All Forum Posts by: Ray Loveless

So I'm searching for a Multi family property in Utah, I've contacted some agents and let them know I'm looking.  One agent, who I've worked with for a bit, send me an email stating they have an off market deal and that they've "Attached is the Buyer Broker Agreement so we can represent you and show you the property".  It goes for the next few months.

Its my understanding that if I sign the agreement I have to stick with that agent for the next few months and I can't purchase a property through another agent if another agent brings me a deal.  Is my understanding correct?  Should I sign it?  Would it be "bad form" for me to not sign the agreement sense they've been doing some work for me?   Thanks.

Also, I'm working with a property owner on a  "for sale by owner" on a deal at the moment.. would this agreement affect that deal.

Thanks.

-Ray

@Cherie Orellana, Thanks for the good tips.  So basically you're converting the house into a duplex and renting them out as that?  Are you living in the top unit or renting out both?  I'm looking to do this as well.  How tough is it to get the city to convert a residential home into a multi multi family zone?  Could you provide some more information on this?

@Jackson Pontsler, Unfortunately around here it's very hard to get a cash flowing property.  I'm not sure if you're also seeing that in this area.  I actually don't think I could get that much rent out of the units.  I bet current rents are low right now ( probably around 800/month).  From my experience I bet that I could get 1000/mo out of the units. Build in 1990. 2bed 1 bath. B type property.  Perhaps I could get more..

So, I'm looking at a 4 plex deal in the Lehi, Utah.  A nice area just south of salt lake city.  I'm calculating my expenses and income.   Am I missing anything? 

Purchase Price $500,000.

Monthly expenses

$2,839 principle and interest( 5.5% interest rate over 30 yrs)

$300 taxes

$100 insurance

$800 repairs and cap-x.

$230 water & sewer

$40 garbages.

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$4,309 TOTAL monthly expenses.   I figure I'd have to charge $1077 for rent if I want to break even on the property.  Am I missing any income/expenses.  Thanks!!

-Ray

So here's an update.  the 4 plex conversion would cost anywhere between 25K to 100K.  Depending on what the city would say.  I put my offer in high assuming that the city wouldn't would only require 25K in changes.  I was hoping to get my offer accepted and then get all the conversion details from the city during my inspection period.  If the city would require 100K in changes in order to convert the property I would just back out of the deal then.  Even though I put my offer in well above the asking price I still didn't get the property.. :(  Tough market!!

@Eric Gardiner, It's in odgen. I'm not sure where the city planning office is.

@Eric Gardiner, Thanks I'll have to look at some of the ways I could get "Bit" if I go down this route.  I've typically never touched these types of units.  The city planning office is a 2 hour drive from my location... I'll keep you all updated.

@Corby Goade. Very nice.  If it's not possibly to convert it to a 4 plex I think I probably want to pass on this property... If I want to be legal.

In Utah I recently came across an interesting building I would like to purchase.   From the outside it looks like a typical 2 ded 1 bath 4 plex( 2 doors up stairs, 2 doors down stairs, 4 kitchen, etc).  However it's zoned as a duplex with the city(has 2 gas meters, 2 furnaces, 2 waterheaters).  The property owner currently pays the utilities and it needs some work.  the 2 bottom units are vacant. 

realistically.. I don't think the city would re-classify this property as a 4 plex.  Plus it could be expensive.  Would I be able to legally rent out the property to 4 different families?  I currently rent out some of my properties to students where the the 2 students aren't related.  Can't I do a similar thing with this property?

  This property is a good deal and i'd like to purchase it.  What do you guys think?  Should I steer clear of a property like this?  any Gotcha's I'm missing?  

Thanks!

@Wayne Brooks, @Chris Seveney  Thank you for your reply.  I can't believe i've owned this property for almost 2 year with out insurance!!  I"m gonna take care of this today!!