Is Portland, OR still possible for a new REI?
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Mike NussPro Member
Real Estate Entrepreneur · Portland, OR · Member since 2014 · 451 posts · 328 votes@Tony W. you can be a successful investor in any market, under any market conditions. There's a strategy that will always work. So when I see questions like these, there's no answer to be given, only questions to ask.
What do you want to do? What fits your personality? What are your goals and vision of your future self?
Where, how, when and what you invest in should be based on those answers, and not someone's opinion on an internet site.
That being said, discussing with other experienced investors is a way to flesh all this out. BP is great for it online. Investorlab is great for it in person in Portland (January's meeting will be epic).
24 Replies
- Real Estate Broker · Sacramento, CA · Member since 2021 · 517 posts · 408 votes2y
Hey Tony,
Portland is still a fast-growing and popular real estate market, but your idea of investing in ancillary areas might be better since urban cores are quite overpriced right now. The idea is to buy where the real estate is going to appreciate, not necessarily where it's already done so.
I am a real estate broker and own 7 doors, and manage over 100 STR/MTR properties. I buy primarily in Sacramento and surrounding areas, and it's been quite stable. This market is similar to Portland. My team operates in all 50 states.
- 2yTony W.Member since 2023 · 13 posts · 10 votesOP
Thanks for the reply Noah!
I'm still quite new to all of this, and I'm hoping to learn more from experienced REIs like yourself!
I'm a young investor both in age and experience, but I will be trying my best to make up for it with the only asset I have going for me which is time.
Hopefully I'll be able to research, study, and do enough due diligence on my end to jump into my first deal in a reasonable time frame.
Any pointers are greatly appreciated from this side, the more beginner, the better.
I will definitely keep you in mind on my journey! - 2yBrad HammondBusiness MemberReal Estate Agent · Portland, OR · Member since 2016 · 1k+ posts · 605 votes
Hey Tony, I think it depends on your goals and your unique situation. There are ways to make an investment work, you might need to be creative is all.
- 2yMike NussPro MemberReal Estate Entrepreneur · Portland, OR · Member since 2014 · 451 posts · 328 votes
@Tony W. you can be a successful investor in any market, under any market conditions. There's a strategy that will always work. So when I see questions like these, there's no answer to be given, only questions to ask.
What do you want to do? What fits your personality? What are your goals and vision of your future self?
Where, how, when and what you invest in should be based on those answers, and not someone's opinion on an internet site.
That being said, discussing with other experienced investors is a way to flesh all this out. BP is great for it online. Investorlab is great for it in person in Portland (January's meeting will be epic).
- Real Estate Agent · Portland, OR · Member since 2022 · 16 posts · 13 votes2yAs everyone else states, I think the first question would be "what kind of real estate investing suits me?". I have one client that is looking for a live-in flip and hates the idea of ever being a landlord. If you're open to house hacking, a duplex in Oregon City or the surrounding areas might be a nice way to start.
Depending on your finances and goals you'll be able to narrow down location. If you are looking for a flip and have a good budget, Lake Oswego might be a good choice for you (homes tend to be pretty pricey there) - if you're looking for a more affordable long-term hold, Oregon City, Clackamas, Milwaukie, Tigard may have something that suits you.
If you need any help looking in those markets, let me know! I'm a realtor that works out of Clackamas (Sunnyside), but lives in West Linn. I spend a lot of time in these areas. :)
Good luck! - 2yTony W.Member since 2023 · 13 posts · 10 votesOP
Quote from @Emily Van Siereveld:
As everyone else states, I think the first question would be "what kind of real estate investing suits me?". I have one client that is looking for a live-in flip and hates the idea of ever being a landlord. If you're open to house hacking, a duplex in Oregon City or the surrounding areas might be a nice way to start.
Depending on your finances and goals you'll be able to narrow down location. If you are looking for a flip and have a good budget, Lake Oswego might be a good choice for you (homes tend to be pretty pricey there) - if you're looking for a more affordable long-term hold, Oregon City, Clackamas, Milwaukie, Tigard may have something that suits you.
If you need any help looking in those markets, let me know! I'm a realtor that works out of Clackamas (Sunnyside), but lives in West Linn. I spend a lot of time in these areas. :)
Good luck!Thank you very much for your response!
Our current situation would have the option of house hacking be eliminated unfortunately.
Technically our budget would be lower just to get our feet wet for experience, but if the deal is right a higher priced entry wouldn't be a problem either. The preference would just be a ' softer ' entry to get acquainted with the world of REI.
What we're really interested in might fall into lines with LTR, or a fixer we can fix and rent type of situation.
We live in the Clackamas / Sunnyside area right now actually!
Appreciate the response Emily, we will definitely keep you in mind as we continue navigating into the world of Real Estate investing. - 2yCorby GoadeBusiness MemberInvestor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
Quote from @Mike Nuss:
@Tony W. you can be a successful investor in any market, under any market conditions. There's a strategy that will always work. So when I see questions like these, there's no answer to be given, only questions to ask.
