Getting started with a house hack in PDX metro area

[Colin Beckley]

I just started my search for my first house hack property in Portland, but I'm struggling to make the numbers work and wanted to get some input from other local investors.  I've got ~25k for down payment and closing costs and I've already qualified for 3% down on a 350k purchase.  I'm looking for a single-family home, 3-4 bed/2+ bath.  I'm aiming for 300-325, as 350k with 5% down still has a monthly payment that will be too large even with 2 other roommates.

The areas that I can afford are the Brentwood-Darlington area, some places in St. Johns, or outside of 205.  Locations aren't the best, but I'm thinking that I just need to get in there and get something.  Is cash flow with low down payment just a unicorn around here? Do people mostly rely on appreciation and flipping to build up to bigger properties?  What is the renters market like on places outside of 205?

[Mathew Wray]

Hey Colin,

Welcome to Portland! it’s a rough cash flow market, that’s for sure. It’ll be even harder to find a property that makes sense at 3% down. But, you’re on the right track. You can find 3/2 and 3/1.5 in those areas for your budget. Ignore the total fixers (which won’t qualify for conventional) and focus on the liveable, but dated properties where you can add value and equity over time. Obviously, living with roommates will help defray costs. 

You can go east of the 205 just fine-you just need to watch the neighborhoods. Some are great. Some aren’t. The rental demographic can be totally different. As long as you’re aware, you can find a great property to start your portfolio. I was at a cosmetic fixer ranch yesterday that is exactly the kind of property to target.

Over time you’ll gain equity and have others paying down your debt. Then, once you’ve built up that equity, had others pay down your debt, and taken advantage of the tax benefits, you can exchange it for a property with 20% down and get cash flow. Or, hang on to it and just know that you may end up having to feed it for awhile while it continues to build for you. 

Let me know if I can be of any help or answer any questions. We’ve got a great community and they may have a different take. 

Best of luck!

[Colin Beckley]

Hey Mathew,

Thanks for the in-depth answer! I'll keep looking and hopefully I can snag a deal before the summer feeding frenzy begins.  I've been trying to find more basic/newer properties, but what you're saying makes sense (find a dated but livable property to start out).