Building real estate portfolio in Beavrton/Portland

[Kalyan Kondapally]

I live in Oregon and just starting to look at building a portfolio for long term equity building and cash flow.  I am interested in Multi Family rental properties and was curious how to find any opportunities for co-investing in 4-6 unit properties. Also, looking to connect with local investors and understand how to build portfolio. 

[Melissa Hartvigsen]

Hello @Kalyan Kondapally, 

Connecting with other investors: A great place to start connecting with other local investors is here on Bigger Pockets, and by attending the local NW REIA events; some events are free so you can check them out before you pay to join. I recommend visiting the Investor Round Table and the Investors Forum. They are held regularly, so if you miss it this month you can go next month. You can see the calendar of events here: https://www.northwestreia.com/events

A note on financing: Multifamily units with 4 or fewer properties are treated differently from a lending perspective than 5 units and above. 4 or fewer are considered "residential" by lenders can use traditional financing (i.e. 30 year repayment terms, and down payments at 25% for multi-units for investors, or 15% on a single family home). 5 or more units is considered "commercial" by lenders and the loan terms are shorter with higher down payment requirements. 

Where to find multi family properties: Occasionally you will see some multifamily units listed on the MLS, so those will also show up on Redfin, Realtor.com, and Zillow. For properties 5 units and above, these often trade off market. The larger commercial brokers usually offer listings to existing clients first. Then, if no one in the existing client pool is looking to acquire a property, it may get posted on Loopnet.

An alternative: If you have trouble locating someone to partner with, or come up with such a large down payment, you may want to consider building your portfolio by house hacking. I did that, and currently live in Beaverton.  I started with a single condo, and ended up moving 5 times in 7 years. Later, I did two 1031 exchanges to use my equity and trade up from condos acquire more units.

The "hack" is you can put less money down than an investor (can be as little as 3%) and get better interest rates.  It does not mean that you cash flow right away.  You have to commit to living in the property for at least a year before renting it out in its entirety, though you can have roommates to help offset your mortgage payments while you live in the property.  Another benefit to house hacking is that you may be eligible for home buyer incentives, investors do not get this option. In Beaverton there is a $25,000 down payment assistance program for current residents. Send me a PM if you are interested in learning more about the down payment assistance and I can connect you with a lender who offers it.

Good luck and best wishes for your investment journey!
Melissa