Multi or Single / Advice?

Question

Hi All, first time investor in PDX. After scraping the market for multi-families in PDX, it's tough to find something affordable. Few questions:

1) Any advice on where to look for properties? Maybe an area I haven't considered that gives you optimism.

2) I may look into a single family prop in solid neighborhood as my entry point into investments. Good call or keep pushing the multi-family route?

3) If single family, is FHA loan a good idea if planning to rent out in 1-2 years from now?

4) what's the best step afterwards (i.e. refinance option, etc.)

Thanks for all your input!

-Mo

Taylor Dasch · Answer

SFH are great to start out with, there is less risk in my opinion, and typically your tenants will stay longer. If this is your first deal, I definitely suggest house hacking a duplex or quadplex!! This will help you the most in the long run. After house hacking for a couple years, you can keep the same loan on it and purchase your primary residence then rent out the side you were living in.

Mo Khidir · Answer

Thank you very much @Grant Schroeder I will definitely let you know if I have any other questions/thoughts.

Thank you so much @William Sing ! I appreciate the insight and all the thoughts, I will definitely reach out to Jolin and study your deal analysis! The financial info is a huge help as well, I will check those out and definitely reach out with any questions, thank you again!

-Mo

William Sing · Answer

1) Any advice on where to look for properties? Maybe an area I haven't considered that gives you optimism.

I would look at widening your search. Not sure if you have any location restrictions but looking in submarkets like Gresham or Tualatin would be a good area. In the PDX, I have been seeing maybe 1-2 good duplexes a month. If you are looking at Triplexes or Quadplexes, Umpqua has a really good program. You can talk to Jolin Warren there! You can check out this video going over a recent deal that is pending right now - https://vid.us/ufdif0

2) I may look into a single family prop in solid neighborhood as my entry point into investments. Good call or keep pushing the multi-family route?

I think single-family is great for starting, but just know you have a bit more competition in this market since inventory is so tight. Houses that would of sat on the market for a while are not anymore. If you can find one that needs a lot of work, you might be able to use a 203k loan (rehab loan) to fix it up. In term's of which one to go, It is more about your long-term goals. PDX is an equity market so the more you can leverage in terms of the price of the property, the more equity gains you will see that can be used to roll into the next property.

3) If single family, is FHA loan a good idea if planning to rent out in 1-2 years from now?

For FHA you just need to live in the home for a year (I believe). I'm not a lender so double-check with someone. If you want to get more money for the DP or need additional financing I'd look at the portland housing center (https://portlandhousingcenter....). They have 6mo-2yr programs that will help you get more for your money. If you want to refinance to get the PMI (mortgage insurance) off the FHA loan, just know that the rates will most likely be higher. I'd talk to a lender when that time comes to crunch the numbers and see if it is worth it or not to get the Mortgage insurance off or not. It is more about the monthly payment in my opinion.

4) what's the best step afterwards (i.e. refinance option, etc.)

Some options you have after you do purchase any home is to get a HELOC once you get enough equity, which will not take long in this market. You can also do a cash-out refi, but crunch the numbers to see if that would work. Not sure if a 1031 exchange might be possible, but would be a good idea just to see if that is possible.

DM if you have any other questions!

Grant Schroeder · Answer

@Mo Khidir you could use a 3% down conventional loan as a first time homebuyer on a SFH. Let me know if you have more questions about this! I am in the same market as you in Portland, OR and work with a lot of house hackers here.

Taylor Dasch · Answer

Yes this is exactly why I didnt house hack, I was just looking at the MLS. If I were to do it over again, I'd definitely use propstream then filter to multi-family, then you can filter whatever you want such as out of state owners, vacant, owned for more than 8 years, property liens, etc. Then call them to see if you can create a win win for you and them!

Mo Khidir · Answer

Thank you @Taylor Dasch! This was my original plan but I'm finding it increasingly difficult to find properties that fit the bill (location and price). Any recommendations on finding these? I'm on the MLS every day but not much to write home about...thanks again!

Multi or Single / Advice?

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