4 Plex in Portland, OR or Not??

2 Replies

Dear BP, 

I'm currently gathering the financing to buy my first 4 unit rental property in the Portland, OR area, however I've heard some things that are giving me pause.. What I've heard is that there are good States to invest and become a Landlord and bad States - Grant Cardone for example speaks about this often.

Are there new laws in Oregon that favor tenants over Landlords and limit how much I can raise rents - 10% limit or something?  If so, would it be more wise to invest in say another location?  

Are there any 4 plex [or other multi unit] owners who are getting around these laws to their advantage and profit?

I plan on living in one unit for 12 months + 1 day, fixing up any units that are or become vacant, using an FHA loan (PP + rehab) and eventually raising the rents on all units.

Any sage advice and wisdom from 4 plex owners [and the like] would be extremely comforting & appreciated!



Hi Peter,

Portland does have strict landlord laws and you are correct there was recent legislation that gave tenants more protection. Read up on Senate Bill 608 that went into effect this year. 

The owner occupied move is a great option to secure financing. I just helped a client do the same in Bend. He bought a property with below market rents, at a below market price and is proactively updating the units while living there. I helped him put together the timeline, pro-forma and projections for the next 5 years.

Did your lender recommend an FHA? If you qualify, conventional loans generally have lower PMI.

 I specialize in the plex markets in Central Oregon, Portland and the Mid Willamette Valley.  I think you may be surprised at how difficult this strategy can be while being highly leveraged in our PNW market. 

@Peter Slivkoff

@Jay Hinrichs is a good connection to have. His wife is an agent in the area and they know the market well. 

FHA is a great product for a low down payment option. They have a renovation product too - FHA 203k if you want to renovate the property it is something to take into consideration. Keep in mind the self sufficiency rule for FHA though. In higher priced markets this rule can make it break each property;

The maximum mortgage amount for 3-4 unit properties is limited, so that the ratio of the monthly mortgage payment, divided by the monthly net rental income does not exceed 100%, regardless of the occupancy status. This is also taking into consideration, a 25% vacancy factor.

On a side note, if you go above conforming limits, there are portfolio options with low down payments that conventional doesn’t offer.