I started my real estate journey at the age of 22 when I learned that real estate can be a great form of retirement. I saw the value of real estate in two ways. The first was the value growth of the property and being able to sell the property at some point. The second was the idea of consistent monthly rental income that I could adjust with the market/economy and would really never end. The goal for most investors is to have a low mortgage payment and other expenses to have a positive cash flow (money coming in) opposed to a negative cash flow (money going out). I've developed systems/procedures to ensure the properties are well taken care of, earn as much as possible, and are homes I would feel comfortable living in.
Below are the properties I've purchased over the years, cash flow numbers, and house hacks I did as well my journey of what lead me from one to the next. I love helping folks build a strategy of their own to obtain rental properties, message me and we can build one for you.
1st Property - Condo
My first home I purchased was a small 600 sq ft, 1 Bedroom condo in Utah County. I was so excited to have my own space after living with roommates for years, even if it was pretty small. The only real change I made to this condo was to convert a den that had no windows into a theater room that was just big enough for 2 people. I lived there for about a year and then moved in with someone I was dating at the time and rented it out. This was nice to have the mortgage and utilities paid through the rent.
Cash flow was approximately $350 per month.
Stats: 600 sq ft, 1 Bed, 1 Bath, Living Room, Kitchen, Den(Converted to Theater Room).
First Single Family Home
After a relationship ended I bought a rough fixer upper in Salt Lake County that I ended up living in home for about 5 years with roommates in three of the four bedrooms. When I say rough, I mean it! There was no ceiling in the kitchen, all the electrical and plumbing needed to be replaced as it was aluminum wiring and old steel pipe. It needed the bathrooms redone, kitchen redone, everything painted, all new flooring. Everything needed to be touched. I purchased it from HUD at a discount and did a 203K rehab loan which allowed me to pay a contractor to do a lot of the work and have it included in the loan amount. I was able to do a lot of sweat equity in the property to help the cost and learn a lot in the process. Some of the house hacks I did at this property included taking a closet that was up against the half bath and converting it into a shower, and closing off the downstairs family room to become a bedroom. It is still one of my favorite homes!
Cash flow around $611 per month & value gain $270K.
Stats: 1405 sq ft, Purchased as 3 Bed, 1.5 Bath, Living Room, Kitchen, Family Room. Post Remodel 4 Bed, 1.75 Bath, Living Room, Kitchen.
1031 Exchange
Near the end of living at that previous home I did a 1031 exchange and sold the Utah County Condo as it was very small and never really going to grow much in value or rental amount. I bought another single family home in Salt Lake County that was overall in pretty good shape. The basement had a family room that I converted into a bedroom, and converted the storage room to a kitchenette. Things that attracted me to the house is that it was quite spacious, had a great yard, ample parking, and had a walk out basement.
Cash flow around $606 per month & value gain $210K.
Stats: 1804 sq ft, Purchased as 4 Bed, 2 Bath, Living Room, Storage Room, Kitchen, Dining Room, Family Room. Post Remodel 5 Bed, 2 Bath, Living Room, Kitchen, Dining Room, Kitchenette.
Dream Home
After having a couple rental properties under my belt, at this point I knew I wanted a bigger home and my own private space. I purchased a home that had the potential to be my dream home. It needed some work but had a great layout and great options for private space. When I moved in, the basement was unfinished and the upstairs living room had the traditional staircase you would use to get to the basement. In trying to find good ideas to separate the basement from upstairs I found an easy solution in flipping the stairs around and closing in the area around them. This allowed potential basement renters to come in through the side garage, to a laundry room, and then down the stairs to the basement. I designed the basement with 4 bedrooms, 2 bathrooms, a full kitchen and separate laundry room, and currently rent by the room.
Cash flow is about $864 a month & value gain $320K
Stats: 3136 sq ft, Purchased as 3 Bed, 2 Bath, Living Room, Laundry Room, Kitchen, Dining Room, Front Room, Unfinished Basement. Post Remodel 7 Bed, 4 Bath, Living Room, 2 Laundry Rooms, 2 Kitchens, Dining Room, Front Room.
Most Recent Rental
In 2022 I purchased another single family home in Salt Lake County that was in great shape and only took a little bit a rehab. After having large rehab projects I wanted some that was closer to move in ready, but every home requires a little bit of work. When I was purchasing the home I was mindful about rental opportunities. I saw the home has space in the basement for a second kitchen, and potential ways to divide the entry to make it two units. The house had a lot of options for future flexibility with already having a walk out basement, ample parking, and 2 full bathrooms. Preliminary plan for this home is to convert the den into a bedroom by taking one of the two closets from the adjoining room by opening the wall in the den, and closing the wall off in the adjoining bedroom. As well converting the large storage room to a kitchen/kitchenette.
Purchasing this home in 2022 with higher interest rates causes a negative cash flow for the time being around $800-$1000 a month. However with real estate being long term, and having mortgages covered with other properties I was ok with the negative cash flow as it's temporary until I can refinance.
Cash flow is about -$800-$1000 a month & little to no value gain yet.
Stats: 1945 sq ft, 4 Bed, 2 Bath, Kitchen, Living Room, Den, Large Storage Room.
Things I had to figure out
Rehab - I've learned how to do tile, how to do electrical, how to do plumbing, proper painting techniques, how to install many types of flooring, how to install baseboard, how to install cabinets and so much more.
Communication - Contractors and tradesmen have a way of communicating that sometimes doesn't seem intuitive to others, when you have a vision in your mind you have to learn how to translate that vision into other peoples language so they can see and understand what you do.
Project Management - Setting a schedule and making a plan, but how to anticipate setbacks and built contingency plans to keep things moving and meeting deadlines. The ability to shift gears and take alternate routes will be key to work through the challenges.
Things I’ve come to know
Things are going to go wrong, don't get angry or upset, plan for them.
There are lots of working professionals or single adults with grown kids who are fantastic roommates. Often times they don’t want to take care of an entire home themselves but take excellent care of the space they rent.
Get a good property manager! I have one that has saved my butt a few times! I have no desire to be the first line of contact with tenants, as well midnight phone calls.
When looking at investment properties, I look for properties that have flexibility to change to fit various needs. Things like flipping stairs, adding a kitchen/bathroom, parking situations etc.
Look for creative financing options. Partnering with a good lender who can help you strategize and plan for the next property is key!
Mortgages can be expensive, I don’t know how people pay their own mortgages. I always look for creative ways to have my mortgages paid for.
Message me today to see what your rental property journey could look like!
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