Spending $100 Million on Real Estate: Provo, Orem, Lehi, and Pleasant Grove Utah [HouseHack Trip 7]

Thanks for having me today, bro. You

were like so helpful. I learned so much.

It was just cool to to see what you do.

Today, we're in Provo and we're going to

look at Provo, Oram, and something else.

I don't know what is the other.

Pleasant Valley, like the one in

California. No, that was Spring Valley.

Anyway, let's see what Utah has to offer

for House Hack. We're super excited. And

there's a little smudge on that lens.

I'm going to clean that off myself.

Welcome to Provo, Utah, where the

population is about 115,000.

But this is crazy. We haven't seen this

before. The median income per capita

income is only $15,970.

Now, that's probably because this is a

college town, which would be good for

the traditional form of house hacking,

which house hack may be open to as well

in the future. Hence why we're here.

Now, poverty rate, and I don't know if

that's because everybody in college is

just deemed to be poor, uh, because the

the per capita income is so low, but the

poverty rate is very high. It's above my

traditional threshold. It's 24.6%.

Now, we're here because it's also next

to other cities that we want to visit

like uh Oram. Uh but uh we'll see. Do

you get a lot of these sort of added on

units out here because they're what

older homes? These are early 19s or Got

it. I see. Yeah. Here you got a whole

another Oh, wow. It's interesting thing.

Here's the problem with with uh if the

entire market is student housing,

there's really no there's nobody

upgrading the homes around you really,

right? And I mean, you can kind of see

that it's everything you're going to get

is going to essentially be that sort of

bare minimum upgrade potentially. You

want to find neighborhoods if you were

going to do room rentals in where you

have a mix of uh homeowners who are

living there and willing to upgrade.

Like I wonder how long I mean this looks

like it just happened. still got the

fresh caut. This happened within the

last few days probably when they listed

this. There probably wasn't a burned

down home right next door to it. Uh so

yeah, it unfortunately burned down their

garage too next door. It's a bummer for

them, but looks like at least they could

still live there. But uh wow. Jeez, this

is a good old crusty one. Brand a brand

new crusty one. It's unfortunate.

But uh you know the one thing that's

actually nice about this, hopefully

obviously nobody was injured. Um, but

now you're going to get a brand new

property right next to you on on this

one. So, you're actually now getting

forced upgrading here presumably, unless

of course they take the money and then

they don't upgrade it. So, you don't

have a guarantee of that. Uh, sometimes

people take the money, you leave it as a

lot and sell it to somebody else. But

eventually, I would imagine somebody

would build something new here. So,

you'll be next to a new place, but then

you've also got construction for a

couple years next to you on this one.

That's something to pay attention to. So

far, I don't like Provo. I'm always very

transparent and about my impressions and

ideally you want to buy the worst house

in the best neighborhoods and on the

best streets. The problem is every house

here is it seems is essentially room

rental. So the reason the valuations go

up is based on room rental cash flow.

See, I like being able to go into a

market where you don't have everyone

doing room rentals. And then what you

actually have is the potential upside of

higher cash flow because it's not built

into the market prices. Everything's

just a single family regular rental when

it's a rental out there. And then if you

decide to turn it into a room rental,

great. You get higher cash flow. But out

here, that's already being priced in to

the price.

And I'm so sorry.

I don't think people are really

motivated to upgrade homes out here

because

what are you going to put on a a nice uh

curb appeal or something? Uh you know,

you're going to do the front yard up.

You're going to get more money for your

room rental. No, not at all. It's not

going to increase the rents at all. So,

why upgrade anything?

The realtors told me Kevin won't like

Provo. There's not a lot of long-term

rental potential here. As I understand,

he's the boss man, though. We got to

listen to the boss man. He wanted to see

houses in Provo. And so, I said, you

know what? Let's show Kevin what he

won't like. And that's exactly what

we're doing here. We are accomplishing

our mission. We love Provo it, but for

long-term rentals, not our ideal market.

Hey, by the way, in case you're

wondering why I'm traveling for real

estate, it's to really become the best

expert in all these various different

markets for househack.com.

That's my real estate startup. We're

currently raising money at a onetoone

valuation for accredited investors. And

if you invest before the month's end,

you get some extra bonus warrants, which

are kind of like call options to invest

more in the future if you want to. You

don't have to learn more about that at

the solicitation at househack.com. But

come April or May here in 2023, we

should be opening up this investment

round to nonacredited investors through

a reggga a which will be very awesome

and we hope you join us in. We'll be

raising money at a onetoone valuation,

which means for every dollar we raise,

that's the valuation of the company. So,

for example, if we raise $50 million,

the company is worth $50 million. So,

you're really not suffering any kind of

brand or company dilution. This is

really rare when uh you're looking at a

startup. Uh so, we're super excited to

be able to offer uh a company and

investments and shares into the company

at that 1:1 valuation. Now, once that

fund raise closes, if our cash flow

projections go the way we're looking, we

might not have to raise money again for

quite a while, maybe not even until we

IPO at some point in the future. And

knock on wood, we're really excited

about the prospects for the company. So,

we'd love to have you aboard on the

journey. Just go to househack.com to

learn more. We'd

love to increase cash flow by doing some

room rentals, but not here.

What makes it different?

Because you can't I don't think you can

really build much equity because

zero

Well, I mean, you build equity

everywhere as as homes appreciate, but I

I every property is a wedge deal. That

means there's no wedge deal, you know?

So, I think that's the harder part is

your buyer here is

an investor who's looking at it going,

"What's the bare minimum I can do?" Your

buyer here is not a home value or or a

home buyer. So, if your buyer is an

investor,

then the quality of the entire area is

going to just continue to decay. Uh, and

and that's that's riskier. You want to

be owning properties

in uh in areas where the majority of the

people are home buyers. And the reality

is 65% of America owns their own home.

So, in most neighborhoods, you're going

to have mostly like 6 out of 10, 7 out

of 10 homes are going to be owned, which

is good. Uh, if you could get into a

neighborhood where eight or nine out of

every 10 homes is owned, usually those

are the most desirable areas. They're

the most desirable homes. They're the

ones that appreciate the best. They're

the ones that sell the fast. They rent

the fast. No uh uh long-term liquidity

issues. You have uh uh tenants who stay

longer. Here, what do you do? You go to

college and you leave. So, it's constant

turnover. Uh uh and not only do you have

that constant turnover turnover, but

there's no incentive to to upgrade these

properties because you're surrounded by

uh uh property owners who only care

about room rentals. And so so it's no

surprise uh there are very very few

properties that are upgraded out here.

So I don't know. I I'm we might cancel

anything else in Provo and just get to

where we want to be, which is Orum.

Well,

I don't know, man. I don't trust the

Zillow rental estimates. And that's what

he wrote on here. We got to talk to a

property manager. I mean, come on, man.

Look at this dude. I got RVs. I got

covered up cars. I got a ton of cars in

the driveways. I got trash over here. I

get it. You know, it's like the the

income's lower here, but it's also the

type of tenant. Uh, so I'm a little

worried about that. RVs over here. Lots

of RVs here. All right, let's go. Let's

get to ORM. Look, I'm sorry. Um, I I

don't even want to put that agent in the

video. I don't want to shout the agent

out. I don't want the agent anywhere in

that video. Like, he has no idea what

he's doing. That's one. Number two,

there's no way we're we would invest

here.

This is terrible, man. I don't even want

to be here. I'm sorry. Understand

exactly why we're not investing in

certain areas because people are also

going to ask us, you know, from from

house hack house hack investors. We have

to be able to defend to institutions and

pension funds or whomever's buying our

portfolios. We have to be able to defend

why certain properties are in our

portfolio. And how can we do that if we

haven't been to the areas we're not

investing in? Oh, we've never been

there. That's why I know we don't know

this. Or what if there's potential

there? Now I know there's not.

So, and I I can explain that.

I I would say sorry, but like I'm glad

we did this.

This was planned.

This is this is part of the design. We

we have to see what doesn't work again

so we can we can explain to investors.

We've been there. Here's why it doesn't

work. Dude, if if Oram is like this, I'm

getting on the jet and I'm going

somewhere else.

Fly somewhere else, dude.

She switches houses like every semester.

That's what I'm talking about. Are you

serious? Are you catching Did you catch

what he just said? She switches houses

every semester. That's exactly like a

landlord's worst freaking nightmare. The

like tenant screening. Uh there's

probably no tenant screening out here,

honestly.

Because they have no credit. They're

right out of high school. They or they

just got off a mission, which is even

worse. Now they're bankrupt. They got

nothing to their name and you're renting

to them.

My gosh. Yeah. I mean, the place is

boarded up. Uh I I I mean, it makes

sense. There's a there's a reason why uh

we generally select markets that have

less than 14% poverty. And uh um yeah, I

think this this was uh this was good.

And now we're going to Where's the first

place? It's in Oram.

