All Forum Posts by: Douglas Larson

@Jeremy Robinson

You're at an exciting point in life! You've realized that the good job can only take you so far. REI is a fantastic way to get to the next level. Financial independence and retirement can come quicker with a personal residence that costs less than rent and gives you the upside of building equity. Smart investors also learn to buy assets that pay you, not liabilities that take your money!

Like other investors, I bought my first properties (five SFRs and one condo) while working a full-time job. It's hard to juggle employment while investing, fixing, flipping, landlording, but the good job gives you the ability to borrow at the best rates! That is golden! I think It's Warren Buffet that is credited with the saying, "The easiest way to make a million bucks is to borrow a million and let others pay it back!" That's exactly what we do with real estate! Have fun and maybe we'll see you at the local Bigger pocket's meet-ups or the SLREAI lunch meetings. 

@Hayden Brooks

ditto the remarks by @Jeff Rappaport

Another key is that if you plan to network here on BP, start by fleshing-out your profile. Other investors can help you if they know your experience level, your goals and what skills or education you may have to offer.

Real estate is awesome and each niche has its own good and bad aspects. Wholesaling, flipping rehab-to-rent, turn-key buy&hold, vacant land, Multi-family, commercial.... it's all good, but you can't be an expert in everything. Have fun finding your niche!

@Alysen Gardner

Welcome to BP, the best source for RE investor info...PERIOD. All of the Podcasts are excellent and the other learning resources are a fantastic value. I have been investing for 17 years and I still bought several of Brandon's books!

That said, there is no substitute for getting in the local trenches and meeting pros and other investors. UVREIA might be a good place to network for you. I have attended the UVREIA and SLREIA lunch meet-ups quite a bit over the last 2 years. My business has really increased by building relationships with other investors, agents and trades people in the area.

Have fun and maybe we'll see you around!

Hi @Nate Julian

My thoughts on Ogden . . . Run Away!

I know a lot of investors that have lost money (and their faith in humanity) in Ogden and I am very skittish on that town. I have wholesaled a couple homes up there but I don't want to actually spend time there rehabbing or landlording. However, that's exactly the reason NOT to talk to me. Definitely hook up with someone like @Mike Gallagherabove, who has had success there. 

Also see this  - great discussion on the good, bad and ugly! Also, please note that Ogden recently made the . 

Have fun and keep us posted!

@Cindy Petersen

Aloha! - Any market can be good for flips if you've got some skills, good subs, a little cash, access to credit, and some knowledge about the market. If you want to flip on Oahu windward, you can find 'em! It will definitely cost you more than in Utah though! @Michael Mazzella looks like a good friend to have over there!!! Look out Donald Trump!  

I lived on Oahu for several years but moved to maui in 2000 and flipped 5 homes there over a 5-year period. There are always people in expensive markets that appreciate turn-key homes! That's a lot more fun than rehabbing junker homes in west Salt Lake City. I've done that many times too! Here, on the west side you can buy fixers for 130K, invest 20K and sell for 180K. It's a solid base hit with less out of pocket and risk, but not very sexy. SLC east side can range from 250K and up and retail prices can make the work worthwhile. 

When I first moved to SLC, eleven years ago, I started looking for deals in Park City. As a resort market, it just made sense to me because I had just come from Maui. I rehabbed a few rentals and flipped several properties there. Again, the expensive communities attract buyers that want something nice - not a project! Purchase price now in Park City might be 650K for a small, older home that needs a lot of work. Condos can start much lower but they're still pricey.

I'm originally from San Diego (another expensive market) and it's the same there too. You can buy a home for 450K that needs a gut job, but after 60K invested you can net 80K+ on one deal. I did a couple of those in 2010/2011. Close to the coast you'll pay 850K for an ugly house, but retail can be 1.2M. 

If you are really determined to come to Utah to flip, there are opportunities in all price points, but long-distance flipping ain't easy!...then again....Eddie would go! 

If you send me a private message I can recommend a couple agents here, including Steve, who posted above!

Have fun!

Hi @Steve Theobald Thanks for this thread! Usually I have 2 cents to share but this time I'm throwing down a whole nickel, for what it's worth.

