All Forum Posts by: Tobias Falzone

On the financing side of things, I don't think you need 2 years unless you are self employed.  I know that once I had W2 income I could immediately use that to qualify for mortgage financing.  Depending on your income level, qualifying may be the most difficult aspect of your plan.  I would also recommend house hacking, maybe a duplex if you can qualify.  You should be able to talk to a mortgage professional to see what you would qualify for, or use the zillow house affordability calculator to get an idea based on income and debt.  Good Luck!

If you have equity, you should to look at a commercial line of credit or try to get a HELOC. It may be easier to negotiate a longer term loan than a shorter loan, which is why a line of credit may be better for 15 months.

for me I have to balance cash flow and overall return.  There are places in the country where cash flow is low (like Orem), but with 3-4% annual appreciation will outperform high cash flow properties, in areas with little chance of appreciation.  I tend to look at Internal Rate of Return rather than Cash on Cash, but if you need the cash flow to live on, then you have to go where the cash flow is.  If you are sticking to Utah and need cash flow, I would look North of SLC or South of Provo and stick to small multifamily.  I am digging Huntsville Alabama right now if you are looking further afield.

(i am not an accountant, talk to an tax expert about this)

A tax deduction doesn't mean you get it all back.  Say I pay 100$ to repair a fridge in a rental unit, I get a $100 deduction but if my tax rate is 30% then I only get 30$ Back.  I'm still $70 poorer.  I can deduct repairs the same year, but I have to depreciate improvements over 27.5 Years in most cases.  I believe your windows and pipes would fall into the improvement/renovation category.  If I do everything DIY and save 100$ on a repair, I get to keep the $70 I would have spent after taxes.  You just have to ask how much is your time worth.  If you are in a low bracket, it can make sense to DIY, but if you are in the 50%+ bracket, then its not as advantageous. 

I have worked with David Essuman as an Agent in the area.  He owns rental property and should be able to guide you.  

I would look into how much the on site manager has to be legally responsible for. You may be able to take over many of the self managing functions yourself as intended while maintaining a part time onsite manager with a fairly limited role. Not 100% sure how it works but that is how I would try to structure it if I were in your position. Best Tobias

There are a few inexpensive online courses, but Keller Williams sponsors in person courses you can take as well, which will also allow you to network with people in the field.

Make sure to keep at least one credit account active after you sell and pay off the house.  If you pay off everything and don't have active accounts with on time payments, your credit won't bounce back as quickly.

@Kimberlee Kennedy Ogden is definitely up and coming.  In these types of neighborhoods there will pretty much always be old & new side by side, you have to approach it street by street and understand how cities change over time.  Ogden is investing heavily in the central city and paying money to owners of multifamily units to convert them back to single family homes.  The reduced density will alleviate a lot of the petty crime problems in those areas and as investors spruce up the neighborhood I think central ogden will begin to look and feel a lot more like the nicer parts of the city.  While it is true there are some upgrades people won't pay for, but everyone will pay a little more for a clean and nice place to live.  I view the central part of Ogden as a great long term value play with increasing demand and decreasing supply.  Rents are increasing and while SLC may always be more expensive, I think Ogden has a lot of room for increased property values and rents.

I'm not sure how you get to $1,000/mo in cash flow. I'm seeing $2550 total income. Using 5% vacancy, 8% maintenance, 12% Capex, 10% property management we are down to $1657/mo long term minus mortgage of 1239$/mo and you are down to 418$/mo. Not sure about property taxes, say .8%? (2520$) and another 900/year for insurance gets me to about $1596 per year in cash flow (133/mo). Now, you are also getting mortage paydown, tax benefits, and likely appreciation, so the investment may still work, but I think your cash flow is NOT going to be great right out of the gate. You would have to do some more work to figure out how much ROI you would get on improving the property to get higher rents. I would feel more secure with at least $600 in cashflow from a 4 plex.