Yeah. 12 minutes away.

All right. Perfect. So, is this BYU?

Yeah.

This looks nice. These are academia

rooms.

What did you call it?

Academia.

The hell is that?

Those over there are the academia rooms.

That is the academia cafeteria.

See, this is where all the missionaries

go to get trained.

What?

Yeah. You think they just ship us out

without any training?

Oh, so you have to get indoctrinated

first?

Pretty much.

You got to know how to be a missionary.

So, wait, you go to that building to

learn how to serve your mission

for 6 weeks.

Wow. So, it's like a boot camp for

Mormons. It literally is like religious.

Like you wake up at 6. You wake up like

6:00 a.m. or like 7.

Oh, I get it. You wake up religiously at

6 a.m.

Yeah. And then you have classes and then

you have study and then it's pretty

intense. Yeah. The missionary training

center.

It's pretty much what it is.

Now you're a a certified frontline

Mormon.

Amen.

I was curious why you picked Provo, but

I was like, "All right, let's show him

when he won't."

Now we know. I'm so glad we didn't plan

a whole day in Provo.

I I was scared reading it. I be like, I

wanted to be in Provo all day. I was

like, "Oh gosh, I'm gonna call an

Audible on this one." We're not staying

in Provo.

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Tell me.

Well, yeah. You know, uh yeah. So, what

Well, on that note, how is this area

different from from Provo? Because wow,

that's uh I mean, you basically you

could only do room rentals over there,

huh? That's it. College students.

So, UVU, they've got like 45,000

students.

Okay. All right.

BYU is like 35,000. We got like 80,000

students like packed in this little

area. And honestly,

in Provo for the longest time, it's

starting to branch out, but all of them

would live

just in that south of campus. So,

uh, yeah,

all of them would live right under it

would live right in there.

Okay. And they used to started and we're

like, "Oh, yeah, that makes sense." All

right.

I kept tell I don't know who May is, but

he's he's somewhere in the car there.

I was just like, "Are you sure?" I'm

pretty sure not even ORM's going to be

like what I think you guys are looking

for. I think it's I think you're more

like American Fork, which is kind of up

next up to like Lehi.

So, that sort of distance. Okay.

I think so. I mean, you tell me what you

That might be exactly right. What And

why would you say that? What's

You got a lot of tech. I mean, Utah

County, we're kind of sandwiched between

the the lake and you got the mountain

here. So, we don't have a ton of land,

but you got a lot of tech down here.

You're just going to get a lot more

students because that's the college

campus. That's just how it is.

Yeah.

Um, but the further north you go, you're

going to have Yeah. a lot more

residential stuff. And then you got all

the tech like Adobe, Micron, Texas

Instruments. That's all towards Lehi.

That's all kind of Lehi. So,

I Yeah, if that's

Where do you specialize?

All Utah County.

It's not that far. Yeah, it's not

out here. It's nice. I would hate to be

another place where it's like you can go

2 hours west east. Here it's like north

south. That's all we got to deal with.

So where where would you invest if you

were looking for longer term sort of um

single family

single family appreciation, you know,

something you can uh little fixer uppers

you can build equity in. What where

would you be focusing?

It's really I mean you're not going to

have like a massive difference in Utah

County. You will feel that difference

though closer to Provo just because of

the students. Like you're going to get

more of that. But honestly, anywhere in

this area, you've got we don't have a

lot of land here and all that tech is

just packed in there. Sure, Salt Lake

County, there's, you know, you got a ton

of space in Salt Lake County, but down

here, we've appreciated, I think,

quicker than Salt Lake because

there's just nowhere to go. We're

spilling out around the lake. So, Eagle

Mountain, like it's pretty dead out

there, but there's a lot of development.

A lot of people don't like that drive,

but you you do have uh a lot of us, all

the new developments are out here

because we don't have any more land.

to build over here.

So, they're spilling out down. They've

talked about, I don't know if you've

read into it, they have like the plans,

hopefully they don't do it, but they

have the plans to do like massive

development on the lake.

Uh, fill in parts of the lake basically.

We'll see what they end up doing there.

Okay. Just to expand housing.

I live in Vineyard.

Oh, that's over here. How does that

compare to here?

That is like Vineyard was the fastest

growing city in the nation for like a

period of like 6 months.

Oh, wow. Okay.

Um, and so all of it's kind of been new

in the last seven years.

Gotcha. So, the these are this is sort

of newer construction out here. And then

what would you say uh I mean between

let's say like Pleasant Grove and Oram

and Riverbottom where where here are

your probably best longer term single

family where you'd want to grow

equity? Pleasant Grove. Lyndon Lynon's

kind of it's very small but it's really

nice areas in Lyndon. River Bottoms is

higherend stuff. Um

higher end over here by

higher end river. Yeah.

Is that because it's on the way to

on the way up the canyon? Um I don't

know if that's why it ended up being but

that's just how it is right now. a lot

larger lots, a lot more expensive homes

out that way.

And we're not too far from there now.

Okay.

I mean, don't get me wrong, ORM has a

lot of crazy pockets where it's like all

a sudden like we're in neighborhoods

like this and all a sudden you go to the

next street, it's like, "Oh my gosh,

that's like a $2 million house compared

to like a $400,000 house." And then back

all of a sudden you're back into this

neighborhood and then back into the more

expensive. So, it's very hit and miss.

Got it.

Um I don't know if the college campuses

had anything to do with that over the

years as that's developed.

Got it.

But I would say yeah, you're probably

Pleasant Grove up to Lehi is a lot more.

Okay. More I think of what you guys are

Got it. Got it. So I mean like out here

would you rent these things out longterm

usually or is it all rooms out here as

well? Kind of like

people still do do it. I don't I'm picky

on my numbers.

Okay. So tell me what do you do?

I like like I don't get excited unless

it's 15% cash on cash return. Okay.

Um so

and where are you getting that?

Some of my stuff I don't know what's

going to make it into the final cut

here. Uh, a lot of my stuff I like it in

Provo where I I like for something like

this, I would probably wall this off. If

I can make another unit down there,

great. Like I've got I was telling McKay

I was like I've got like a,400 foot unit

that otherwise at max I'd be able to get

18 17 maybe out of it. But I get 2,700

bucks a month out of it

cuz I each room can almost be chopped up

basically.

I don't even do by the room. I love my

my perfect demographic that I like is

like young married couples and I try to

hit the two bed, one bath units. Oh, I

see. Two bed, one bath. So like in

multif family or

Yeah, it's just basement apartment type

stuff. It's very prevalent. City

obviously doesn't like that. They would,

you know. Yeah. Exactly.

So there is some risk if you're doing

like massive big fund. That's not what

you want to hit, but the returns are

amazing.

Sure. Sure.

Um so that's that's what I like. The

rest of the stuff. Yeah. I don't know

what kind of numbers you like to hit,

but

So I mean you're not only doing

basements. What do you do with the top

of the unit unit then? Or do you just

put try to put

separate just another

Oh, just another unit. Yeah. Yeah.

Okay. So, you're looking at, hey, where

can you maybe buy a single and then

convert the basement basically into

another unit?

A lot of searches I'll do. I'll try to

find out where a single family home

that's just like, hey, basement walk

out. It's it's put in there. It's

basement walkout. I'm like, cool. I just

got to go in. I got to figure out, okay,

here's my plumbing. This is where the

kitchen can go. Wall this off. Done.

We're go. This is a neighborhood where I

know we can get away with it. This is

not a neighborhood where we can get away

with that. So

I see because the neighbors report you

or whatever. Yeah. Yeah. Yeah. Got it.

Got it. Uh so that seems So room rentals

a strategy. The basement I've seen that

a lot in Utah because you have the

basement.

There's a ton. Especially around the

college campuses. Like other places you

do see it, but not like you see it

around the college campus. That makes

sense.

Everybody is doing it.

Now what about uh fixers? How many how

many fixers do you see usually come up?

Uh,

I like working with wholesalers and um I

feel like nobody hits Utah County very

well. There's a few that do Utah County.

I see a lot

wholesalers or buyers?

Wholesalers. Like the amount of

wholesale deals I see come through are

probably

like one to eight up in so one for Utah

County to every eight that I see up in

like Salt Lake County. It's just there's

just more up there. So I think more

people focus on that.

Oh wow. Okay.

Um but I mean there's still stuff down

here that's kind of beat up. You guys

picked an awesome week cuz this is

literally the lowest inventory week of

our entire year. Like this is the week

that we have the lowest. So it was just

like

I was like, "Cay, I looked at all 24

houses on the market. You're seeing the

two that I would have said are more beat

up."

Yeah. Yeah. Yeah. That that's okay. And

they don't have to be perfectly beat up

right now. You know, we're we're still 6

months or so, four to six months from

starting our buys.

