All Forum Posts by: Alan Walker

I've flipped four homes so far this year, all under 300k ARV. Multiple offers on every single one, even in March and April when COVID was just starting to impact things. People who want to live in a property will always pay more than an investor because they are emotionally involved in making it their home. I work with several investors and it comes down to what your long-term strategy is. If an investor's time horizon to sell is 8+ years, they are buying homes at market rate right now. The question I often ask is, "would you buy market rate in 2016 if you could have?". Everyone almost immediately says yes. I remember in 2016 when investors were "waiting for the market to cool down before buying". If an investor is looking for $500/door cashflow, they simply aren't finding it in our market anymore. At least not on day 1. I bought 3 doors in 2016 at market rates and together, they produce 800/month in cashflow now, even though when I bought them, they only produced $100. It's all about perspective and goals. This is still a great market to buy in.

I work with Rize Property Management for all my rentals, in both Salt Lake and Weber counties.  The 10% is well worth it! @Jon Neviaser

I have rentals in both Salt Lake County and in Ogden.  The Ogden market still has opportunity and you have to pay very close attention to the neighborhood when buying.  I use property management for all my rentals so they are on top of tenant screening which also really helps with overall cashflow.  Our market in Utah has shifted from strong cashflow to value-driven in the last 5 years.  Cashflow still happens of course yet you won't find the same cashflow here that you do in the midwest.

Thanks RJ Schmert

@RJ Schmertz and Meredith Burt!

Most banks do rate and term.  If you are refinancing a single-family, you have to be at 80/20, however if you can do 75/25 your rate may be better.

Only Duplex, Triplex, Fourplex, you have to have 25% equity in the property so depending on how much equity you have after rehabs, you may need to bring some money to the table. In my mind, its still work it because how else would you have gotten the property for that original price on the MLS anyway?

I agree with Cherie wholeheartedly.  I'm working with a ton of homebuyers that are focusing on getting single-family homes with a mother-in-law apartment to help supplement the mortgage payment.  Typically these homes are going for single-family residential pricing even with the mother-in-law versus the premium you pay when something is labeled a duplex.  I've had clients "waiting for the market to cool down" and they've been waiting for over 2 years, meanwhile, had they bought at what they thought was overpriced then, they would be experiencing 10-12% appreciation on their homes.  

I'm not proposing anyone buys strictly for appreciation, but many of us are short-sighted on the overall value of a home versus the purchase price.  When you take appreciation, depreciation and debt-paydown into account, buying right now still makes sense.  

What I tell my clients is that right now, "finding the deal" means you actually get to purchase the home. It's all in how you look at it.

I think it depends on how you are adapting BRRR to this market. I 100% agree with Trent, deals are slim and there are a lot of investors looking for them. As an investor and residential realtor, I've both done them and help people buy them.

Unlike Kansas City or Memphis where you can buy a house for a pack of playing cards and some gum, Salt Lake's market is now a value-market.  Too many people for not enough houses.  I think the adaptation happens in a couple ways.

1. How are you buying the property to begin with?
2. Are you going to live in the home ever?

1. I recently did 3 rentals by buying them using hard money from a wholesaler, putting in the repairs money and then doing a "rate and term" refi, which is NOT a Cashout Refi.  This type of Refi doesn't have the 6-12 month waiting period, with the stipulation that you can't pull money out (you can however be reimbursed up to 2k in closing costs). The reason for that is, my repairs typically are done in a couple of months, and I don't want to eat up my equity by holding hard money that long.  My repairs are the money I leave in the deal, for the short-to-medium turn.  So my only contribution to the deal is the repairs, which I consider my down payment.  I'll hold that for a year and then refi for cashout.  I love Biggerpockets, it's been the foundation of my investor knowledge for years.  At times, the articles make it sound like you can just turn around and pull money out.  That may be true in many markets, but as an expert in Utah real estate, I can tell you it does not work that way.

So much of this is driven by an ability to see the big picture, meaning, if I'm holding this for 10 years, and I know I'll pull out money in a year or two to invest in the next property,it'ss considered a BRRR in my book. The only difference is the timeline.

The other thing I realized is that I only have to have the capital for the repairs with this method.  So if I can buy a house with hard money that needs a lighter rehab and still get the same equity for the refi, I can buy more rentals before I've refi-ed my first. This is what I love about real estate, there are so many awesome things we can do as investors.

2. Some of my investor clients are also buying Single Family Homes as owner occupys that have a mother-in-law apartments.  The great thing is that 75% of the income for the MIL counts towards their income ratio.  Their plan is to live in the house for a year or two then go buy another house with a mother in law and keep the old one.  If you did that once every five years you'd have 9 doors!

I hope that helps.  My goal is to help people understand how they can build wealth in this market.

Hi Logan, you may want to check out the Utah Valley Real Estate Investors Association (uvreia dot com).  They have monthly meetings and lunches.  Good place to meet folks you may be able to work for.

In my experience as a realtor, it can hurt resale if the house is on a very busy street.  The speed limit also matters, people are less worried if the speed limit is 25 than 45).  Is there ample backyard or fenced off space in the back? If you can offer a safe place for the kids to play and the street isn't crazy busy, it can still sometimes work.  People are most concerned about kids and pets getting into the busy street.

@Travis Fisher, which direction did you end up going?

@Dan Gustavson, who did you end up going with?