All Forum Posts by: Rebecca Belnap

Welcome.  Utah has a very active investor community so there are plenty of meetups and lots of bigger pocket members to chat with.  House hacking works very well, and there are several loan programs that will help you do it with low money down, and one that is no money down for a duplex.  The tricky part is finding a good multi-family that cashflows in this market.  You have to be careful about self promotion on the site, so I will put in a plug for them.  Both @Sam Levin and @Becca Summers are good realtors who understand investing and won't look at you cluelessly when you say "House Hack".  

If I had it to do over again, I would have changed a lot.  Instead of keeping it as a home, I would have converted it to a business with a store front.  I would have been able to get away with not buying the neighbor's land since the building had been there for 80 years, but I still think I would have paid the fee to buy it and make it legal.  I would have turned the front yard into a parking lot and Rented it for about $800 per month then, about $1200 per month now.  This was in 1999 and by now we would have it paid off in full and cash flowing nicely.  Even with the costs to tie into the cities water and sewer lines, it makes a better rental than a flip.  But it is always easier to see it after the fact.  

On my first flip, we bought a bank owned property for about $45,000.  Our plan was to sell it for $80,000 and make a $25,000 profit.  We did all of the work that we could ourselves thinking that we would save money, so it took 10 months before we had it sold.  It was right next to a freeway overpass that went over the largest street in the city and some train tracks.  It had a well and a septic tank system all on .04 acres.  Our buyers were smarter than us and decided they wanted a survey so they could put up a fence to protect the kids from the busy road.  The result of the survey was that only the front yard and 1/4th of the house was on our property; the rest was on the neighbor's land.  I took my mentally handicapped child to the appointment to meet with the neighbor to talk about buying the land from her.  She had us over a barrel and she knew it, but after some negotiations, she and the surveyor met us at the property and she strung a line along the path of what she was willing to sell us for $10,000.  After $2500 in survey costs and recording fees, we were able to close and sell the home (6 months before the new owners had trouble with the septic leach field that was still on the neighbor's property).  

The buyers bought it for $92,000 and our final profit was about $8000.  So we made $800 per month as our only job. Yes, we went into credit card debt to buy groceries, gas, and even to pay our own mortgage.  We LEARNED!  The next home we had seller financing and made a $24,000 profit.  Still made a lot of mistakes, but less mistakes and less serious ones.

The main thing new investors need to understand is that it will take more cash than they think.  You will likely go over budget and need a safety net.  When you use other people's money, you still need to respect it as if it were your own since you will want to use their money again for the next project.  Poor returns can shut down your credit line.

Short answer:  If you break even on the first one you are doing well.  Always have 2 to 3 exit strategies.  If you can't sell it for a profit, can you get long term financing and rent it profitably? Can you Lease Option or seller finance it to improve down payment and cash flow? Would you want to live in it yourself if your home home will sell easier?  Does your city allow airbnb?

America First Credit Union has an 80% LTV on Investment HELOCs. It's the best one that I have found, and I have looked a lot. I don't think you will find 90% unless you are owner occupying.

I haven't heard of a hard equity loan either.

You are talking about a HELOC on your personal residence right? They can often go as high as 100% of your home's equity. It is the non-owner occupied Helocs that are limited to 75 or 80% of appraised value.

@David Dachtera is right.  That new credit utilization when figuring credit scores is really a game changer.  It used to be that your credit score was a snapshot in time and if you paid something off, it Looked as if you never had that high balance.  Now they are showing an average balance on that account over the last 2 years.  Greatly slows the credit repair process.

@Trinette Thompson I have rentals, but have never done vacation rentals.  I did find a good link that talks about it and I thought it might help.

  https://www.homeaway.com/webdav/site/ha/shared/OC%...

@Janette Richan There are several good 100% brokers her in Utah county.  R & R Realty is the one my husband is at and we really like Mike Rowbury, the broker so I recommend you at least talk to him.  He is very good about answering questions and in my opinion he gives as much help as full service brokers who take half.  

I don't think you get leads from any brokerage, but I could be wrong.  

Wherever you go, marketing is key.  There are some good apps that you can give your clients that let them search the mls but it is branded to you so they contact you for a showing and not the listing agent.  Lots of programs CRM programs that auto send emails and remind you of when to contact people.  If you use a system and work, you will be doing very well within a year.

Cats are fine, I have 2.  My neighbor had a pitbull who was one of the nicest best trained animals.  He started barking non-stop one day and we went out to discover that our portable carport we had just bought had blown into their yard and the legs were banging back and forth against their roof.  He watched us take it apart in the wind and gave us no trouble even though we had only really been near him a few times.  

Pets do tend to be less trouble than people.

@Yiftach Ilyov Wow that is a lot of questions.  Although I am not really qualified to answer most of what you are asking, I do know a few things just from having used rental units here in Utah so I will tell you what I know.

We rented from a brand new storage place and they had deep discounts for the first 6 months while they were trying to fill it.  We paid $35 per month each for 2 10 X 10 Units in the temp controlled section.  After 6 months, they stopped giving us discounts and it went up to $79 per month per unit. You may want to consider existing units since they will already be rented.

Climate controlled was a must for us since we had nice furniture in the unit.  Too hot or too cold would warp it.

At all 3 locations I have rented from, they had an apartment for an onsite manager to live in.  It was part of their pay to have an apartment.  At 2 of the places the manager had a dog that would patrol the lot at night.

I believe that they said they had a regular contract with pest control to deal with Roaches since it is such a common problem for them to spread from unit to unit.

We found 2 of the places from their billboard ads and the other one we found online.

@Carlos Nunez I charge an extra $300 deposit and $25 per pet fee with a maximum of 2 pets.  But I also only have it on homes without new carpet.  We currently have 3 units with pets, and in all 3, they have carpet that is more than 20 years old.  I specifically listed on KSL that we allow pets, because at the time I didn't have the cash to replace the carpet.  The new tenants were thrilled and understood that they would not be getting new carpet, but that the deposit would be to cover any wall damage only and they were off the hook for carpet problems other than the cleaning that I would expect all human tenants to do.