Uh it's really the idea is trying to

understand, okay, where where are the

opportunities to invest? And it seems

like if you want

to you could go higher cash flow with

like the basements or room rentals like

you mentioned. But one of the things I'm

noticing is for example in Provo it

seems like the prices already reflect

that you can chop it up and rent out so

many different

rooms. Yeah, there's a lot of

competition down there. So I used to be

uh one of the top I don't do it anymore

because Zillow is kind of it's just

crazy competitive, but I I had a few of

the zip codes. I was the top agent on

Zillow in those zip codes.

And daily it was always a call from some

alumni. I I want to invest over there.

I've got a kid going to school. I'm

gonna put them I'm gonna own it. Have

them rent out to their friends. Have

them in there. Or hey, when we come

visit, I'm just gonna have a place to

stay there. So, you get a lot of that l

we kind of have a unique demographic

with our with the, you know, local

religion here. It's that makes sense.

It there's a lot of people are like, I

we've lived out of state. I want to come

back home now. And so, I've had so many

people like just call to move back home.

Oh, wow. So, you actually are getting

people flowing in. It's not just here

for school. And

I'm from California. You guys have added

a lot but no like I was just with some

guys from Illinois Chicago yesterday and

like they're

moving back to like specifically

they actually want some stuff. We were

looking at some stuff in Orum, but they

were they wanted some stuff for skiing.

But I've had a handful of people are

like, "Hey, my parents," like a lot of

past client um a lot of them are

students. So like, "Hey, my mom, my dad,

they're wanting to move back. They want

to move out to Utah. They want to have a

Utah house to come visit for the BYU

games."

And then they could manage it themselves

as well because they're just doing one

of them because it's just their son or

daughter or whatever living there. Yep.

Yeah. Yeah. I imagine scaling property

management with dozens of students

potentially and on each block gets a

little bit more challenging.

You'll have a lot more shift and

turnover. At least now they do a lot

more year contracts. In the past it used

to be just by the semester. Okay.

And honestly that's a big reason why I'm

like I don't want to do single students

personally. Like sure I can make more

money but the headache and the

turnover. Oh my gosh.

The turnover.

Yeah. I mean the management intensity

too. My gosh. So you found that doing

the the top and the bottom that was is

it management okay neutral? I

I'm okay with that. I love that. Usually

Jack and Sally, young married couple are

not looking to mess up their life too

early. Come in. They're usually great.

The mom and dad are usually, you know,

have rarely had issues with my tenants.

Got it. Got it.

Rarely. So I like they come in and it's

nothing.

And where would you buy those?

I like them all around college around

the college campus. So, is that somewhat

around here as well?

I was I was telling May I was like I've

got a vacant unit right now. I was like

I could if you I don't know know exactly

what you're trying to target but if you

want it's like I can show you this is

exactly what I like to do cuz

I'd love to see exactly what you do.

Yeah, let's do that. I'll do a super

quick walk around here and then let's go

check that out because I'm a big fan of

of understanding okay where you know you

guys know how to make money in your

market better than I do because I've

never been here before even you know. So

what uh

yeah I'd love to see that. So, so this

uh I mean is this your typical kind of

lot size out here? It seems like what

10k square feet or something like that?

They added on out here.

You're about Yeah, there about

I mean there's a lot that's even less

than that.

Sure.

Um

gosh, because this is what 22 acres and

you're you can be a lot of like.12s.

One twos really. I mean down now you're

down to like 5 6,000 square feet. If

you're if you're talking like new

development that we have some houses

that is like literally go two feet off

the house around the whole thing and

that's your that's your lot.

Like hate that maybe more akin to what

you guys get out there. I don't know.

Yeah. Yeah. More zero lot line maybe

almost.

But like older stuff like this you'll

get larger lots. Uh other things. Yeah.

Not not as much.

Now uh is most of your new construction

out where you're living right now? What

was that?

Vineyard vineyard.

There there has been a lot of new

construction. Like I said it used to be

nothing. We went from like 500 residents

to like 30,000 residents in a matter of

a few years.

Gosh.

And there was just a ton out there. Um,

do you get a lot of flippers out here?

Yeah, we have there's tons. I mean, it

got like

flippers everywhere.

Flippers everywhere. But I feel like and

maybe it's the same in California, but I

feel like in the last 5 years like

wholesalers and flippers just started

coming out of the woodworks like crazy.

Oh, I mean you could buy anything, wait

two months, and it was worth 50 more.

Yeah, you're good. It was a good time

for a lot of people. You could you you

could be very not very professional and

make some money for sure.

Now it's it's gotten a little harder.

How has the market been for you guys

just the last I like year really?

Uh we've come down we've come down a

good amount. Um

yeah I mean I'm guessing the same. It

just kind of sucks with the rates. Like

we went from I almost take I I love I

loved like the 40 offer competition.

Like I loved that. I would take that

as an agent. That's fun man.

I would take that over this. Now it's

just like we're not competing with each

other anymore. We're competing with the

rates and the Fed. Like there's not a

whole lot we can do other than twiddle

our thumbs until

just get through it basically.

Seller that can't get through it. We

take the opportunity or not.

Yeah. What about rents? Do you see any

downward pressure on those out here?

Not yet, but I was watching your video

on that and I'm like I'm curious to know

anything that's going to roll over. I I

have like four turnovers for my stuff

right now. So I'm going to see this next

month or so what what that's going to

look like.

But um typically not. I haven't seen

usually at all.

Yeah. So, it's it's just it'll be

interesting to see if we see it now just

because of uh you know the economy every

cycle.

Nobody likes the down part. But

well, we got a lot of tech here. So, and

there has been a lot of tech layoff,

right? So, but I haven't seen that been

wide enough to like actually

change anything on that.

Yeah. I don't think it's almost like a

little bit of weeding. I mean, I hate

using that in reference to people, you

know, cuz people and stuff, but it's

what it is. Business corporate weeding

basically. I'm constantly asking people

like that I know past clients like,

"Hey, how'd it go?" And they're like,

"Oh, yeah, there's a bups here, but no,

none of my department like I'm good."

So,

yeah. Okay.

Maybe I'm just not connected to the

people that are getting laid off. I

don't know.

Where where Yeah. Where is your uh

investment?

So, the most recent one that I

the one that you wanted to show us

right here.

So, we're right here.

Okay. So, that's towards Provo. A little

closer.

8 minutes. Yep. It's literally on the

border. Oh, it's on the border of the

two. Ah, gotcha. Got you. Okay.

I like it. I'm right between both

campuses. I'm like almost equidistant

between both campuses. Not that I picked

it for that.

Okay. I was going to ask that. Numbers,

but you do like being somewhat close to

the universities because you're trying

to find

I know my renter. Like I don't even have

a second like this is bad. And I don't

know what's going to make it in the cut

here, but there's a lot of times where

I'm like I don't even have to screen you

guys. Just wow.

Come on in. Like here's your parents

live up in Alpine is a nicer area. And

I'm like, "Yeah, come on in." Like, "Oh,

wow.

Save save your $25 for the for the

credit screening." I'm like, "Come in."

Like, it makes it super easy. If I was

up further north, I'm going to get like

different people all the time. And

obviously, I wouldn't do that.

But it's very easy to see like, "Oh,

yeah. They're going to school. There

here's your I know exactly what you're

studying." Like, it's not a big deal.

Where's uh where's Alpine?

Alpine's up in the right up here.

Alpine.

Oh, there it is. So above uh Pleasant

Grove basically to Oh, even past Lehi a

little bit.

Yeah, Lehi Highland.

So is that supposed to be pretty

expensive then? Uh

there's some more expensive homes, you

know, it's there there's not everything

out there is incredibly expensive, but

you're just further removed from the

freeway. Again, everything here is like

you're on you're on the freeway.

Yeah. Yeah.

Like it's very quick.

Like you said, just north south. It's

simple.

Yeah. All right. Uh so for people making

money out here, you're either renting

rooms, you're renting like a single

family as a duplex basically potentially

or um or or maybe you're flipping. Where

would the long-term rentals be? You'd

say that would be more Lehigh or

anywhere. I don't like those numbers.

Yeah. Personally, the numbers are

harder. Yeah.

Um but yeah, I mean honestly, anything

is going to rent. Like anything's going

to rent. There's not I mean there's

competition but there's not that much

competition.

What about if you go to Alpine?

Uh you probably have a little bit

further just because you're a little bit

further away from the freeway. Like I

think that's a big draw. Everyone can

get to basically anywhere you want. Like

the majority of Utah's population is

literally in that like hour and a half

stretch between where we're at now and

like up north.

Sure. Salt Lake. Yeah. Exactly. If

you're to Ogden, that's it. There's

there's Utah basically. So, closer to

the freeway obviously will always be I

don't know if it'll necessarily do

better, but it just you're not going to

sit as long if if you're overpriced on

your rent.

Um, but I mean, you're going to find I

haven't seen anybody's like, I can't get

this thing rented because most people

are commuting to uh wherever along and

they just want to hop on the highway.