What do you want to do? What fits your personality? What are your goals and vision of your future self?
Where, how, when and what you invest in should be based on those answers, and not someone's opinion on an internet site.
That being said, discussing with other experienced investors is a way to flesh all this out. BP is great for it online. Investorlab is great for it in person in Portland (January's meeting will be epic).
I love this answer. People tend to think that investments "don't work" in their market, as if NO ONE is buying property other than for primary residences. I see posts on here every day saying that you can't flip in X market or that BRRRR doesn't work in that one. It's 100% a limiting mindset and that mindset will subtly convince you that your lack of action is justified. People invest in every market everywhere in the country- you just need to understand the how and why.
- 2yMike NussPro MemberReal Estate Entrepreneur · Portland, OR · Member since 2014 · 451 posts · 328 votes
@Corby Goade man, I know, it's insane. Just drive around Portland. Yep, no one's making millions of $'s anywhere around here. Can't do it. Not possible.
It's better just to cChange your entire life and learn about a market you've never even been to, have no relationships in and would literally be starting from scratch.
- 2yTony W.Member since 2023 · 13 posts · 10 votesOP
Quote from @Mike Nuss:
@Corby Goade man, I know, it's insane. Just drive around Portland. Yep, no one's making millions of $'s anywhere around here. Can't do it. Not possible.
It's better just to cChange your entire life and learn about a market you've never even been to, have no relationships in and would literally be starting from scratch.
Since you're from Portland what are your thoughts on the surrounding areas outside of Portland?
Such as Beaverton, Fairview, Gresham, Troutdale, Wood Village, Oregon City, Clackamas, etc.
I would definitely like to stay local as I'm starting out, and really wish our situation could permit house hacking, but yeah I've read a lot of comments online about how tough it is over here. Not asking for millions though! - 2yMike NussPro MemberReal Estate Entrepreneur · Portland, OR · Member since 2014 · 451 posts · 328 votes
@Tony W. tertiary markets have been strong for a long time, like 9 yearsish time. Demographics are a cycle, almost every demographic (economic and population) has seen the tertiary markets of Portland outpace Portland the past year or so. So yeah, if you want to house hack in a tertiary market, that's a solid option.
My 2 cents on house hacking
1) Find a property where you want to live short term and rent out long term. If you really want to be a real estate investor (buyer), be where you get excited. Make relationships in that area and go buy some real estate.
2) The tertiary markets are most likely going to have a higher property tax per unit because of the way our property taxes work. It's a big factor for me and why I invest almost exclusively in the **** hole neighborhoods of the 90's. Way better tax to purchase/rent ratio.
3) Small plexes are a great way to maximize leverage, lower cost of debt and maximize economies of scale. That's one thing I would go back and teach myself if I could.....my first purchase would've been a 4plex and would've signifcantly changed the route I went and experience I earned my first 8 years. - 2yTony W.Member since 2023 · 13 posts · 10 votesOP
Quote from @Mike Nuss:
@Tony W. tertiary markets have been strong for a long time, like 9 yearsish time. Demographics are a cycle, almost every demographic (economic and population) has seen the tertiary markets of Portland outpace Portland the past year or so. So yeah, if you want to house hack in a tertiary market, that's a solid option.
My 2 cents on house hacking
1) Find a property where you want to live short term and rent out long term. If you really want to be a real estate investor (buyer), be where you get excited. Make relationships in that area and go buy some real estate.
2) The tertiary markets are most likely going to have a higher property tax per unit because of the way our property taxes work. It's a big factor for me and why I invest almost exclusively in the **** hole neighborhoods of the 90's. Way better tax to purchase/rent ratio.
3) Small plexes are a great way to maximize leverage, lower cost of debt and maximize economies of scale. That's one thing I would go back and teach myself if I could.....my first purchase would've been a 4plex and would've signifcantly changed the route I went and experience I earned my first 8 years.We have capital, and I'm not exactly sure on how the numbers look like investing into a 4plex, but it's possible we can make it.
House hacking is definitely out of the equation for us.
