Making a living from house flipping, one house at a time.

14 Replies

Portland, Oregon is getting more and more tough to find good deals in the REI space and the market is, as we all know, seems to be going toward shaky times. I have been flipping as a side hustle for the last couple years and I am looking to leave my job here in the coming months and focus on adding structure to my REI LLC, Coast to Coast Partners and Property. My question is this, does anyone have experience with leaving their job to flip homes in this market as of recent? I know it was very possible in even very recent years past but the PDX market for buying off market properties seems to be getting more and more stringent to find good deals. My thought is that me being able to put 100% of my energy into the project will save money on its own. I would be working on the home full time but don't trust myself with high skilled work so there is quite a bit of subs that I hire and I have a contractor who acts as the project manager. I take on the GC, back office and a lot of the odds and ends of the project as well as a lot of the grunt work. My finances allow for a purchase of one home at a time without over leveraging myself. I know and am interested in working with partners so if you live in the area please do reach out but my reason for writing on the Forums today is to gain perspective on if its still possible to make the jump to REI in PDX full time in 2019.

Thank you in advance for any insight. 

Originally posted by @Steven Denio :

Portland, Oregon is getting more and more tough to find good deals in the REI space and the market is, as we all know, seems to be going toward shaky times. I have been flipping as a side hustle for the last couple years and I am looking to leave my job here in the coming months and focus on adding structure to my REI LLC, Coast to Coast Partners and Property. My question is this, does anyone have experience with leaving their job to flip homes in this market as of recent? I know it was very possible in even very recent years past but the PDX market for buying off market properties seems to be getting more and more stringent to find good deals. My thought is that me being able to put 100% of my energy into the project will save money on its own. I would be working on the home full time but don't trust myself with high skilled work so there is quite a bit of subs that I hire and I have a contractor who acts as the project manager. I take on the GC, back office and a lot of the odds and ends of the project as well as a lot of the grunt work. My finances allow for a purchase of one home at a time without over leveraging myself. I know and am interested in working with partners so if you live in the area please do reach out but my reason for writing on the Forums today is to gain perspective on if its still possible to make the jump to REI in PDX full time in 2019.

Thank you in advance for any insight. 

 I was fix & flipping a little north of you in Seattle at the same part of the cycle (top of cycle) last time around. What I learned is that as good as the profits are with flipping, when the market turns on flippers, it turns hard. I switched to cash flow years ago and I flip when I want to or get bored. It is much more evened out and family friendly. If you are going to transition from a W2 job to real estate investing, I'd suggest looking into cash flow before you make the leap.

I'd be happy to give you some pointers.

@Account Closed I would love to grab your ear and hear your experience. Cash flow and holding property is the end goal but I haven’t found a scenario yet where Portland cash flows through renovating and refinancing, Let me know if you think different. I would be interested in sharing my goals and hearing your thoughts.

Thank you for responding.

Originally posted by @Steven Denio :

@Mike M. I would love to grab your ear and hear your experience. Cash flow and holding property is the end goal but I haven’t found a scenario yet where Portland cash flows through renovating and refinancing, Let me know if you think different. I would be interested in sharing my goals and hearing your thoughts.

Thank you for responding.

 I don't think Portland will cash flow well right now. Seattle is out of the question too.

You may need to look at other markets. I invest in Arizona and Texas for cash flow but others invest in the mid west. The key is to find properties, usually "off market" that you can buy. I use a formula that works for me. I stick to markets where rents are actually higher than a mortgage would be and then use a couple of other factors to make things work. Here is an overview with a spreadsheet that explains a fair amount of it and should give you some ideas.

Average Turnkey Cash Flow Per Door In Phoenix Metro Area No Bank Needed

https://www.biggerpockets.com/forums/600/topics/584916-average-cash-flow-per-door-in-phoenix-metro-area

@Steven Denio

How is the STR business out there?

Perhaps that in-between route is the way to go?

Do a high-design renovation on a fixer-upper and put it up on AirBnb until you make enough cash to repeat.

I know of some investors here in Arizona making up to $700/week per house.

