All Forum Posts by: Duane Richards

@Eric Moreno, we've been looking at our next steps in Utah, and are finding with rising prices, it's hard to get a multi-unit that cash flows enough to cover CapEx and the debt service. There is a group called FIG (Fourplex Investment Group) that we've been considering, and for about 150-200k, you can get into a construction project that has some pretty decent returns all wrapped up with property management included. We haven't bitten the bullet yet, because we are a bit short on capital after our investments this year (4 townhomes in Utah county), but we're on their mailing list! Check them out at fig.us - I'm not advertising for them, but I am interested in what others think about them!

Just from our perspective, we agree with @Tom Patton and the "cash flow" principle, and that's what I'm looking for in all my investments. Appreciation is nice, but the cash flow on your first duplex is impressive!

@Brandon Pace unfortunately, all our financing has been our own capital at 20-25% down per unit. We liquidated some other investments to diversify, but we are in the same position now. We really want to move on more properties, but if you're not house hacking where you can get in at 5% down, it's more of a waiting game. We are hoping our cash flow and appreciation may put us in a position for another purchase next year, either through saving up and/or HELOC/refi on existing properties to roll forward to increase our portfolio.

We are looking for a unit or two that would be scheduled to "be built" sometime in mid-2021, as the prices keep rising. Hopefully by the time the new build is complete, we "should" be able to come up with the deposit, finance it and close. We've thought about rehabs where we might be able finance more of it based on ARV, but for now, we aren't going to stray from our model.

Interesting @Drew Whitehead - Portfolio purchases would be one way to potentially capture the cash flow, but 55K/mo is a steep bill. I've seen a few for sale through the Utah REIA, but they're all out of state. There was an 8 home one up for sale a while back that had really decent cash flow, but the price was a bit out of my reach, and wasn't sure I wanted to dive into Kansas City, MO just yet.

You could always keep an eye on BP marketplace to see if anyone is looking to sell, otherwise, if your flipping can manage to pay back the loan, it would be a good way to go.

@Drew Whitehead if you're under 1% on the loan, I guess part of the opportunities would be determined by the term of the loan as well (how soon do you have to pay it back, does the rate adjust, is there a balloon pmt, etc.). But I was just looking at my Utah County portfolio numbers ant they're returning 10.2%. Not amazing compared to some posts on BP, but for me, it's great and I'm happily keeping up with my Fundrise investment return.

My question is, if you can find portfolios or any investment that returns more than 1% (almost everything besides a regular savings account), why wouldn't you invest and leverage that amazing debt to increase your assets in any way possible? I definitely wouldn't use it to pay off your duplex as long as it's a cash flowing property with debt service in place. 

I was looking at newly developing apartment complexes up in SL county and was kicking myself that I didn't have 200k to invest - returns were at 14% with current tenancy, and projected to be 25% once all units were complete. With enough cash to invest, I would definitely look at multi-family - check out the FIG group here (fig.us) as an example, we've been communicating with them as well as an option for our future investments.

If you're willing to share, I'm sure all of us would be interested in your financial source of such an incredibly low rate loan!

@Spencer Hatfield sounds like a really good plan. We got into a few of ours thanks to a HELOC on our home. Now with rates so low, we're refinancing to put it all back in our primary at an incredibly low fixed rate. Then we'll open another HELOC for some cushion money and look for more opportunities to invest!

We haven't completely discounted Vineyard - in fact there is an Edge development (called "Lakefront") that has some potential for SFR townhomes now that rent is increasing in that area. So we're keeping our eyes open!

Welcome @Lukas J Ridd, always glad to hear about investors in Utah! We have found that most multi-unit properties for sale set their price right at the limit of rent income (with a 20% down), so your P+I at asking price tends to be barely covered. If there is CapEx and rent vacancy to account for, you'd actually be negative cash flow. There have been a few triplex units for sale in Salt Lake we've seen over the last few months that come closer, but they seem to need a lot more work. If you're not afraid of that, then this might be an option. Plus, if you're living in one, you may be OK with a slightly lower margin as long as the other renters are helping you cover the debt service.

Good luck to you!

@Spencer Hatfield, I'm interested in your Vineyard investment numbers. We've seen a few 4plex sales going on, but the prices and HOA fees seem too steep to actually make cashflow possible without a higher deposit. Are you also saying that if we purchase a 4plex, we couldn't rent out all 4 units without owner-occupancy in at least one?

Hi @Val Choban - for our rentals so far, Rentler.com is almost all we've needed. They actually publish listings to some of our most popular listing sites, like ksl.com (huge for Utah/Idaho) and Facebook Marketplace. I did try Craigslist on one listing, and got a single inquiry from it, but almost all my traffic came from Facebook Marketplace and KSL.com through the Rentler lists.

@Kristyn Morgan, do you mean the actual property tax from the county and state? It won't be any different than if you lived in it yourself. Interest rates change on your loan if it's an "investment" property. You can look at different city web sites to track down percentages, but they're all based on valuation (not appraised value). For example, our Highland TH appraised for $429k, but the tax appraisal came through the other day at $212k, with a "residential exemption" of -$95,400, not even sure what that is. However, the tax rates I've snapshotted for you below to get an idea. You can call the city (Vineyard or Orem?) to get rates for most of these I believe.

Good point @Robert Gilstrap, I should have said that this is the number the Prop Mgmt groups told me were their baselines for St. George, based on number of rentals available in the area. Weekends and holidays are much much higher.