Locating Cash Flowing Property

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Locating Cash Flowing Property

Robert Brown
Developer · Bend, OR · Member since 2008 · 5 posts · 0 votes

Hi All,

"Locating Cash Flowing Property" is the name of the game, wouldn't you agree? My reality for the last 5 years has been that I've lived in a area that is not good for cash flowing property, and I guess I am kind of biased that there are any out there at all anymore... I have been a loan officer for three years in Bend, Oregon, and can say that I've seen a lot of real estate transactions done, and now am seeing a lot of hurting people. If you hadn't noticed, Bend was on almost every national survey representing one of the hottest real estate spots in the US. Bend is a destination area, lots of vacation homes. When people invested in Bend in the last 5-10 years, they invested to flip, rather than cashflow. With a deadening market, this strategy has failed. For example, and average SFR in Bend, 1500sq.ft., 3bed, 2bath, would be selling around 300K. The renters market would allow for about 1200/mnth for this property. Far from cashflowing.

It seems that I am going to have to travel a bit to find the properties that make sense. I'm sure there are even some in Oregon.

What is your take on the national market, is there still a lot out there for the taking? All I know is my local market...

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  • Eric Foster
    Real Estate Investor · Portland, OR · Member since 2008 · 1k+ posts · 23 votes
    18y

    Hi there...

    I see you are in Oregon too!

    Yes, Bend is out of the question for the most part... Unless... You can get real creative with the seller... i.e. carry at reduced monthly payments, lease options, balloons with no payments, etc.

    And you are right, there are many areas in Oregon… You just have to find one that works for you...

    Pendleton comes to mind…

    I also used to be a loan officer for 10 years... Full time investing now.

    Good luck!

    P.S. Any rehab loans left?

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  • Robert Brown
    OP
    Developer · Bend, OR · Member since 2008 · 5 posts · 0 votes
    18y

    Hi Eric,

    Thanks for the reply. Since you know the area, you know what I mean in Bend. I have done any research on Pendleton yet... I'm going to spread my wings and check out some other areas.

    Do you own a lot of properties that are over a 2 hour distance from you? If so, what challenges come up most frequently? Obviosouly, a good property managment company is a must... How far away from your primary residence would you go at most?

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  • Eric Foster
    Real Estate Investor · Portland, OR · Member since 2008 · 1k+ posts · 23 votes
    18y

    Depends…

    I am real active, so I go to an area that is 3 hours from me… But I am there every week for a day or two…

    If I never went there… or not very often, I don’t know that I would go much further than that. Also, I am talking about single family properties here.

    FYI - The family has a house in Bend.

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  • Michael Shadow
    Investor · Bellefonte, PA · Member since 2008 · 1k+ posts · 88 votes
    18y

    Finding a cash flowing property is really hard. You will have a better chance of creating a cash flowing property. You have to find a property with a person behind it that NEEDS to get rid of it. Get out and start hunting them down. Just scoping out the MLS usually doesn't work too well.

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  • Cyrus Uible
    Real Estate Investor · Charles Town, WV · Member since 2008 · 17 posts · 0 votes
    18y

    Our main financial/funding guru on our investment team is also from Bend. Small world.

    Anyway, we overcame this by looking to buy in other parts of the country, like Oklahoma, Mississippi, etc. The hardest part is finding the right property management partner and having someone on the ground (who is an equity partner) for at least the first 60 days and then visiting at least once of month there on out.

    It's hard to do by yourself, but if you can put together a team of 4 or 5 people it is doable. At least that's what we've done.

    Best of luck.

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  • Robert Brown
    OP
    Developer · Bend, OR · Member since 2008 · 5 posts · 0 votes
    18y

    Thanks for the suggestions. I understand that the works comes in on doing the research, and creating an opportunity to be in the right place at the right time. If I were to purchase a property in another state, would you still recommend I visit it every month, even if I have a reputable property managment company keeping an eye on it? Thanks! Robert

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  • Andres Garcia
    Real Estate Investor · Miami Beach, AL · Member since 2008 · 34 posts · 0 votes
    18y

    Im starting to see cashflowing properties in the Miami area. They are few and far between but 4 units and up every now and then they pop up.

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  • Dan Spurlock
    Residential Real Estate Agent · Silverdale, WA · Member since 2008 · 4 posts · 0 votes
    18y

    I have spent the last year and a half dealing with an out of state nightmare. I am just like you. I live in an area that does not cash flow unless you put 20-30 percent down. So I went looking around the country. I wound up in Buffalo New York. You can buy a duplex there for 20-30k and rent it out for 400 dollars each side. Now the taxes are pretty high so its not as good of a deal as it looks, but its still a great deal. You can cash flow about 300 dollars positive per duplex after all is said and done. And thats with getting a loan with 10 percent down which is about 6k out of your pocket. So I bought three duplexes. Heres the problem. I dont know anybody in Buffalo. I had to rely on the internet and making phone calls to find a good lender, property manager, and realtor. I am on my 4th property manager, 10th lender, and 5th realtor. I have had to go through a lot of crap to find anyone good. I think I have finally found the right team of people, but it took a lot of time not making money and being stressed out to get where I am at. The city is crawling with scammers waiting to take advantage of unsuspecting investors. Buffalo even has its own task force trying to crack down on these people. The point is you can invest in other areas, but unless you know someone who has team already in place its gonna be rough. Good Luck!