How would you feel about just buying a 4 plex straight to 20-25% down without owner occupancy
Also I'm surprised you mentioned you would do a 4plex first as someone whose going into their first investment with 0 experience, but I'm open to anything, I have even thought about constructing a duplex from the ground up, but it seems like that's a long road for a first timer. - 2yMike NussPro MemberReal Estate Entrepreneur · Portland, OR · Member since 2014 · 451 posts · 328 votes
@Tony W.in regard to how "do I feel". Me personally, I feel a 4plex with as low down as possible, that still has a suitable debt service in relation to the income makes sense to me. I mentioned 4plex because it's probably the highest amount of leverage one can get on their first investment. It's still essentially "newbie" investing, management is pretty simple, maintenance isn't at a scale that's too difficult and you'll get the best economies of scale. So it's purely a mathematical opinion, which is why I mentioned it. I think you should do what's best for you. I would say, an existing 4plex would be much simpler than ground up duplex. Ground up, expecially in our area, is not for the faint of heart. It takes skill, expertise, time and most importantly, liquidity. Also, getting the construction loan once permits are approved requires experience, from most lenders. So that should be factored in as well.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
Yes
District Invest Group545 Reviews - West Linn, OR · Member since 2023 · 35 posts · 23 votes2y
Just wanted to say hi, my primary residence is in West Linn, and thinking of buying my first investment property, probably sticking close, like OC, Gladstone, Tualatin or Wilsonville.
- 2yTony W.Member since 2023 · 13 posts · 10 votesOP
Quote from @Mike Nuss:
@Tony W.in regard to how "do I feel". Me personally, I feel a 4plex with as low down as possible, that still has a suitable debt service in relation to the income makes sense to me. I mentioned 4plex because it's probably the highest amount of leverage one can get on their first investment. It's still essentially "newbie" investing, management is pretty simple, maintenance isn't at a scale that's too difficult and you'll get the best economies of scale. So it's purely a mathematical opinion, which is why I mentioned it. I think you should do what's best for you. I would say, an existing 4plex would be much simpler than ground up duplex. Ground up, expecially in our area, is not for the faint of heart. It takes skill, expertise, time and most importantly, liquidity. Also, getting the construction loan once permits are approved requires experience, from most lenders. So that should be factored in as well.
Appreciate your insights Mike! Everyone here at BP has been very helpful from my first thread created here. I appreciate all of you :)
- 2yTony W.Member since 2023 · 13 posts · 10 votesOP
Quote from @Karen Chow:
Just wanted to say hi, my primary residence is in West Linn, and thinking of buying my first investment property, probably sticking close, like OC, Gladstone, Tualatin or Wilsonville.
Do you have any thoughts on Gresham at all?
- Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes2y
@Tony W. Gresham and Rockwood would be my last choice. Probably good cash flow but problematic tenants. Anything is possible and people invest there but dangerous area. Gladstone probably great @Karen Chow.
- 2yJonathan StonePro MemberRental Property Investor · Camas, WA · Member since 2020 · 284 posts · 202 votes
Quote from @Tony W.:
Quote from @Karen Chow:
Just wanted to say hi, my primary residence is in West Linn, and thinking of buying my first investment property, probably sticking close, like OC, Gladstone, Tualatin or Wilsonville.
Do you have any thoughts on Gresham at all?
Any areas you are considering. Take a friend and drive through at night. If you don’t feel comfortable, probably not a suitable investment. If you don’t mind it then maybe it works for you.
Each person has their own risk tolerance and tolerance for tenant types. There is a reason people can make solid investments in some “higher crime” areas. It’s not usually for me, could work for you. I need my wife to be able to drive by a place and feel safe.
- 2yMike NussPro MemberReal Estate Entrepreneur · Portland, OR · Member since 2014 · 451 posts · 328 votes
Quote from @Jeff S.:
@Tony W. Gresham and Rockwood would be my last choice. Probably good cash flow but problematic tenants. Anything is possible and people invest there but dangerous area. Gladstone probably great @Karen Chow.
Yep, Rockwood is tough. It's sandwiched between the more expensive markets from Portland to the west and Gresham to the east. You can get a better rent to price ratio there, most likely, but that comes with more requirements from a management perspective. Possibly more from a vacancy, credit loss and maintenance as well.
Gladstone is a great market. Blue collar, limited supply, good schools, close to the arterials that bluer collar workers require. Plus it's quaint enough and low enough supply to cater to blue collar earners making closer to the 4 member family median income.
- 2yJesse EdwardsPro MemberMember since 2021 · 17 posts · 7 votes
Another Portland Resident and Investor would love to connect with other locals. I too have found it hard to find cashflow opportunities here.
- Member since 2023 · 13 posts · 21 votes2y
I have a sfh in Portland Multnomah county. I absolutely don't recommend it. Multnomah county has the highest taxes in the nation just behind new york. The state of Oregon has some of the most tenant friendly laws and Portland has even more tenant friendly laws. You will pay your tenants to leave. There are no such things as leases that you can terminate. Once they're in they're in and they're hard to get out.
The cost of housing is stupidly high. You're going to pay a fortune and I have yet to find the rents to be able to cover the fortune you're going to pay. I have been trying to 1031 my property into something else locally and I just can't make the numbers work. There are far better opportunities in other states that have far lower taxes far lower housing prices and far business friendlier places. As far as houses appreciation goes my house was worth 400k 6 months ago and today it's worth about 370. So it depends but right now I've seen a loss of value in the last 6 months.
But I'm not good at this either so take what I say with a grain of salt.
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