If AirBnb doesn't work out you can flip the house.

Also, I found the book, Building Wealth One House at a Time, by John W. Schaub very inspiring.

Good luck Steven! ;)

@Bevla Reeves , Thank you! I actually just finished an Airbnb. The city of Portland is cracking down very hard in that space. They make you sign a SDC waiver form saying you will not use your space as an Airbnb for 10 years. If you do they fine you up to 100% of the SDC fees. SDC fees in my Airbnb in inner SE Portland cost 25k.

I think if you can only do one at a time market does not matter unless your doing ultra luxury I don't see how that works for a full time gig unless you can live on 50 to 70k a year which is a decent profit per project in PDX these days and sometimes a great profit.. you can be a realtor and have no risk and do much better..  just sayin.

for us we did a lot of flipping in the day.. 50 to 70 homes a year I would buy at courthouse steps.. this took about 10 million in capital of which we need 3 to 4 million liquid to buy the foreclosures.. now there are HML who will now loan on foreclosures in this market but by the time you pay all their fee's profits many times go to them and you make next to nothing or lose money.. seen that a few times.

I like new construction in this market if you know how to get lots.. that's the tough part.. but financing on the private side is stepping into the new construction space.. 

Also do you have your developers license its required if you flip houses or build.. that or a GC license cant have no license and even do one flip a year.. Legally anyway.. and they do fine you.. reason I know I have been fined twice  once for 1k the other time for 5k.. the entity that is in title needs the developers license.. I have 14 entities in which I am the owner of them all. and I had my personal developers license but that no count..  has to be in the name of what ever entity is in title.

AS for cash flow I would certainly be looking just out side the city limits and really up and down the 1 5 corridor  from Longview to Cottage Grove..  city of Portland seems to have some pretty anti landlord ideas these days.

So like we are starting 90 house project in Canby in Aug and that project has to have its own develpers license..

@Jeff S. it’s something they make you sign during the permitting process to get your permit cleared. It gets triggered when you are adding square footage to a new space, e.g. renovating a basement or even just adding a bathroom to a basement can trigger it. The owner signs it. It was enacted in August 2018 I believe.

Originally posted by @Steven Denio :

@Bevla Reeves, Thank you! I actually just finished an Airbnb. The city of Portland is cracking down very hard in that space. They make you sign a SDC waiver form saying you will not use your space as an Airbnb for 10 years. If you do they fine you up to 100% of the SDC fees. SDC fees in my Airbnb in inner SE Portland cost 25k.

 WOW!!!!!!

I really don't understand why cities are restricting this business model, it's so unfair!

Luckily, AZ is still pretty friendly in this area, but I suppose that could change at any time.

Although, AZ is pretty pro-business so I don't see it changing anytime soon.

Bring your investment dollars here to Phoenix, we'd love to have you, Steven! ;))

@Jay Hinrichs , Thank you for the insight. I do not have my developers license but I do have a contractor on hand that is licensed. We have not fully partnered yet because of timing but I am thinking of presenting him with a 20% of profit after tax bonus for a commitment to keep his schedule clear, but I am having trouble with this penciling in the current market. In the past I have used my own LLC and hired a licensed construction company to insure the work under permits (guess I skirted the system there). All of my projects have always had a licensed company working on the project. It seems like moving to full time may be risky at this point.

I appreciate your response, Jay 

Originally posted by @Steven Denio :

@Jay Hinrichs, Thank you for the insight. I do not have my developers license but I do have a contractor on hand that is licensed. We have not fully partnered yet because of timing but I am thinking of presenting him with a 20% of profit after tax bonus for a commitment to keep his schedule clear, but I am having trouble with this penciling in the current market. In the past I have used my own LLC and hired a licensed construction company to insure the work under permits (guess I skirted the system there). All of my projects have always had a licensed company working on the project. It seems like moving to full time may be risky at this point.

I appreciate your response, Jay 

ya the entity in TITLE to the property needs to either have a developers license or a GC license.. you cant buy rehab and resell a single house in Oregon without one or the other.. I know strange law but it is what it is.. you can check on it.. I learned the hard way like I said.