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  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    18y
    Originally posted by "robertb":

    It seems that I am going to have to travel a bit to find the properties that make sense. I'm sure there are even some in Oregon.

    What is your take on the national market, is there still a lot out there for the taking? All I know is my local market...

    How does Ontario, Oregon do on rent? I see property there listed for 60-70k. Like you said though, it looks like it's a drive.

    As far as the national market - truth be told, there's a ton of cashflow out there. Luckily I'm in fly over country where cashflow is a daily occurrence. Flip side (no pun intended) is we get crap appreciation.....if you don't get forced appreciation on the buy.

    Check Idaho - right next door to you (state wise). I'd bet Idaho is packed with cash flow.

    Tim

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  • Michael Rossi
    Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
    18y

    Would you rather have instant equity now (from buying at a discount in flyover country) or the hope of appreciation (not working so well now in a lot of the former hot areas). I'll take the sure thing along with the positive cash flow every time.

    Mike

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  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    18y
    Originally posted by "MikeOH":

    Would you rather have instant equity now (from buying at a discount in flyover country) or the hope of appreciation (not working so well now in a lot of the former hot areas). I'll take the sure thing along with the positive cash flow every time.

    Mike

    I know. I buy 10-20 cents on the dollar so I get 80-90% equity on the day of closing on top of my cash flow. I was just trying to think of something to make him feel better. :lol: I'm sure Bend is lovely.

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  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    18y

    I just remembered something. A friend of mine creates cashflow in Seattle. He does a version of corporate renting. Short term, furnished, higher rents - the higher rents are enough to flow positive. His site is www.beds4meds.com - short term renting to medical students.

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  • Matthew Gil
    Real Estate Investor · Member since 2008 · 340 posts · 34 votes
    18y

    I fell into this exact same trap. My backyard is REALLY bad for cash flow. We are talking Cook County, IL. A county that borders on being a socialist regime. There are a lot obstacles to be a landlord and seeking cash flow. High real estate prices, high taxes, highly regulated, and a legal system that is very pro-tenant rights. Landlords are viewed as the devil incarnate around here.

    So, what did I do? I decided to stop investing in the area that I live in and now I go WAY outside the area that I live.

    I don't care how good an investor you are, if a market does not favor cash flow, it does not favor cash flow. Why fight it? Move on to another market that is investor friendly.

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  • Julian F.
    Vancouver, British Columbia · Member since 2008 · 27 posts · 0 votes
    18y

    Im in Vancouver BC, the land value (no house) starts from $550,000 - $1mil right now for 1 standard size lot. A dumpy house that sells for $600,000 will rent for $1500/month. Very difficult to find cashflow properties locally, so im in the same jam.

    My only local option is to invest in pre-sale deposits, or other developments. Since my area is quite valuable, there are many developing properties coming up out of old motels and warehouses.

    My point is that each area will have its strengths and weaknesses, so i guess you can work with where you are, or relocate to where it works for you.

    It is frusterating for me and my peers reading about so many places that have houses selling for under $50k though! Its like reading fiction!

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  • Michael Shadow
    Investor · Bellefonte, PA · Member since 2008 · 1k+ posts · 88 votes
    18y

    Don't ever put yourself in a box and say there are no cash flowing properties in your back yard. I used to put myself in this box and then I found one, then another, and now I have a couple more deals I'm looking at that will cash flow. If you can't find cash flowing properties your not looking hard enough. (IE. Look for sources other than the MLS.)

    -Michael

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  • Timothy W.
    Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
    18y
    Originally posted by "dafly":
    Don't ever put yourself in a box and say there are no cash flowing properties in your back yard. I used to put myself in this box and then I found one, then another, and now I have a couple more deals I'm looking at that will cash flow. If you can't find cash flowing properties your not looking hard enough. (IE. Look for sources other than the MLS.)

    -Michael

    Trust me....Matt isn't kidding. Cook county truly sucks for cashflow and we've looked at every source out there. Matt and I own an investing club calendar in our area, we ran investing club subgroups, I've run conferences with the local experts speaking, I've spoken to investing clubs. We have a network of over 4,000 Chicago investors at our fingertips....we chased our tails for cashflow in this market 2 years before leaving. Now we are both working seperate markets outside of our backyard where cashflow is abundant. 80-90% of the country geographically cashflows. Cook county ain't part of it. Chicago has some types of deals for equity, flipping and rehabbing. When we have seen what we've seen - it doesn't have cash flow.

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