Yep. Yep. I see.

So, but again, if you're talking like I

want more like I don't want to have like

a bunch of six kids constantly like

trying to rent my place out. You're

going to get that way more here than you

would up north.

Interesting.

Like in in the northern Utah camp.

Ah, got it. You get the applications

that are like, "Hey, we're a group of

six people." I see.

Yeah. It's like, "Can I can me and four

of my buddies come and rent the place?"

And you know, it's like, "No,

I can't say that. I don't want it."

Yeah. Yeah. Okay. All right. Very well.

Let's Let's go see what you're doing.

Let's go to see it.

Hey man, thank you so much for coming

out and shadowing. Shout yourself out.

Tell everyone about you and your YouTube

channel, your business, what and all the

creative things you do, especially the

creative business ownership.

Yeah. So, man, thanks for having me

today, bro. You were like so helpful. I

learned so much. It was just cool to to

see what you do. Um, but yeah, so I'm

Abraham Gray. I have my own YouTube

channel, Abraham Gay. I do a ton of uh

business buying. I do a ton of real

estate. I own hundreds of properties and

I do yeah some business masterminds a

few times a year. But if you follow me

on on YouTube, Abraham Gay, you'll find

out everything. I make a few videos

every single week that talk about how to

buy businesses with no money, how to do

real estate with no money, how to, you

know, build rapport, how to, you know,

better your life. So definitely check it

out.

That's awesome, man. Thank you so much

for coming out here and enjoy your

speaking event this weekend because

that's this weekend, right?

Yeah. Yeah. Yeah. My this weekend. Yeah.

So it's going to be a blast.

That's awesome. Good luck, man. Thanks

for being here. So, this was a duplex.

Interesting scenario on it.

This side does not have a basement. That

one did. Um, currently, and I'm a little

low on mine right now, but um 1450,

1450, and 1450.

Oh, wow. Everything 1450. Okay. Got it.

Wow.

I have some clients that have the same

lay. This is a very common I mean,

that's the same duplex. That's the same

duplex. That's the same duplex. This all

very common layout. I have some tenants

just up here a couple blocks that

getting 1,800 for this same space. And

I'll show you what that space looks

like. This one, this is like my bread

and butter type. It's the two bed, one

bath. I get young married couple in. And

this one's also nicer than some of the

other ones. So,

yeah. I mean, the 2-in faux wood, you've

got the And, you know, it's like a 3 and

1/2 in base. It's nice craftsman style.

I love the floor color you chose. Yeah.

This is great. Yeah. Simple.

Yeah. Know, this is really easy.

Yep.

Yeah. Yeah. You did a good job.

Looks perfect.

I did I did more than I should have and

I knew it, but I was like, whatever. No,

I mean this is great. Yeah.

So, I have some that are like a lot

less. Like I have some there's a

basement unit I have down in Provo. Not

not a super awesome.

I just bought these, too. They're just

this just stick up there.

The tenants put that in. I came like

where did this come from?

Yeah. Yeah. They just I Okay. Yeah. I I

I figured I'd leave it.

May as well. Yeah, that's interesting.

They just stuck it up there. Um, yeah,

it was like a two pack for like 14 bucks

and you could just peel off the back

sticker, stick it on, then you have a a

paper towel holder.

I mean, it was holding good, so I was

like, I'm not going to take it off. I

guess it fits. It works.

It works. Yeah. Wow. Uh, sorry. Okay.

Yeah. Go ahead before yours.

Um, so I was just saying the basement

unit, I got one in Provo, uh, not nearly

as nice as this one, but basement unit.

Yeah.

Literally

gosh, maybe 75% of this size. even lasts

a lot less than this one actually.

Yeah.

Um lot tighter and I'm still getting

like 1250 out of that basement. Wow.

On that one.

Yeah.

So,

okay.

I don't know.

And how long do the tenants usually

stay?

Um

mine typically

a year.

Okay.

Sometimes a little bit more. I've had

people that stay longer.

Right. So, but usually every year you

they're still going to like camp to BYU

and everything or Got it. And honestly,

I'm okay with that because every time I

get a turn it, I live here close by. I

get it. I'm constantly up on my rents

typically.

Well, now you're raising the rent back

to market in an appreciating market.

A lot of mine I actually encourage. I'm

like, "Hey, if you need to leave early,

let me know. Just give me enough heads

up notice

and then as long as I have no days of

vacancy cuz I just know automatically

it's like boom, I get my next rent."

There's the non-refundable portion of

the deposit anyway that I get to keep.

So, I'm like, "Cool. I constantly get to

stay up on my rents and I have to deal

with it."

Yeah. And so what about um well yeah and

because you're doing two in ones, you

don't have a lot of fix up in between

really. You shouldn't have much of it at

all.

Sometimes I like this is this is good

enough. I don't

Yeah.

Nothing. Okay. Next person in

Wow. Uh how about uh like uh any tenant

issues? Do you ever run into just late

or no pays or evictions or what's that

like out here?

Very few.

Few out here.

Very few.

Wow. Like I said, they're usually Jack

and Jill, BYU, UVU couple, and usually

not looking to mess things up in their

life this early. Like they're trying to

actively pursue like a career and be

good, blah, blah, blah.

Yeah. Yeah.

And it's I've had very I've had one,

two, I think

two evictions or I've had no evictions.

I've never had any evictions.

Just two

two people that were just like, "Okay."

And one of them was like, "Hey, we have

to leave." Actually, both told me like,

"Hey, we have to leave early. We can't

make the payment." And both of them were

like within the last month of their

teny.

Oh. And it just disappeared basically.

Yeah.

Self- evicted.

Self- evicted and not not much issue

there. So, no, it's been pretty good.

So, and that's why I do like I do like

this area for that. I mean, I've got

handful of clients that I helped buy in

Salt Lake and was up in Ogden later

earlier this week.

And I don't know, different renter

demographic

in Ogden. So, tell me about that. Why

are they a different renter?

Uh, they live more up there. So, Oh, the

renter demographic.

Yeah. I I don't know. Ogden Ogden is

just kind of like the a cheaper city.

Like pricing up there is a lot cheaper.

Um I I I

cheaper than here.

A lot cheaper than here.

Wow. Okay.

I'm trying to think of like how to make

it put it nicely. Like Ogden is kind of

like a little bit more of like

I'm going to offend people, but like

more like the armpit of Utah. I feel

like it's just there's good places in

Ogden, but there's definitely a lot of

places in there. It's just like this is

kind of like a little bit more rundown.

Got it. So you couldn't universally say

like, oh, great area basically.

Yeah. I mean, I don't know if you could

say that about any area, but for sure

more often than I would say down here.

Okay. But I mean like if you compared it

to say uh and I I don't know that you

sell there, but like Sugar House for

example in Salt Lake.

Salt Lake up around Salt Lake.

Some of that the the eastern side of

Salt Lake seems to be pretty stable.

Oh, that's a nice area. Enjoy that.

So how does Ogden compare to that? Oh, I

mean completely different. You've you've

got way more money Sugar House. Okay.

Yeah. So, you're I've never personally

had tenants in Sugar House, so I

couldn't tell you like how that is

versus Ogden tenants, but I would

imagine I have a lot less issue in Sugar

House than I would in Ogden, depending

depending where I'm at in Ogden.

Yeah. And that's even despite the fact

that you don't have colleges there, but

it's just a different type of town.

I mean, there is one up in Ogden and

they have, but it's I don't can't

remember how many. So, it's Weber State

and I don't remember how many how big

their student body is. But down here

it's like UVU has is the highest student

body campus in Utah and I think Utah is

like second or BYU is Utah BYU is second

or third on that list. So we have just

so many more students than they have

there or even up at Utah State.

Got it. And how about like uh St. George

like uh let's say how how

that there have been a handful of people

I know like to go down um down there.

Is that just sort of temporary kind of

you get a lot more like snowbird type? I

feel like I mean there's still a lot of

people down there, but I mean the

college campus isn't if you're talking

about college campus like they're not

anywhere near the site as we are up

here.

Got it.

Um I've run a few numbers over there

over the years.

Yeah.

Looked at a few like vacation rental in

uh in St. George, but they have so many

restrictions on like short-term stuff

that I'm just like I don't want to play

that.

Do you do any Airbnbs or

I'm actually going to be converting this

one to it.

Oh, going to slowly start shifting them

over because I'm like this one's nice

enough. Yeah,

my neighbor has like 15 Airbnbs out

around. Um, and he's just like, "Oh,

yeah, change that over. You'll get

you'll probably get X amount on it." So,

I was like, "You know what? That sounds

good."

Are you seeing an excess supply of

Airbnbs right now at all or not really?

He So, I I don't I don't typically do I

run all my numbers based on long-term

rents, and if that works, then I'm good

to

That's a safe way to do it.

Play around. I don't I don't mess around

with my numbers.

Good. Good.

