Portland Oregon - Crazy Market

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Portland Oregon - Crazy Market

Say Teoh
Residential Real Estate Broker · Portland, OR · Member since 2016 · 92 posts · 31 votes

Hi All:

Have not checked in the BP for a few weeks, as I have been busy running around Portland Metro area looking for myself a property to flip, I have looked at atleast 20 houses, but have not been successful yet... either my ARV is too low or other people are crazy... :) Just want to rant/share a deal I was in...

Saw a nice sfh for sale at slightly below market price at the uber hot westmoreland neighborhood. List for 350k on rmls, immediately there was a frenzy, like throwing a peace of wagyu beef into a tank of hungry piranhas. Appointment to see the house was impossible to get, the LA got so many requests, in the end she gave up and just have a 2 hour open house. The house is in a great condition, I thought I can value add by finishing up the basement with a family room and a master suite with a bathroom, and then flip for some nice profit. Thinking "Say, you are a genius!" Now comes the offer... thinking long and hard and re-do my estimates 100 times like in GMAT, I place an offer $40k above the asking, yes, you read it right, $40 grand above listing!..... Then I had nightmare of being a fool for over paying. Next day, I saw the LA's email in my mail box, so excited, finally got myself a flip.... nope.... she was just kind enough to inform me that I got rejected and there were 25 offers, 2 of them cash, and the highest is $115k above listing, and I am one of the lowest! @_@  wow, just wow..

ok, thats my rant... back to the market to get myself a flip.. :)

Good luck all!

Say

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y

@Matt Good  you got that right.. my dad got into real estate in 1966.. at the time we lived in a 2 bd apartment in Cupertino CA... our car was a 1957 Volks bug with no back seats  .. my brother and I sat on pillows  LOL... been at the bottom.. that's for sure.

But once my dad got into RE and excelled at it .. I grew up with it.. and things got better and I got an education at a very young age.. its amazing what you soak up at 8 to 10 years old when your going on RE appointments with your dad..

However its all I have ever done.. got out of high school tried collage for one year ( actually just skied all year in Colorado) came back got m license to sell RE and never looked back.

My Real Estate licesne set up everything I have ever done in RE.. Everything.

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  • Scott Radetich
    Investor · Portland, OR · Member since 2016 · 47 posts · 36 votes
    10y

    Picking up a home for 350k in Westmoreland....  Now that's wishful thinking. 

    I keep thinking people are crazy, but those homes I've lost out on sold for way more than I ever though they would.. So maybe they aren't so crazy after all.

    1Reply
  • Derrick Aragon
    Investor · Portland, OR · Member since 2016 · 213 posts · 60 votes
    10y

    you need to know your market better, and I would say 3 areas you know in and out. One flipping is tough in this part of the cycle and you need to get the cost of your money lower and know your market better and competition. 

    0Reply
  • Jessica S.
    Real Estate Agent · Portland, OR · Member since 2013 · 154 posts · 67 votes
    10y

    Could be worse:

    http://vancouversun.com/business/real-estate/vancouver-home-sells-for-1-million-over-asking-price

    0Reply
  • Evan Bellingar
    Investor · Newberg, OR · Member since 2016 · 90 posts · 19 votes
    10y

    $115K above asking! Wow!

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Say Teoh   well sure is a good time to be a builder and a seller... I have sold 11 homes in the last 3 weeks.. none over ask but all full price.. and these in the metro area.  New construction in the burbs is not quite as crazy as having to deal with inner PDX

    I did close on one off of Hawthorne... for 350k in Oct. I in process of doing a pop top.. but maybe I just flip it to you for 100k more than I paid.

    I just got an unsolicited offer on a property I bought 45 days ago I Charleston SC for 200k more than I paid for that one..  

    So I am on the exact opposite end of your dilimena..  Like is this for real  LOL.

    ON the PDX subdivision homes no bidding wars as I stated but I rose prices 10 to 15k per door.. so that's just on top of a decent margin.

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  • Robert Laird
    Real Estate Broker · Portland, OR · Member since 2014 · 292 posts · 114 votes
    10y

    @Say Teoh Maybe you should try looking at Off-Market properties? I don't know about others, but I find 99% of my deals not listed on the MLS. It is definitely a less fished pool.

    0Reply
  • Robert Bowles
    Lender · Portland, OR · Member since 2013 · 88 posts · 38 votes
    10y

    My last flip my "plan" was to sell at $299,000.  My Realtor suggested we list at $349,000.....sure!

    Finally sold sold for $420,000!  This is in N Portland by PCC.

    Great for me, but now I have to find something to work on before my tear off is ready to begin and it has definitely been difficult.  I also keep running into projects that I see potential in and keep getting out bid.

    I need to start looking 2 deals out just to keep one in the pipeline.

