All Forum Posts by: Steve Moody

Thanks for the input @Jay Hinrichs & @Jeffrey Wannberg . I'm still kicking myself for not jumping on a duplex pretty much cross 209th a couple of years back. At the time the rent numbers would have made it tight to break even, today I'd be pulling in good cash flow with a couple of years of mortgage pay-down and extra equity. Where's Doc and Marty when you need them? 

My thoughts are that the typical buyers and renters of this new development will be different than the renters of the areas surrounding it so it could sustain the same or higher rents by being close to the new amenities, but not as expensive as new. On the flip side the additional traffic (T.V. highway is bad enough now, add 20k residents and watch out) and the availability of nicer homes nearby might disrupt the values around the area. 

As they say the only regret is not doing it sooner, and I feel that regret all the time. I don't want to feel it again in a few years, either way. 

As some of you may know there's a large development in the suburbs of Portland called "South Hillsboro" that's slated to add something like 8000 residences of all types (mix of SFH and multis). This will expand the city of Hillsboro to possibly become the 4th largest city in Oregon.

My question to the more experienced investors out there is this; what will this mean for the surrounding areas. Mainly older Hillsboro and Aloha/West Beaverton. These areas have lower costing homes and with that, lower rents. Will a large new development push these home values down, or will rising tides raise all ships? Will rents typically stay the same, or will a large influx of new homes and multis force prices down (and/or vacancies up)?

Any thoughts on investing in the surrounding areas in general?   

Looks great @Jay Hinrichs  How long did the rehab take? 

If he's been a good tenant I'd just allow him to go month-to-month and ask they he gives you 60-days notice. You have no way of knowing if he's ready to buy and will move in 60-days, or would really like to buy but will be renting for another year or more. I wouldn't start looking for new tenants with plans to kick him out, I wouldn't try to raise the rent any more than you were planning to at the end of the lease anyway (you were right?). A few bucks extra per month will be wiped away with vacancy anyway. 

Every street in the city of Portland is a free RV park full of druggies, why would anyone pay to stay in one? If there's value in the land perhaps that's the play, but I wouldn't count on making money off of RV parking in Portland. 

Will the place cash flow (or at least break even) if they're not living there and renting out both sides? That's what I'd base by numbers on, then whatever cash flow they'd get is the amount they reduce their rent by. 

An option for someone in this situation would be for them to pay the same amount in rent as they were going to pay for a SFH mortgage. Just pay that extra to themselves in the form of savings (or even accelerated mortgage payments). That way if they want to move out to a SFH later they won't be in shock with a sudden increase in mortgage, and they'll have a some savings for a down payment saved up.

As for predicting a market crash, if I could do that I'd be sitting on a beach somewhere. I don't see the Portland area going into a big downturn. The values could taper off, or even drop a little. Rent is set by supply and demand, and the demand seems strong as ever in this area, and supply sure isn't being built up fast, so unless one of those changes rents will probably be pretty stable here. I honestly think this huge increase in rents we've been seeing was the correction and we're still a cheap place to rent compared to other west coast metros. 

Looks like it was sold on the steps of Multnomah County Sheriffs Office, I'm not sure if the $3500 was accurate or some weird anomaly when listing home sold on the steps. I highly doubt that even land the size of Mill Ends Park would sell for $3500 in Portland. So there's something else at play here

https://www.auction.com/details/6735-se-flavel-st-portland-or-97206-2154797-e_7056h/

@Account Closed It sounds like they're not interested in really managing the property, so maybe it would be a good time to get them to talk about selling. They might scoff and say why sell when we can pull in money without lifting a finger, they might say good idea and sell it to someone else who'll evict you, or they might be willing to sell it to you and owner finance. They still get an income and you get to start fixing up the house and collecting rent. 

I would suggest doing a lot of research. Figure out what the ARV on the house really is and work from there. Get estimates on how much it will cost to bring it up to the ARV and write up a good offer. Then present it to them. If you just ask they might say "sure, make an offer", but if you don't have solid reasoning for your offer they may decline and not want to talk about it any more. This sounds like an opportunity, you just have to work it. Good luck

EDIT: In addition to all of that, make sure it's still a good deal for you in the end. It has to cash flow after all expenses or you're just buying someone else's money pit 

@Genna Golden Congrats, it sounds like you got a good place there, and hopefully easy to manage since it's next door! 

I never take management out of my calcs but even with management you'd probably be making money. Your rents must me good in that neighborhood, over here on the west side people are still paying 1200-1300 for a 3br duplex (b- to c+ hoods), but running your numbers through my calculator you must be getting around $2300-2500 each unit? This is why I'm only looking at small multis in Portland, the economy of scale makes it work where SFHs just wouldn't cut it.