Um, but based on things he's told me,

he's like, "Yeah, it's kind of getting

there." But It's moving more toward it

seems like towards more unique stays

more

experienced stays. Sure.

Than like a house in the middle of a

neighborhood. I need a place to stay,

right?

Okay. So, uh, does that make you nervous

at all then about Airbnb this?

Not really because furnish it.

Yeah, it's okay if I have to furnish it.

Um, I think at the end of the day, I'll

still

I'll probably at worst case, I'll still

at least break even on it compared to

what I would have gotten long-term rent

anyway. And I just know the upkeep's

going to be better

on the Airbnb.

Mhm. the upkeep will be better of the

I imagine. So if I got a cleaner in

here, like I said, I I don't I haven't

done it. If I have clients that do it,

they do well. I just for my stuff, I'm

like, h

for now, I'm just going to run them as

longterm rents. I'm okay with that. I've

got too much I got to do elsewhere. Now

I'm like, okay, let me let me shift

around. Let me test pilot on this one

and then slowly convert all mine to it

if it makes

Well, it's just maybe also because at

the same time there's less there's

transactional volume going on maybe

right now across the board. Huh. Yeah.

Okay. Okay. Wow. Okay. So, uh, now

basically, uh, what is freeway here or?

So, that's State Street. The way we came

in was really wonky. It took us on the

back route road, but this is like State

Street between ORM and Provo.

And so, a very heavily trafficked road

right there.

Yes.

Um,

but they got this big sound wall. It's

sitting above us. We're under it.

You still hear, but nobody

tenants aren't going to care.

It's It's actually pretty nominal.

Yeah. So, okay. Uh, and then what? Two

beds here. And then but there's no

basement under us, right?

No basement.

I thought about having my contractor uh

start digging, but I was like, "Yeah,

I'm not going to push not going to push

my luck quite yet."

Yeah. Yeah. This I mean, this is I mean,

you did a great job. I mean, this is

Thanks.

Yeah. Clean, super easy. Uh Yeah. I

mean, this is awesome. No, you you Yeah.

Don't usually do them this way.

I love the doors. Did you Did you put

these doors in, didn't you?

Replaced them.

Yeah, you replaced them all, huh? Yeah.

Those are nice. Three panel solid holo

core doors. They're really nice. Yeah.

Like the hard one.

Okay, cool. Thank you for showing this

to me. Uh

what is the other one kind of similar to

the first one?

The

I think there's a like I have a few

clients that bought those over there.

I was like I knew there's a lot of rent.

No one very few people out here own and

live in their property. So I'm like I'm

never going to have a problem. The

city's never going to come knocking on

my door here.

Right. Right.

I'm probably going to be able to get

away with that for indefinitely.

Yeah. And so I was like, "No, this is

fine." And I'll still find good enough

tenants to come live out here.

So it's mostly investors buying out here

then. Uh and that's similar to what we

saw in Provo then.

Yeah. There's a lot of lot of investors

all over. So many rentals. We're a very

high renter in Provo.

This particular part. Gotcha. Now, how

do you think that changes in say

Pleasant Grove or Lehi? Is that

far less?

Would you say almost the opposite? Uh, I

mean, you're still going to have rentals

everywhere, but but for sure the

percentage is drastically more way more

homeowners. Yeah. Yeah. Okay.

You'll still see a popup of a lot of

basement apartments that are getting

more like necessary almost to be like we

can't afford anything unless you have

somebody supplementing that.

Yeah. Yeah. Yeah.

So, you'll see a lot of those, but like

full house rentals, you know, here you

can go literally in that zone, but you

guys were.

You could go down and be like

nine rentals and one homeowner maybe,

right? Okay.

And up there it's going to be the other

way around.

Yeah. Yeah. Yeah. That's that's what I

thought. Yeah. So, shout yourself out.

How how do people get in touch with you?

Um, honestly, I just pulled my website

down. I I'll maybe put it back up.

What's your phone number if you want?

Number is 8018986218.

Like I said, do a lot of Utah County.

Um, as well, Josh Zipro. Sorry. Yeah.

Backwards.

That's all good. That's all good. Okay,

perfect. Um, thank you. This is really,

really insightful. So,

uh, recon is exactly this. It's this is

not what we want. This is what we want.

This is not what we want. This is what

we want. And usually, you know, you hear

high cash flow, everybody's talking

about high cash flow. It's like there's

a yeah, but there's a reason why the

cash on cash return is higher or

whatever, you know, and we want stuff

that we're comfortable owning for 20, 30

years, uh, you know, or or trading

within markets or whatever. So, this is

not really that, you know, uh, it's it

would be very very management intensive,

and I I don't know that it's worth it.

So,

did you like the realtor? This realtor

is phenomenal. Yeah, he's he's great. Uh

he knows what he's doing. Uh clearly

he's experienced and and that's what you

want. You know, you want to meet people

and leverage their experience because uh

uh you know, they they win and

commission when you buy and in the

meantime you learn. That's the whole

point. That's like when I started as an

agent, it was all about how much can I

teach people who were coming to me and

you know I'd have to teach 20 people to

sell five something. You know, it's just

the way it is.

Yeah.

Yeah. So, but yeah, this was great. He

was he was great. He was on it. Uh, see,

this is interesting. This is get some

newer

build. Very pocket like two streets over

and it was like run down. These are more

put together home.

Yeah. And and um

feel like it would hurt the comps,

wouldn't it?

Yeah, it does. So, I mean, eventually

everything can appreciate,

but uh yeah, I mean, a less homogeneous

area is is what you're really going to

do is you're going to increase your

turnover. You know, your tenants are

going to leave. And I want I want to be

in those areas where tenants are like, I

want to be here forever and I don't want

to leave because you could you you know,

turnover sucks, especially on houses. I

mean, it's one thing if you're doing a

turnover on a unit because what do you

do? You blow paint carpet and you're

done. But if you're renting out a

three-bedroom, two bath, you know,

there's a lot that a tenant can screw up

when they're moving over all the time.

Yeah.

So, we want to we want to minimize

costs. Uh and and I think getting

basically, dare I say, click baited by

high cash on cash returns. Uh that

doesn't show, you know, the value of or

the cost of turnover and time and

management stuff is dangerous, right?

Yeah. uh you know and a lot of the

people who are like oh yeah I'm getting

this huge cash cash return or whatever

it's it's um so they're managing it

themselves or there's something illegal

going on what it's fine like that's I'm

all for people like individually making

money but you know to scale with house

hack we we need institutional grade

properties

yeah we need everything's on the up and

up

um would you like to work in that real

with that realtor in Ogden on Friday

I don't know that I want to go to Ogden

based on what he said if the person

investing in Oram is telling me. Ogden

sucks and I think ORM's not that great.

Then then I don't think we're on the

right

Yeah.

track there.

Yeah.

So,

but let's see how uh Lehi is. So, I'm

excited about that.

We're going to go see

Right.

Yeah. Yeah. Exactly.

We're going to go see We have three pop

properties in PV. Okay.

What is it? Uh

Pleasant Grove.

PG. Yeah. Pleasant Grove. One grandma

house in Lehi.

Good. Great. Fantastic. I love that.

Should be just what we call a wedge.

What's a wedge deal? The grandma house.

Yeah. And I like like it was a good sign

that she called me. She like there's a

grandma house. You guys will love it.

Like that that that's a good sign that

the realtor understands what we're

looking for.

Yeah. Yeah. Yeah. Exactly. Yeah. Well,

maybe we just need to be upfront and say

that like we're looking for, you know,

grandma's house we could do some

cosmetic rental to.

Well, we tell them that, but sometimes

like, okay, there's no fixer uppers on

the market right now,

but we don't need that. That's fine.

Yeah. that bonus points if there are,

but we're looking for the best

neighborhoods. That's what we're focused

on.

Yeah. Uh high high ownership home home

ownership rate would be another thing we

might want to mention.

High Yeah, high

home ownership rate. I feel like that's

on the front end that I could do a bit

better on is learning the statistics. I

just mean like it's learning.

That's okay. I mean, this is the first

time we've gone to, you know, a market

where

tenants are substantially dominant and

it is so obvious. I mean, there's a

reason why, you know, in like rent

controlled areas and high rental areas,

uh, you know, poverty goes straight up.

It it home ownership lifts people out of

poverty or or well, I mean, you know, it

substantially increases people's net

worth.

Yeah. And then they have more money to

spend on uh whatever their uh their

landscaping, you know, and and when

everybody's see when everybody's home

looks nice on the outside or whatever

except that one fixer, people want to go

there for Halloween, you know, people

want to live there, their kids are

playing outside, whatever, right? Like

it just reduces that turnover because

the type of tenant that uh lives there

is is less likely to be, using the

realtor's word, transient. You know,

okay, I'm done living there. I'm just

going to go get an like you almost want

to to buy in in the neighborhoods where

people are renting there because they

want to be in the neighborhood. They're

not renting there because it's the

cheapest thing is available. Right. Like

that's a you know sometimes people are

like, "Oh, I'm moving to this area.