I keep hearing a lot of investors feeling very nervous and expecting a big price drop any moment along the Wasatch Front area of Utah. I just don't see that anytime soon. It's my personal belief that we will have a minimum of 2 to 3 years of high demand and price appreciation of 5 to 10%, especially under 250 - 275K.

Reasons:
1. Supply and Demand.
Demand is high, especially in that lower end and supply is low.  

Builders can build, but not in that lower Price range unless it's a condo or townhome. I wouldn't buy higher-priced condos right now but SFRs, under 250K … Absolutely!

2. Part of demand is population growth and the population in Utah is growing at twice the national average. 200,000 net new people in the last 4 years and another 200,000 more expected in the next 4 years! - most of those will be along the Wasatch Front. New households are being formed and first-time buyers are pushing growing families into their second homes. There is a lot of talk about Millennials not getting married and forming traditional households, but that trend is just not that strong in Utah. Some things I have enjoyed about Utah over the past 11 years are the strong family values and traditional biases. 

3. It is cheaper to buy than to rent, especially under that 250K price tag. Example: A 250K home with a mortgage is a PITI of about $1500 a month. Rent would be 1600 - 1800. A 175K home would have a mortgage of about $1200 PITI but rent would be $1300. People who can buy, will buy.

4. Jobs. Utah has jobs, and in fact is in the top 5-10% of all economic and employment statistic of all the 50 states. Facts: Utah unemployment Rate – 3.4%, National Average - 5.5%, Job Growth in Utah projected at 2.8%, National Average 1.3%

5. Interest rates… Everyone has been saying for the last 10 years that interest rates will rise any day now. That may be happening, but banks and the government always get creative in packaging loan products. ARMs, interest-only, and some of you remember the negative amortization loans a few years ago that got a lot of people in trouble. They probably won't do those same things again but they will think of something! They always do.

6. Prices on the east and west coasts are getting crazy, and when that happens, people move to cheaper areas and Utahns move back home. I have a cousin from California who, like me, had never lived in Utah but he and his wife sold their California home recently and bought a house free and clear in Utah, with just the equity they had after the sale of their southern cal house. Again, this speaks to demand.

All components of supply and demand point to strong and increasing real estate prices under 250K and probably up to 350K for at least the next 2 to 3 years.

Now, there are always a few wildcards. No one can really predict the future, although we can estimate trends. Some wildcards are:
1. A stock market crash that many say is well overdue. A 10% correction . . . No Big Deal. A 40% drop? . . . Yikes! -who knows?!? When consumers and lenders lose money they tend to stop buying and lending.

2. Politics - I don't see huge changes to economics or policy unless Trump or Sanders take the White House. The rest are politicians and won't rock the boat too much. Trump though has made some crazy promises about foreign policy and exporting millions of people. whether or not you think that's a good idea, it could have major, unexpected consequences. Sanders has made some equally bold promises but on the other side of the spectrum and who knows what that will bring if actually implemented.

3. A zombie apocalypse!
I know this sounds like a joke but there's always something crazy looming overhead that "could happen." I was living on Maui when terrorists hi-jacked several planes, including the ones that hit the Twin Towers in New York City. It was devastating to our tourist economy in Hawaii for three months and then things came slowly back to life economically and in the real estate market. If two or three attacks like that would've happened one after another every couple months… Who knows?

Terrorists?… Aliens?… Zombies?… Who knows?

However, if you live your life, never taking any risk because of a potential zombie apocalypse you are not likely to actually live a life at all.

After all that, I think we are looking pretty strong in Utah, at least for a while!

 I really like the Re-Store (Habitat for Humanity) for a few odds and ends here and there - a few pieces of hardwood trim, a vanity top, a vintage sink or a cool, an old door with character. It is very difficult to get an entire kitchen there that will fit your needs and that will be an upgrade for what you're ripping out! The Re-store is a Salvation Army store for building supplies. They mostly have used, older, outdated stuff. Sometimes they get new, factory-blemished items, scratch and dent appliances or "oops" paint.

Alibaba.com or any Chinese supplier can provide inexpensive flat-pack (ready-to-assemble) cabinets for good prices, but you will wait weeks or months to get the products and if one thing is damaged or incorrect, you will wait weeks or months again. I know several re-habbers that have had their projects held up for weeks (while hard money and other holding costs killed their budget) and they only "saved" a few hundred bucks over the local supplier prices! Not worth it in my opinion. 