    1Reply
  • Say Teoh
    OP
    Residential Real Estate Broker · Portland, OR · Member since 2016 · 92 posts · 31 votes
    10y

    @Scott Radetich Yes, I am starting to think I am crazy thinking I can get a good deal in that area... When you are that different from other, maybe you are the crazy one... :)

    @Derrick Aragon You are right, I am working on that, I have now looked at enough houses ( about 30 )to get a good feel on it. I try not to depend on too much hard money, so to drive my cost down. I try to understand the market and competition, but hard to understand crazy people :P

    @Jessica S. thanks for the comfort read... if I am that listing agent, I would be so happy... but being the buyer agent, i go crazy... Somehow I feel there is some truth as the article said, maybe LA playing games with a lower than market listing, trying to start a bidding war.

    @Jay Hinrichs I am jealous of your new construction. I looked into them a bit, but getting the land ready to build takes like 2 years, not sure if the market still hot in 2 years time. I am thinking maybe starting with a small land with a single home on it, but not sure if it is feasible. 

    Hmmm... pop top, as in adding a 2nd storey or tearing down to the foundation? With this market, 450k might still worth it, :) I have seen several REO near hawthorne goes for around 425k to 430k.

    @Robert Laird I did think about doing some marketing, sending out letters to my area of interest. I am a licensed real estate agent, so I am not sure if I am allowed to do that. Have not looked into it closely, but somehow I have the impression of we are not allowed to do that.

    @Robert Bowles do you mind sharing more details of your property? I am always interested to learn more about other's project, so I can have a better understand of my project estimate and also the market.

    0Reply
  • Randy Johnston
    Residential Real Estate Broker · Beaverton, OR · Member since 2014 · 335 posts · 149 votes
    10y

    @Robert Laird, I know another realtor who does exactly that. You just need to be clear up front that you're a Realtor and that you will be purchasing the home for yourself. My principal is fine with me doing that, as long as I get sign-off on any letter I send.

    0Reply
  • Robert Laird
    Real Estate Broker · Portland, OR · Member since 2014 · 292 posts · 114 votes
    10y

    @Say Teoh I personally do not know the rules and regulations behind the conflict of interest when it comes to your real estate license and marketing, but it seems that @Randy Johnston would know what he is talking about. I am not positive, but I believe as long as you disclose everything and the firm at which you hang your license is fine with it, I think it is ok. Another way to find Off-Market deals would be wholesalers. You would be surprised at what some beginner wholesalers have under contract, but cannot perform on. 

    1Reply
  • Say Teoh
    OP
    Residential Real Estate Broker · Portland, OR · Member since 2016 · 92 posts · 31 votes
    10y

    @Robert Laird I am still waiting for you to send a good deal my way.. :) Hopefully I can meet with more wholesalers during the meetup next week. I am on a mailing list of a wholesaler, but the price they asking for is quite high, not too much difference from MLS, so my feeling is I am not really getting a deal.

    For dealing with wholesalers, is it normal to ask how much they got the property for and how much they are charging for their fees?

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  • Robert Laird
    Real Estate Broker · Portland, OR · Member since 2014 · 292 posts · 114 votes
    10y

    Of course you can ask. You are going to find that out at the time of closing anyways. 

    If a wholesaler is offering you a price that is competitive with the open market, then they are not a wholesaler. You will definitely be able to meet up with some legitimate wholesalers next week at the meet-up. 

    I currently have lots of stuff under contract, but anything I would wholesale is in Vancouver or Seattle area and needs development or intense remodel for the deal to be profitable. I am starting getting calls off some recent marketing, so hopefully I will have some fun properties to talk about next week. 

    1Reply
  • Matt Good
    Real Estate Investor · Sandy, OR · Member since 2014 · 113 posts · 16 votes
    10y

    This is where my frustration is right now... I understand that it's a Seller's Market. It's often difficult to find a deal but easier to sell. There's never a bad market for RE the rules just change. Yes the demand in PDX is even higher. I decided to complete a few tasks to give myself an edge over my competition. 1) Gone is the idea of having a contractor(s) perform all work. The margins are just too tight in this market. I've done a few flips already so why not just count on getting my hands dirty? 2) Convince my Wife to become not only a Realtor but my exclusive Realtor. Boom! Now as soon as something hits the market I'm already inside inspecting the place and not having to wait 24-72 hours on a Realtor to get me into the door. People are busy I get it! :-) ... The only other task is to become a cash buyer. Ha! I'm now going on 2 business days (4 days total) waiting for my HML to approve the property before submitting an offer not to mention all of my other HML's that can't return a simple phone call, text or e-mail. BIG pet peeve of mine even though I'm told that that's just RE. Not acceptable. So you can imagine all of the other offers flooding in by now. This is one way to lose in this market. You have to be FAST and AGGRESSIVE! Like the cash buyers offering sight unseen.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    10y
    Originally posted by @Evan Bellingar:

    $115K above asking! Wow!

     Well if it were priced $50k higher, then it would have only gone $60k over asking. If it were priced $100k higher, it would have went $15k over asking.