Okay, what's the cheapest thing I can

get?"

Yeah.

You know, and and that's that's the only

reason they're there is the number.

That's not what we want. Uh, I think

what we're looking for is the reason

somebody is there renting is because

they want to live there. You know, that

that helps us in the long-term

appreciation and it really lowers the

risk. That's the other thing. You know,

if you've got thousands of properties,

man, you don't want to deal with a ton

of evictions and stuff. We need to pay

for like TransUnion data and just get

credit score by by like city.

It's like, all right, let's let's just

go where the credit scores are higher.

I'm Janelle.

Pleasure to meet you. Yeah. Thank you,

by the way, for for doing this.

Of course, I'm really excited. This is

awesome. So,

thank you. Yeah, we are. So, boy, there

were um there were a lot of different uh

rental strategies folks were telling us

about in in Provo and uh right

uh and ORM. What is it like out here?

So, Pleasant Grove is a little

different. You got ORM and Provos next

to all those universities. So, their

strategy is a lot different cuz they're

looking for college students. here. It's

more family and those type of um

renters. So,

Got it. And you do property management

as well?

I do.

And so, what are the usual management

fees out here? Is like 6 7% of rents or

Okay.

5 to 7%. Five. Five to 7%.

5 to 7 and then plus like a rrenal fee

or whatever when you have a transition

or is that generally included out here?

You know what? I actually don't know on

the residential side. So,

Oh, god. Do you generally do multif

family or commercial? Oh, I see. Okay.

Gotcha. I got you. How does this area

compare to Lehi, which I think we're

also going to next?

Yes, we're going to Lehi next. So, I

brought all the numbers because Oh,

sweet. I saw you guys are big numbers,

guys. So,

thanks for that. Yeah,

let's I mean, we can look at the numbers

here.

Sure.

So, in Pleasant Grove, um

Sorry, you're looking at rental rates or

you want to see

whatever you've got. You can tell me.

It's fine. Yeah. Yeah.

So, with um median sold price in

Pleasant Grove, we we're going by

quarter here as of 2020.

Sure. Um, but last quarter uh was 574

for 575.

Okay.

Um, so those are the

And what were these usually rent for?

Like a three and two out here.

So I also got that for you.

Oh, perfect. Thank you for that.

So off of KSL, that's mostly where

people go for rentals. Um, depending on

the type of home you're looking at,

these are the different type of rates.

Is this part of your MLS? Is that

No, that's just

KSL is sort of like local for rentals

basically.

Yes, for I see. Okay. Okay. So twos and

ones, 1400s, that's kind of like what we

just saw at uh the two in one. Uh do a

lot of the like is there a certain age

point where you get almost always

basement expectations or does Pleasant

Grove have basements or not really?

Yeah, has basementically.

Yeah. So 2500 for like a three and two.

Uh is an example listing over here. Uh

you've got the apartment buildings, the

twos and ones. Threes and ones are 14,

13, 15. Uh okay. All right. Got it. So,

thank you for that. So, uh and then this

is what is this that we're in right now?

It's a three and two or sorry, I'll give

I'll hand there were so many listens.

Let me check.

Yeah. Yeah, it works.

So, this one is um seven bedrooms, three

full baths because they include the

basement. So, there's four bedrooms in

the basement.

And is that pretty normal that uh that

you have that many rooms in a house out

here?

Uh yes.

Okay. Okay.

Grove. Yeah.

Okay. Is is that different than from

uh 5 to seven bedrooms? 5 to 7. Wow.

Okay. Uh and that's a Pleasant Grove

thing. And know do people generally

commute out here or what do they do in

Pleasant Grove?

Commuters. Yeah. A lot of I mean really

that far. A lot of people work here in

Lehi or

Okay.

By the point of the mountain. That's

where a lot of jobs are.

Got it. Got it. Got it. Uh and where is

that?

Oh, from here.

It's a little bit north about 20

minutes. So,

not too far.

Let me see. Okay. So if I go So

So we're here. If you go northwest,

this is Lehi and the point of the

mountain. Thanksgiving point, point of

the mountain. This separates Salt Lake

County to Utah County.

So a lot of people commute here for

work. I mean, people have various jobs

and there's a lot of jobs in Utah

County.

So this is maybe where like the tech

jobs are that people talk about and that

I see. Okay. And then I heard good

things about say like Alpine. Is is that

generally the Okay, got it.

Alpine has a Alpine, Highland, Cedar

Hills. A lot of those people are

entrepreneurs, business owners, uh

startup companies.

So, that's maybe where you're going to

get some higher rents and uh

you're getting bigger homes, bigger

price points.

Got it. Everything's more expensive.

Okay. Got it. Got it.

I grew up in Highland, so area. Yeah.

Oh, wow. Okay. So, where would you, if

you were going to buy rental property

yourself, where would you choose to buy

it? Well, it really depends on what type

of renter you're looking for.

Sure. Like stable, like not going to

move every semester,

right?

Um, anywhere north Utah County. So, that

would be Lynon, American Fork, Lehi,

Highland, Cedar Hills, Pleasant Grove.

Okay. Got it. Got it. So, from like So,

we're like at the edge of the beginning

of that basically.

Well, Lynon. Yeah.

Yeah. Yeah. Okay. Gotcha. Okay. Okay.

Uh, and then Highland, you said that's

where you grew up.

Yep.

Got it. And how does Highland compare to

Lehi?

So Highland is generally uh more it's

more established. Okay.

How does it compare? I mean they're both

very similar with um incomes. We're

looking at home income levels and all

that. They're pretty comparable.

Okay. Got it. And then the Where's the

the the one house that you were going to

show us in Lehi? Where's that one?

Oh yeah. So that one um if I can

remember off the top of my head, it's

over by

Yeah. So, it's in this general area.

Okay. Okay. Got it. So, uh that is

probably

Yeah. What? Maybe within 8 minutes or so

of Highland. That's actually pretty

close to Highland.

Yeah. About 10 10 15 minutes.

105 depending on Lehi.

Is there like a particular downtown or

are these all suburbs really over here

that you're going to get more? So, um,

Lehi has a little main street downtown.

It's really cute. Uh, Highland does not.

Highland you can drive from one end to

the other end in about 7 minutes. It's

more residential.

Um, it does have like shopping like a

little grocery store.

Plazas and that. Sure.

Yeah. Alpine's the same way. It has more

plazas and things.

Got it. Okay.

But you're not going to have like a

downtown like I don't know if you went

you went to Provo downtown. There's

We drove through that. Yeah. Yeah. Okay.

Gotcha.

Pretty similar to how Lehi Main Street

looks.

And then I heard there's some new

construction kind of expanding out

towards Eagle Mountain. Does it

Yep. Saratoga Springs and Eagle

Mountain. Lots of new construction going

on over there. So,

is is that deemed to still be pretty

much on the fringe and like further for

people to go or?

Um, I've noticed a lot of people moving

out there because price points are

more affordable than

more affordable, but

Got it. Yeah.

Got it. Okay. All right. Awesome. Well,

let's uh we'll take a quick peek at this

one. So this uh it's I'm noticing in

this particular part

a lot of almost every house we've been

in has been added on to Provo or um and

and here do you get that also over in

Highland and Lehi?

Yeah, you'll get people to add stuff to

Is that pretty common?

Gotcha. Gotcha. Okay. Okay. Got it. So

Oh, wow. There's a lot that's over here.

So you've got family room uh and then

basement. Okay. Wow. Okay. What about um

your your typical like renter or buyer

out here? Are are they may have already

asked you did you say they're commuting

or are there a lot of jobs out here too?

There are a lot of jobs out here. So a

lot of times people will just work in

the area.

Okay. Okay. Just local here. Okay. Okay.

Got it. Uh and then this lot size pretty

typical for Lynen uh

for Pleasant Grove.

Pleas for London area.

Yes. This is pretty typical. Um, this

one I was kind of gearing more towards

your guys's criteria of something either

run down or whatever.

Oh, yeah. Yeah. Absolutely. I mean, a

lot of the original elements on a house

like this, right? I mean, you've got the

original doors. You've got the original

tiling that we can uh, you know, either

glaze or replace like the tub and that.

So, a lot of original elements here, but

so far not been super enthused by the

uh, markets.

So, we'll see. Uh, I'm excited to see

Lehi in that area. This almost looks

like they somehow got power themselves

to maybe an extra unit or something. I

don't know how they pulled that off, but

I've never seen a an electrical meter ex

with exposed ROMX essentially like this.

And it's the older uh fiber ROMX

outside. Uh, and it's going over towards

the garage over here. some some funky

things going on out here, but it's it's

the market and that's what I'm finding

is just uh so far Provo Orum and and

even here you're you're getting some of

that that funk, dare I say. Uh you know,

I mean this is funky. You got a

beautiful house over here and and

you know, it's just not very clearly

homogeneous, I guess I should say. Uh

makes it a little tougher. All right.

tough tougher to to make sure you're

good on your values and your rents.

