All Forum Posts by: Jonathan Escobar

@Race Ostler Yeah I know that that is what rents are going for a fourplex. What I would do to raise rents though is to rent by the room. Provo will allow 3 singles in one unit. Something that I was thinking about doing was to get a 4 plex with 2 bed 1 bath units and sharing one room for $300-$325 and then rent the private room for $350-$375. That would come out to be around $1000 in rent for a 4 plex that costs around $450,000. There is one that I was looking at on the MLS right now but it's priced at $475,000 and has been on the market for 90 ish days. That would drive up the price to rent ratio a lot! That is kind of the only way that it would work in this market. Or you could find a city that would allow 4 singles in one unit. That would be even better for rents. From what I know, there aren't any cities that allow 5 or more people in one unit. Zoning only allows 4 max from what I've seen.

@Kyle J. yeah I found a landlord that is willing to let me do this. I'm just trying to find tenants right now. Singles are more interested in having roommates but couples for obvious reasons aren't so open to the idea. I just figured that since I'm not really home that much, then I should try to lower my living expenses as much as possible as I'm going to school. I don't have very much time to work every week to cover the bills AND have a high savings rate to save up for a down-payment. 

@Cherie Orellana I'm married and the cheapest of the cheap that you can find is $650 for a studio apartment. The only other option is to live with family which my wife doesn't really want to do. So that's why I'm trying to sublease so that I can pretty much get the price of single housing for a couple. We just have to be comfortable with giving up our comfortability haha

@Tyler Ruff We hold this meeting pretty much every first wednesday of the month. You'll see another one around the first week of November.

I'm currently wanting to get a 4-plex and house hack it. At the moment, I am unable to do that. For the time being, my wife and I are just renting until we are in the position to do so. We are renting a 1 bed 1 bath apartment for around $785 a month in Provo UT. An idea came across my mind to help us lower our living expenses. What should I know about subleasing or renting a bigger place and finding renters under my rent contract to pay for more of the rent expense?

Is it a good idea to sublease, and have people done it before to lower their rent expenses? What else should I know before making a plan to put it into action? I know as a landlord, it's probably not a good idea but I really just want to get rid of as much living expenses as possible.

Just from what you've said, it sounds like you have a lot of studying to do. I would first recommend listening to the BP real estate podcast that David Greene and Brandon Turner host. Then read some books on how to House Hack your way to enough Net Worth to even consider a 24 unit apartment complex. House hacking a 4-plex is a very good idea but you need to know the details on how to do it. Learn about the BRRRR Method if you want to do what Calus said. Also search for podcasts that have to do with buying your first deal or house hacking. Once you have a couple of multi family units, you would need to know how to transfer all of the worth of those properties into a bigger deal like a 24 plex using a 1031 tax deferred exchange so you don't pay taxes when you sell the properties that you buy. You're question is too broad to give you super specific tips, so try asking more specific questions once you know what you need to do to reach your goals. Good luck and welcome to the game! You'll do great if you have the drive and desire no matter what others say.

One thing you are going to want to study up on is how to use a 203k loan. This is a combination of FHA and rehab put into one loan. The beauty of this is that you don't have to use your own cash to renovate the property you want to fix up. This will make your monthly payment of the mortgage higher, but not that much compared to the cash required to fix up an entire property. When you put less than 20% down payment, then you will have to pay Mortgage Insurance which also kills cashflow. But if you can do that for a year and live in the property, then when you move out, then you will be able to rent out the space you were living in and hopefully cash flow positive. Learn more about it and get as much information as you can before you just jump into the game. If you make a mistake early on then it can be detrimental to your real estate career. Also study up on the BRRRR method like Tyler was saying. David Greene teaches a lot about that. It's all about making money when you buy meaning you have to find a property that is way below market value in order to get all your money back after a rehab. Hope this helps out.

@Skyler Smith I am not working with anyone right now. But I am in contact with a couple of agents that have me on their automated listings. Always looking for someone who understands the investor mindset and can find me what I'm looking for. I'd be happy to talk and discuss some of my goals with you though. Also do you have any wholesalers that are on bigger pockets that you could recommend me to?

@Brian Garrett thanks! those are some good ideas. Do you know anyone on BP that you could tag in this thread?

Some cities for the rental property would be anywhere in Salt Lake County like Draper, Riverton, Lehi, American Fork, Lindon, Alpine, Highland, West Jordan, Sandy, Herriman, Bluffdale. 

I'm in the Provo area, and I want to network with wholesalers in Utah county. Any suggestions of some people that I can network with? My goal is to find a 4-plex to house hack in the future. I also am looking for a duplex or single family home as a rental property. Also if there are any local REIA's in this area, I would love to know about those as well! I appreciate the help!

I'm currently wanting to get a 4-plex and house hack it. At the moment, I am unable to do that. For the time being, my wife and I are just renting until we are in the position to do so. We are renting a 1 bed 1 bath apartment for around $785 a month in Provo UT. An idea came across my mind to help us lower our living expenses. What if we find a 2 bed 1 bath apartment for around $850-$900 and then sublet out the 2nd room to a single student/professional (not BYU student because of rules. So most likely UVU students or single professionals) and rent out the room for $400-$425 a month? This would decrease our living expenses to $425-$500 a month! We would like to look in Provo, Orem, American Fork, or possibly Springville. 

Things that I think I should look out for are 

1. The zoning laws which I think are 3 unrelated persons in a single unit at a time. (In this situation, would my wife and I be related counting as 1 person? Or are we 3 unrelated persons because we are not related to the hypothetical future tenant? In other words, would we be able to have a married couple + 2 other singles in one unit?)

2. The rules in the specific contract that I have with the landlord to make sure that I don't get evicted if I sublet to another person. (This will include the city laws. I know that you aren't supposed to AirBNB in some cities. I think this is not allowed in Provo. But it would be different because they would be renting from month-to-month and not short-term rental.)

In short, is this a good idea, and have people done it before to lower their rent expenses? What else should I know before making a plan to put it into action?

You cannot have 2 FHA loans in your name at a time. What you might be able to do is if the loan is in your name and you have a relative that wants to go in on it with you then you can put the loan under their name and have 2 FHA loans that way but Jerri Doby cannot have 2 FHA loans in your name at the same time. There are a couple exceptions but you have to ask your lender about that. One is that they have to be like 100 miles away from the first FHA loan property or something like that. But in most cases, you wouldn't be doing that unless you were to move states and manage the first property by long-distance which most beginners don't do.

So if you have a wife or a son who wants to qualify for the 2nd FHA loan then you could do that but remember that they have to have the credit and income to qualify for the FHA backed loan. I think it is 640 credit score minimum and the income depends on the price of the property. Hope this helps :)