All Forum Posts by: J. Bradley N.

Hi Josh, I'm in a similar situation as you and new to real estate investing. Have you considered using that equity to build an ADU on your current property? The City of Portland is currently waiving SDC fees for ADUs through July 2018. If would save to about $14k in fees, an opportunity hard to pass up. https://www.portlandoregon.gov/bds/article/569789 Something to think about!

@Steve Moody

Terrific news! This is a game changer. I may take the cash out, build an ADU, live in it temporarily and rent out the front house.

Does anyone know how long you have to prove rental income so as not to run into issues when trying to finance a second house?

Thank you everyone for the responses!

@Account Closed, 

I'm in St. Johns, the lot is 5000 sq. ft with an alleyway behind it. Zoned for R1 medium density residential multi-dwelling. I'd like to avoid tearing down the main structure, a 1920s bungalow, and utilized the back alleyway as entrance to a duplex or triplex in the back. Again, this is all new to me, so I'm still learning about what it would take to make this happen.

You bring up a good point about the ROI of a single ADU. Unfortunately, according to the City of Portland website:

I'm not sure I could make that happen by the end of next month. The city talks a lot about promoting density, but they don't always seem to follow through. Hopefully this waiver will be extended.

Can you elaborate on this? Thank you.

Austin,

I'll run the numbers, tell me if I'm way off. 

House appraised at $282k, so 80% of that is about $225k. After closing costs, I'd net about $25k.

Mortgage + insurance + taxes would mean monthly payments around $1250. I watch my neighborhood's rental market like a hawk, I'm confident in a year I could rent the house out for at least $1750. 

Cashflow would still be around $500. 

Say,

Always good to meet another EE! I'm pretty familiar with what houses go for in my neighborhood, and am fairly confident it would sell for considerably more. I've been thinking about a HELOC, too, I like the idea that its separate for the 30-year mortgage.

Jessica,

I dislike the idea of getting into more debt as well, which is what was stopping me. Do you have any local lenders you like? I'm currently going through Umpqua, but I suspect there may be better rates out there. 

Steve,

We considered an ADU (even took a class!) until I started digging into the zoning of the property. Why build one when you can build two! I'm still learning the details, but i believe the city of Portland treats an ADU differently than a multi-family development, which is why they can be build on R5 zoned property.

First, let me introduce myself to this great community. My name is Brad, I've had a career as an electrical engineer for the past 10 years. Investing is something that is new to me, but its also very exciting. I've already learned so much from BP and plan on continuing my education.

Let me explain my situation.

I bought my house, which is currently my only property and primary residence, in Portland, OR in the summer of 2013 for $212K. It is a small, single-family bungalow on a 5000 sq. ft. lot zoned for multi-family use. It is right in the middle of an "up-and-coming" neighborhood which has absolutely exploded around us in the last three years. Coffee shops, new restaurants, apartment developments, etc. the place is thriving.

I am currently in the middle of refinancing. The house was appraised two weeks ago (to drop PMI) at $282k. I currently owe about $195k on it. Now, I plan to hold on to this property indefinitely because I expect it to keep appreciating. My fiance and I are planning on living in it for one more year, then renting it out and buying another house in the area or possibly Vancouver, WA.

The other reason I plan on holding on to it is to some day take advantage of its multi-family zoning. I'd like to eventually build two more units on the property and rent those out as well.

So on to my question.

Initially I was going to pull $8k out of the equity to do some minor remodeling, it needs a bit of electrical work and landscaping. HOWEVER, would it make sense to pull as much equity out as possible to use for other investments or as a down payment on our next property? Interest rate on the refinance is 4.125%.

I really like the idea of a low mortgage payment, which is why I didn't want to pull much cash out. But now I'm starting to think this is an opportunity I shouldn't pass up.

Sorry for the long-winded post! If you're still reading, I appreciate any advice on my situation.

Thank you!

-Brad