in Florida this year and are under contract on a few more to be done there.
Real Estate Agent · Lehi, UT · Member since 2019 · 27 posts · 21 votes
5y
@Carlin Barney, if you're thinking about a house hack in Utah or Salt Lake county, that's one of my specialties. I've done it with 3 different homes personally (still own all 3), and have helped numerous clients do the same thing. Feel free to give me a call/text and we can chat about a few strategies and what your numbers could look like. (385) 292-1133
@Carlin Barney If you need a place to live as well and are open to the idea, then you can't beat a house hack. If your CoC is your most important metric, then you'll be hard pressed to find a better return. For example, finishing my basement and renting it out gave me an incredible CoC return. It costed me about 45k to cut in my entrance and finish my basement. It is furnished and I rent it out monthly or as a short term rental and consistently make around $1600/month and have even made as much as $2000/month. That gives me over a 40% CoC return! I don't get that return even on my out of state investments! But if you take a house hack out of the picture, then I am definitely finding better returns in my out of state investments.
Hi @Amy Kendall - I'm curious; are ADUs used much in Utah as a "plan B" for RE investing? Are local authorities willing to allow them?
@Logan M. I bought some new duplexes in Show Low awhile back that have been fantastic. We also built a new fourplex in Florida this year and are under contract on a few more to be done there.
Someone after my own heart; I'm not so sure rehabs are all that great of an idea if you're not planning on doing the work yourself. The contractor pool seems to be a bit of an Achilles heel in a hot construction market.
Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
5y
@Chip Marce I have a few decent ones but its hard to find the right margins without being the one finding the deal personally. For example wholesalers make almost as much if not more than the person doing the rehab right now.
Real Estate Broker · Lehi, UT · Member since 2016 · 397 posts · 318 votes
5y
@Account Closed I think the ADUs and MILs are a pretty popular option for people right now. It's always best to check with the local city to see what they are allowing, but most cities seem to be open to them. For finishing my basement and making it a legal accessory apartment here in Lehi, it wasn't too difficult a process to go through.
Investor · Eagle Mountain, UT · Member since 2020 · 7 posts · 3 votes
5y
@Carlin Barney nice to see another Barney here, and also in Utah!
We’ve been really lucky w getting into our primary residences at good times here (2012 and again in 2018) but for rental properties along the Wasatch Front, you’re gonna be looking in Ogden or West Valley/Magna. That’s really about it if you want to be anywhere near the 1% rule.
For this reason, we’re looking out of state for investments.
Investor · 84123 · Member since 2020 · 50 posts · 27 votes
5y
I started investing in the SLC area 2 years ago. I bought my first invest property with $90,000 down payment 2 years ago it is 3 plex and it has made me around $200 - $300 a month after expenses. With a loan pay down of around $350 each month and saved me on my personal taxes. I list it for sell last month and 2 weeks ago sign a max offer on it and will make me $74,000 on the deal. I feel great about the money I made on the deal. Going to 1031 exchange it into a large property with some other investors. I don't feel Utah is the place for huge Cash Flow opportunities but great for appreciation.
New to Real Estate · Salt Lake CIty · Member since 2020 · 8 posts · 4 votes
5y
@Carlin Barney
The past six months of looking I did consider the FHA203k, with some of the unfinished basements or older homes. I was looking from Kaysville to American Fork. What I found is it's a much longer process and would be hard to use with how competitive the market is. It didn't appeal to my broker as there have been many aftershocks getting approved since Covid, and going into the new year I would expect more hurdles.
Not impossible, especially for off market deals or sellers not in a rush to sale. However if going the FHA route, putting less down and more into the renovation with the idea to refinance would be an alternative for a house hack.