WHY can't I buy a house?

Rental Property Investor · Portland, OR · Member since 2017 · 19 posts · 2 votes

I live in Portland, OR. I have been trying to purchase a fixer but have yet to succeed. Now, I know the price of anything is what someone will pay for it, so a large part of the result is in my valuation. But when I run my number it is usually done with cost to rehab myself (saving money) and I have been making cash offers. Are people really spending 400k+ for less than 10% ROI? (it's seems everyone else has cash too)

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Russell BrazilBusiness Member

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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

Offer more money. Probably not what you want to hear, but thats the reality of the market. I see some people constantly, sometimes for years under bidding the market, and will raise their prices, but still always trailing the market. At some point, you got to decide to buy or give up instead of spinning your wheels.

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John Clark
Member since 2018 · 1k+ posts · 1k+ votes
7y
"A vacant fixer cash only property was for sale for 280k. I offered 310K. Didn't end up getting it but it sold for 280k (that part was very curious) Then 6 months later went for sale again and sold for 320K with nothing done to it. Whaaa?"
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Kyle, hate to tell ya, but it's your breath. :)
Good luck.
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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
7y
Originally posted by @Kyle Ward:

@Russell Brazil In my particular case, I have just alternately bought elsewhere and achieved my desired returns (more than 2X what I would get here). So I am not necessarily spinning my wheels. But I would like to buy something local. Simply offering more money would be an irresponsible decision (financially). I guess I am learning a lot of invaluable lessons.
I am not convinced that offering more money is always irresponsible. Maybe you got a better deal in another market, but that is probably because the market is less desirable. Real estate prices are all about supply and demand. In 2015 I was deal shopping and it felt like everything was overpriced. I sat on the sidelines. Then in 2016, prices went up more and I decided to pull the trigger anyways. Then in 2017 and 2018 prices went up more and the deal I got in 2016 would be a bargain today.
My point is don't discount the appreciation of property and rent values in hot markets. I don't have your deal specifics, so I am just making a general statement. Not saying you made a bad choice.
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Kyle Ward
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Rental Property Investor · Portland, OR · Member since 2017 · 19 posts · 2 votes
7y
@Earl Hatmaker mostly because it requires me to leave my family (wife and two young girls) and the heartache almost debilitated me at times.
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Kyle Ward
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Rental Property Investor · Portland, OR · Member since 2017 · 19 posts · 2 votes
7y
@Joe Splitrock ya, you’re absolutely right. My questioning of how fast appreciation is right now and its ability to sustain the pace, has been the main fear generator. It’s simply preventing me from getting that deal. Well the upside is: I now am in a better situation to put some equity into another long-term deal. Better raise my value anchor
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Dave Rav
Summerville, SC · Member since 2018 · 588 posts · 252 votes
7y
@Kyle Ward
Couple things here. Your very first sentence is part of the answer - Portland. that location may indicate home values and what things cost. May have go further from city center (25+ miles) for cheaper properties.
Others may purchase on terms, meaning they don't buy with all cash.
Lastly, no, I wouldn't spend $400k of my own money for one SFR fetching 10% ROI. But that's me
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Steve B.
Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
7y
@Kyle Ward so far about four posters on this thread have conflated absolute values with relative returns. It’s financially nonsensical in the context of this discussion.
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