Recommended this place called what was

it? Highland.

Highland. So it's Highland has the

stigma. She said the higher price point

one. It's because that's where like

people from Provo don't like people from

Highland.

Yeah.

Because that's where the rich kids are.

Yeah. Okay. I want to go there.

Yeah. Well, well that

let's go there. I guess after looking at

the poverty rates, I guess it's

understandable.

Why?

The the numbers were not rigged.

They were accurate.

Well, this looks like a nice home. So,

this uh this home was obviously built

more recently, but uh a lot of the homes

around it look like what 40s 50s? So, uh

is that just people coming in buying a

lot and then custom building the way

they want it?

A lot of it was uh a lot of this used to

be farmland. So it just depended on how

the

who owned the land when they sold it.

Got it. Got it. So you didn't really get

subdivisions. It was just more whenever

people built,

right? We have more subdivisions now

that are building more track home type.

But yeah.

And where would those usually be?

Oh, uh lots of different areas. There's

one here um in Pleasant Grove

that was like built back in 2010 and

type and then they have like custom

homes that are being built. I see.

Super close to the mountain. They're

super pretty. So

So the closer to the mountain that seems

to be a theme, huh? Yeah. Okay. All

right.

Okay.

Trip with the lights.

Oh, there we go. Okay. So here's your

more

traditional, more open floor plan. Uh,

and so yeah, I guess if you get a newer

one mixed in with the older ones, they

also kind of customize it here in the

kitchen. Seem to be a little harder to

comp, but not impossible. Uh,

okay. The uh the Lehi one that you said,

the grandma style one.

Yes.

Is that one in attract or how does that

work? that one.

You know, I haven't had time to to test

to look at it, so we'll have to see when

we get over there.

Okay.

I'll have to see what subdivision it's

in.

Yeah, no worries.

Um, I also want to show you this. This

is the Airbnb market in Pleasant Grove

where we're at.

Okay.

So, just to give you kind of an idea on

the short-term rental side of things.

Yeah, it's available.

Okay. Awesome. Yeah. Let's go check out

Lehi. It's supposed to be getting nicer.

That's

in this direction.

Hey, look at that. Oh, we turned the

corner and it's

Oh, wow.

Normal American housing. Forget the farm

and the party bus back there.

We got housing.

Just don't live.

Oh, that's a nice real estate sign. Look

at that.

Raw iron. So, this is Lehi. Is it Is it

all kind of like this?

Uh, no. Lehi is not all like this. This

um

There are newer parts of Lehi. I mean,

sure. Like any area. Yeah. Yeah.

It's vacant, so I don't

All right.

Okay.

Huh.

So, very interesting, I have to admit. I

mean, it's got like that the perfect

characteristics of grandma's home, but

uh Okay, so and then this. It's so

interesting seeing just the basements.

I'm going to go down. I'm going to look

at at least one basement, but

I hope you come back up.

Yeah, I know. You know, you can tell

somebody's used it frequently. How

interesting. Okay, let's see what we

got. Hello.

Hello.

Uhhuh.

It just feels like someone's here,

though.

Yeah, it does.

There's a there's a feeling.

Okay. So, so like these are the So, I I

would guess what a lot of people try to

do is turn these into

finished units, but it's tough. I mean,

they've got all the equipment in the

middle out here. You've got Hey, you've

got, you know, the sink and the toilet.

Kevin, this is a finished bathroom if

you ask me.

Yeah. Yeah. This is

good enough.

Oh, sorry. Just using the restroom here.

Wow. Okay. So, there they could say they

added a to. So, I mean, I would imagine

people try to finish these off pretty

regularly, huh? Yeah.

And that's what adds to the bedrooms of

most of the square footages. Like this

one's a three bed, two bath, but they

don't have anything on the basement

because none of it's finished.

So, you know, you could finish it off at

least.

Yeah.

Where of the systems are not. Okay. I

mean, there's plenty of room down here

and they got the iron I beam. So,

structurally, it doesn't seem like

there'd be an issue as long as you're

not removing anything. How's the city

with that out here?

Uh, I'd have to talk to Lehigh City. But

um a lot of times you could do separate

levels where you have a mother-in-law in

the basement, have a full kitchen,

bedrooms, bathrooms down here, and block

it off separate to the upstairs, but

that's based on city. So you have to go

city by city. Yeah. Yep. Sure. Okay.

Okay. Good to know. Very cool. All

right. Let me see the rest of the

upstairs. Let's see.

Oh, I like the old yellow paint. The

doors used to be yellow. They forgot to

finish cleaning it up.

These are an interesting way to try to

add storage. See, like you they had this

in the kitchen, too. It's like another

way to get storage. I don't know why,

but

you know, some people just like that.

That's the storage.

These are for the old folks so they

don't fall over. Really?

The other house had one, too. I never

seen these in a house like that. Grab

bars on the outside. I thought this was

like a shower or something. I don't

know.

Yeah. Huh.

All right. You never seen her in the

hallway.

Yeah.

Only this is where she

about to dip.

This is where she got dead.

All right.

Yeah.

Huh. Okay. Okay. Awesome. Well, so

that's good to know. So really, um,

these are all custom homes out here

because this is not a standard floor

plan the way this is. And so is that

pretty much

is that pretty consistent in in Lehi and

and uh Pleasant Grove?

It's area by area because I mean you can

drive on Tipponogus Highway and see

cookie cutter homes which are their

tracked homes but then you get out to

areas like this and it's very custom. So

So pretty much the the When would you

start seeing the tracks? Like 2000s plus

out here. Not so much 70s60s. Didn't

really get that as much.

Yeah.

Or converted farmland. You can find some

tracks that are older but not typical.

Would that be more like uh like what's

usual? What's your typical in like

Alpine or was it Highlands the other?

Yeah, those are all custom most.

They're all custom as well.

Mostly custom.

Okay.

You don't really get tracked in Alpine

especially.

Got it. So it's almost sort of like Utah

County is very much it was farms

then it was sort of chopped up and

everybody built whatever they wanted

sort of thing.

Pretty much.

Got it. Got it. That that answers it.

Okay, that's good to know. Thank you so

much. You were really really helpful. Uh

could you shout yourself out with your

name and number?

Yeah, my name is Janelle Mcome with RRA

Brokers Consolidated. My brand is sell

with Janelle. You can follow me on

YouTube and Instagram sell and uh I work

phone number 858-951-82000.

Also my 801 number is 801739-7900.

I work in Salt Lake County and Utah

County. All right, we think we figured

it out. And it took a a little bit of

time to figure it out, but I think we

finally figured it out. It seems like

this whole Utah County area, which is

different from Salt Lake. It's that area

south of it, right? It seems like this

whole area was once farmland. Uh, and

many areas were once farmland, but there

was never a master plan to send in, you

know, developers and let them build out

certain neighborhoods or tracts.

Instead, it seems like over time the

farms were sold off and people just

custom built whatever they wanted to.

And a lot of these homes have very funky

floor plans because people's tastes

change over time. And generally when

people build individual homes, they they

design them for themselves and not for

resale purposes. That creates risk.

Anytime you have a non-standard product,

you create risk because what if you know

your you have a three and two that

you've comped against 10 other three and

twos and you think your ARV, you know,

your after repair value is X, but then

you didn't adjust for the fact that

yours has a funky floor plan, but you

maybe you didn't even know your floor

plan was funky until you went and tried

to rent it out and everybody's leaving

after 6 months because it's just a toxic

floor plan or whatever. I mean,

hopefully you could figure that out

beforehand, but to be extreme, let's say

you couldn't. uh it it introduces risk.

Whereas, if you have developers come in,

and this is why I love tracked homes so

much, I don't care what year it was. You

can have a 1912's track home, uh 1920s,

you could do 1940s, ' 50s, '60s, '7s,

'8s, '90s, it doesn't matter. But when

you get tracks, you get consistent floor

plans and replicable comps. Those are

the most important things about real

estate because sometimes you're not

going to get a lot of comps even in

tracks. I would much rather very recent

model match comps of what I'm trying to

buy to make sure I'm minimizing my risk

or potentially completely eliminating my

risk while maximizing my upside in real

estate. You know, like here's a what

looks like a maybe a 20 I don't know 10

2015 style tract over here. so much

easier to comp homes there than in the

neighborhood where we just were because

everybody's got a unique floor plan and

the house across the street is from the

40s. The guy across the street from

there has a bus in his driveway. The one

across the street from there is a brand

new build. It's like h how do you adjust

for all that? I would hate to be an

appraiser in this area because your your

life would be so difficult. And anytime

you make your life more difficult, you

know, I think sometimes people think,

oh, you just want to be lazy, so you

don't want to do more work doing comps.