    In my market I usually know what price a property will close at regardless of what the list price was. Also in pricing a property, you have to do what the market tells you to do.  Sometimes that means listing at well under the list price, sometimes it means overpricing to come down from the list price. Every neighborhood in a metro area will be different in it's pricing, and the understanding by different agents in how to price appropriately will be different. The agent here may have been a great agent who did exactly what the market told them to do in under pricing it....or they might have just been stupid and under priced it, but usually the market is self correcting where there is enough liquidity.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Matt Good  in this market having a RE license is in my mind almost mandatory if your going to be flipping 500k plus homes.. unless you can get one of those next to nothing fee brokers.

    plus having instant access to MLS...

    in our case were we will sell 35 plus homes in the PDX market and my wife is the listing agent.. this is huge.

    the other thing is not having to borrow HML... bank loans at 6% and only pay interest on drawn funds is also huge...

    This many times is your competition and or the guys that can just pay cash.. and you have to use HML.. at these price points that's usually 15 to 20k..

    all of this stuff adds up to a nice profit  or if you have to pay full bore for it all.. deals get real skinny real fast and or can be losers.

    Were I don't have an advantage is I have to hire a GC.. so I pay them by the job and then subs are paid at cost.. but I do have to add that GC into my equation..

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  • Matt Good
    Real Estate Investor · Sandy, OR · Member since 2014 · 113 posts · 16 votes
    10y
    Originally posted by :@Jay Hinrichs the other thing is not having to borrow HML... bank loans at 6% and only pay interest on drawn funds is also huge...

    @Jay Hinrichs are you referring to a LOC such as a HELOC or business LOC?

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Matt Good  Neither.... they are stand alone construction loans from my bank.

    My personal residence is off limits to use as security for a business venture.

    Also do remember I am in the Twilight of my RE career so what works for me is not common for many who are starting out...

    And the bigger players that are your competition for these homes are builders in their own right many of them quite well off and profitable.

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  • Matt Good
    Real Estate Investor · Sandy, OR · Member since 2014 · 113 posts · 16 votes
    10y

    @Jay Hinrichs I see that makes sense ... I'm also not going to be one of those fellers who complains non stop about the big boys! This is a free market and we all started somewhere!

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Matt Good  you got that right.. my dad got into real estate in 1966.. at the time we lived in a 2 bd apartment in Cupertino CA... our car was a 1957 Volks bug with no back seats  .. my brother and I sat on pillows  LOL... been at the bottom.. that's for sure.

    But once my dad got into RE and excelled at it .. I grew up with it.. and things got better and I got an education at a very young age.. its amazing what you soak up at 8 to 10 years old when your going on RE appointments with your dad..

    However its all I have ever done.. got out of high school tried collage for one year ( actually just skied all year in Colorado) came back got m license to sell RE and never looked back.

    My Real Estate licesne set up everything I have ever done in RE.. Everything.

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  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y

    You really want see some crazy come to LA. 10 offers first day on a one bedroom condo. I am actually hoping one I am selling falls out of escrow so I can raise price again. I lost count on how many times I lost out to full price no contingency cash offers. Portland looks like a total under priced bargain as compared. Still great to hear about how Jay cleans house daily there though. Dude is the Ace in the hole.

    0Reply
  • Rob S.
    Investor · Portland, OR · Member since 2014 · 65 posts · 46 votes
    10y

    I feel your frustration. Portland is red hot right now. We put in an offer full price on an reo fourplex on ne Lombard among others and were certain we were going to get it, guess what la's email said "your offer is rejected, seller has decided to go with a different offer". It can be very frustrating but we never give up. You may also want to get into direct mailing, cost intensive but when one clicks you are sure to make a nice return. 

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  • Account Closed
    Rental Property Investor · Portland, OR · Member since 2015 · 338 posts · 332 votes
    10y

    @Rob S. was that the dilapidated plex that smelled funny built 1940's near NE 17th? If so, I also put in an offer when it was a First Look owner-occupied listing. The listing agent was even more curt when she rejected my offer, which was below asking. But we've dealt with her before--she mostly lists HUD homes. I called her last year about a triplex in NE and she hung up on me when I asked whether the tenant wanted to stay, lol.  I guess in this market, a LA can do/say whatever she wants and still come out ahead.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Matt R.   OFF topic  I just saw one of those stand up paddles boards that have steps in them so you can do like a starimaster type step and propel the board. do you have any of those.. also has handle bars so you get better balance.. now that is one I might be able to manuvour

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  • Rob S.
    Investor · Portland, OR · Member since 2014 · 65 posts · 46 votes
    10y

    @Account Closed That should be the same property. It's the white 4-unit with basement accessible through the back. I think it's Fannie Mae owned. In fact, we have lost count of the number of houses we lost to higher offers that are way above asking. But the returns on the ones that we do get make it worth it. Happy Hunting:)

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  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y

    @Jay Hinrichs I think I saw an early version of those. It might be easier if the water  is calm. Looks like a leg work out but likely very tired legs.  Like running in water.

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