Great question @Account Closed

I'm sure many will have an opinion on this. I've been a landlord for 16 years but never more than about 10 properties at once - mostly SFRs. Styles and expectations vary quite a bit by location. I have owned rentals in hawaii, California and Utah from 130K to 700K.

For lower-end rentals I always try to re-paint or re-face cabinetry. If I have to replace, I like oak because it's an inexpensive hardwood that can take some use and abuse. I have purchased Home Depot in-stock cabinets and although the boxes are cheap particle board and the hinges and drawer glides are just ok, they have fared well with standard use. The styles are simple and the doors and even face frames can be replaced by going right back to the big orange box store. Renter's deposits will cover a few repairs. 

When appealing to a more picky rental market I use whatever is in style at the moment from the mid-range price-point in my area. I have used IKEA, HD and Lowes and I once used a flat-pack DIY assembly kitchen from a "Kitchen's To Go" type store. I prefer in-stock, assembled cabinetry so I can exchange quickly if I get a defective or wrong item. Face frames and doors in Birch, Maple, Oak, Hickory and Ash are going to fare much better than soft Alder, MDF or Pine. Expensive plywood boxes are not necessary in my opinion because it's the face-frames and doors/drawer fronts that take the real abuse. Right now in my area of Utah, white shaker-style (craftsman) is the most popular. It may be different in your area but I don't argue with local trends! Designers always want to "make a statement" or "be original" but I just want to attract the most people! I see what's popular and find an affordable version in a decent quality. When the styles change in 5-7 years (and they always do!) I decide whether to re-face or replace at that time. 

For vanities, I use Lowe's and HD equally. Whatever pre-fab units look good and fit the space and current styles are the right choice for me. Don't overthink it. Give people what they are seeing on HGTV or in local home and condo models. Generally, styles tend to change faster than cabinetry gets too beat up to use.  Don't bust your budget but give people what they want now and then re-paint, re-face or replace as needed down the road.

Hope that helps.

Below is a remodeled kitchen I did last year. The original cabinetry was an outdated maple door style. I had this large kitchen painted and re-faced (new doors and drawer fonts) and 2 bathroom vanities too, for about 3k.

Hi @Jenny Wall

I don't live too far from you!

The real question is, "What do you want to do?" What will you do with the money if you sell the 450K house? If you've never lived there you will get whacked with capital gains tax right off, unless you invest the 450K (minus commissions and closing costs) through a 1031 exchange into better cash-flowing properties like some SFRs in West Valley or a 6-plex in Taylorsville. I've got 3 rentals on the west side that I'm all in at about 140K each, and the rents are about $1300 each per month. Those numbers look good on paper compared to your 450K home, but I'm sure my west-side homes offer 3 times the stress! I have had three 600K+ rentals (two in Park City and one on Maui) that did not cash-flow well, but appreciation was awesome!

It's really all about your skills, wants and goals. I personally think that we've got a strong market in Utah for the next couple years. Appreciation could serve you well if you just hang on to the 450K home. On the other hand, if you want to find some cheap west side rentals and be a landlord (times three) the math looks good there too! 

What do you want to do?

@Reed A.

I'm not an agent, but I play one on TV. . . . or maybe not.

I have worked with lots of agents all over Utah, and a few in So Cal and Hawaii. One tip I'll give you is to get pre-qualified by a lender and to know EXACTLY what you are looking for. If you aren't a serious buyer, ready to pull the trigger, you probably won't attract a serious agent that knows his (or her) stuff. If you are clear about your goals, target market and capabilities you should start to network at the local clubs like UVREIA. You will match up with the right people pretty quick.

When I hear newbies at the Salt Lake REIAs or lunch meetings try to find an agent that will "help them find a good deal" I think they are wasting their time. Either another investor (or agent) will sell them a mediocre deal, telling them it's a great one, or they will just be ignored because they are too vague. It's much better for new investors to get a clear understanding of what they want to do and then hone in on a specific price and area. If you tell the agents you meet that you want a flip property in Orem with 50K minimum equity and no older than 1950, but under $180K AND that you have your financing in place, you will be taken seriously and you stand a much better chance of finding the right agent and the right deal.

I hope that helps! Have fun out there!