Uh, just why don't you just do cost per

square foot? It's like, oh my gosh, real

estate doesn't work that way. Like you

you do cost per square foot works when

you have a warehouse, when you have

office space, or if you have retail, you

look at front foot. Fine. Uh, you know,

here single family. No, it you you've

got to look ideally very similar

properties. mitigate your risk. Simple.

And then you do the same thing with

rentals. And then you know what you're

getting into. You know if the numbers

are going to work before you ever buy

it. But because out here this is a very

uh nonstandardized

county. The entire county is like this.

People are basically doing whatever the

f they want. People are converting stuff

without permits. People are, you know,

uh uh renting uh you know bedrooms in

half. I or throwing up walls. like I

don't even know if that's safe. Like if

you do that, do you do you even have

egress for both of them for fire codes?

And then I mean then you're like, "Oh,

well, how many times have properties

burned down? Oh, well, we just happen to

be right next to one on the first

property we saw in this county." So, you

know, and then you think about the

insurance liability of of running an,

you know, potentially operation that's

that's not, you know, up to code. It's

just the there a lot there's so much

risk. I think, hey, the one-offs fine,

great. Yeah. talk about all your cash

flow, but for long-term scalability, I'd

rather maximize my appreciation and

minimize my downside risk. That's really

what I care about. And it is way too uh

non-standardized here for us to be able

to do that. Whereas, you go look at a

master planned community like Summerland

in uh Vegas. So much easier. You just go

track by track and you've got plenty of

comps in each neighborhood in each

market. Uh each each particular, let's

say, subdivision, plenty of comps,

plenty of easy things to to uh look at

for for rental comparisons. And people

know the neighborhoods really well,

like, oh yeah, that builder was great.

Oh, that builder was bad. Here, you

don't know who built every house because

every house was built by somebody else.

Maybe they stuck it, you know, slapped

it together themselves. And I'm not

saying that's bad. I mean, hey, the

realtors have been really really nice

and and transparent about it all. Uh,

but it I I now understand why a lot of

the agents say they represent uh Utah

County and Salt Lake County because

quite frankly, you're probably getting

uh, you know, a different clientele in

in Salt Lake uh, county, one um, that is

looking for that more sort of consistent

uh, tracked home. Uh, and that's kind of

that's kind of us. So, um, doesn't

surprise me to see them diversify away

from potentially some of, uh, the more

challenging areas to to comp. Uh, more

challenging areas to comp means lower

liquidity, which means it's harder to

sell the properties. Uh, it's harder to

find buyers for the properties, all of

it. I mean, you just just stay away from

risk. Uh, especially in real estate,

you're supposed to diversify into real

estate for less risk, not more real

estate, in my opinion. That's my take.

So anyway, that's my uh that's my

summary of what was this place called

Utah County.

Yeah. You know what what what I was just

thinking of is it feels like there's

almost no enforcement. Uh like there is

no code enforcement. Like there is no

city that's like towing abandoned

vehicles or trying to actually clean

stuff up. it this this entire Utah

County area. It feels uh I don't want to

say lawless. It just feels uh building

departmentless. Like there's no such

thing as building and safety out here.

You just have building. Uh there's

there's no consistency. Uh again, people

just sort of doing whatever they want,

which yeah, like that's freeing. Yay,

America, free. But then it also turns

into this, you know, which is is is very

difficult to uh to reliably invest in.

And then it it it it actually depresses

the potential value for the people who

live there. It makes it harder for them

to build more wealth because the area

doesn't stay as desirable as it

potentially could be. This is why we

have uh building and safety apartments.

Like look, don't get me wrong, I live in

an HOA neighborhood. I I don't like that

I live in an HOA cuz because I can't do

whatever I want. But if everybody pulled

a Kevin in their neighborhood, you'd

have people, you know, doing crazy

in their neighborhood all the time. You

know, they drive go-karts everywhere.

Shouldn't do it.

Maybe. Here's an interesting

correlation. Utah County Utah County

violent crime is 8.1. The US average is

22.7. I wonder if because there is so

little crime that so little like law

enforcement is needed or like code

enforcement even cuz if there's not a

lot of people being hurt then why would

like there to correlate at all?

I don't think so. Uh I mean it's it's an

interesting idea but really you're

comparing uh so when I'm talking about

like government I mean like building and

safety like building inspectors coming

out and and saying look these are the

type of homes we'll approve in this

area. These are the type of square

footages we'll approve. These are the

designs we'll approve. These are the the

bedroom designs we'll approve. Uh I I

don't know that you necessarily uh I

mean you could have highly regulated

areas like parts of New York that are

super high crime, a lot of code

enforcement. Uh and then you could have

super low crime areas uh like uh

Ventura,

very high code enforcement. Uh but those

are I think pretty different you know

because you're you're one's building

enforcement the other one is uh is is

basically just crime enforcement

policing right uh both of them are a

style of police power so there's

definitely that overlap right the city

uh provides police power to to code

enforcement who can walk around with a

gun too a gun and a badge just like cops

do so they're very similar and it's

that's an interesting idea it's one I've

never thought about before so I'd give

it some more thought before I definitely

poo poo it

Yeah, I don't know about that. Um, like

usually, let's put it this way. I would

say there's a larger correlation between

poverty and uh lack of tax revenue for

the government, which means less

capability of actually managing the city

properly, which then means the city

becomes even less desirable. And see,

that tends to be the phenomenon known as

uh the concentration of poverty. poor

areas become poor. This is an example in

my opinion of that. And and don't get me

wrong, some of these homes are still

like $600 700,000 because you're I think

you're inflated by room rents.

Everybody's renting stuff out by the

room. So you're because of all the

college students. So you're artificially

making people feel like they can, you

know, make more money out here and it's

driving up the values. But I I don't

know that the the the wealthy people are

spending money here, which is leading to

less of that city income tax revenue.

And so then they don't have the money to

enforce uh uh building codes. And so

they're just like whatever. Look, we got

one lady at the building and safety

counter like she'll give you a thumbs up

or thumbs down, but we need our permit

fee, you know? And the thing is like if

somebody's renting like I don't know I

just feel like the the desire to want to

improve the house or the room up to code

is almost not there cuz it's like okay

like

it's just not profitable. Like that's

that's the other thing is

you know in you go to let's say the city

I live in there's a there's a huge value

to bringing everything up to code

because the buyer who's coming in will

pay a premium for knowing everything is

like legal and up to code. you know,

Californians, every it's gotta be

perfect, you know, like California,

right? And I'm being extreme on purpose.

Whereas in in a poor area, people are

like, "No, I I I don't care if it's not

permitted. I just want to get in

cheaper."

I mean, I'm not saying that's bad. It's

just it's more risky because you're

you're hurting your potential upside and

appreciation. Again, everyone everything

kind of floats up together, right? uh

but uh but certain areas will absolutely

retain their value and in the long term

be worth a lot more. It's very difficult

to look at like the last 5 years of

appreciation because co screwed

everything up. So it made the historical

trends really difficult. Uh you know now

you have to adjust for work from home

but then you also have to adjust for

going back to the office and then where

are the office developments going? Oh no

well now we're going through tech

layoffs. So everything's a little

jiggered up right now.

Understand? I think the poverty rate is

way like the poverty statistic is a lot

better for code enforcement than crime

would be.

Oh yeah.

I think that's

Yeah. Yeah. Yeah. Right. Because the

poverty rate is is directly associated

with your income which is directly

associated with tax revenue at the city.

Yeah. I think those three like the three

key indicators before we go to any

market. I mean, for whatever reason, we

decided to make an exception for Provo,

but it just goes to show that we should

not make exceptions

for those three key indicators of

population, poverty, and median income.

Well, and and the thesis that we had

was, oh, okay, college area, the poverty

rate's probably higher because every kid

in college is technically in poverty.

Uh, well, not every kid, but most kids

going to college technically below the

poverty line. Uh, it's cuz you're going

to college. Like, that makes sense. you

have a part-time job and you're making 8

grand a year or 12 grand a whatever of

course uh

so but yeah no we were wrong the metric

held true the formula is still accurate

all right so we saw provo or lei we came

to look at real estate we saw real

estate this is definitely an area where

there's a lot less standardization

increases our risk and something to

remember about house hack is we've got

to prove prove our model with the lowest

amount of risk first. Then when we prove

the model with the lowest amount of risk

first, which obviously I've already done

on a small scale, which now we want to

scale, we prove that with the lowest

amount of risk, then maybe we could

diversify into areas that are maybe a

little bit less standardized. But for

now, we'll probably have to back burner

a Provo and the Oram as well as Lehi

markets. But you know what? We're not

going to say never. So maybe we will be

back. We'll definitely be back to Utah,

especially Salt Lake, looking at Sugar

House, Holiday, Mil Creek. We'll check

those areas out again. And then, of

course, we'll be skiing Park City.