Where to invest? Portland or Oakland ?

Question

Hello Everyone,

First time investor and first time posting on bigger pockets. Im an investor from Oakland CA. Looking both in my area and out of state. Im looking to find deals on buy and hold multi family/ sfr with in law unit properties that will be cashflow positive after rehab. Ive been searching in Oakland for a bit now. I know deals are out there but not for a non cash heavy buyer such as myself. Its hard to be competitive with financing in my market. Ill be using a HELOC from my first home to make the purchase. Ive also looked in Portland because I love the area and its a lot less competitive. I'm just wondering about the actual prospective forecast of the market in Portland as I'm unfamiliar with the area a point in the right direction as far as neighborhoods to concentrate on. Investors and professionals in the area, you're expertise/input is graciously accepted.

Thank You

Michael Hastings · Answer

Hi Steven,

I grew up in Oakland, and was there through two real estate booms and busts (early 90's and 2007-2008).  We still own my childhood home there in North Oakland, which funny enough was 25K in the late 70's when my parents purchased it.  Needless to say, it is worth a lot more than that now with no encumbrances.  When I wanted to get back into the Real Estate game about a year ago, I also investigated the Oakland/Berkeley/Richmond/Vallejo markets for long term investments, and you are right, most of what was available on the MLS were not "plug and play" deals.  Many of the deals that I was after would barely squeak out a monthly profit, based on rental projections and expenses.

However, as I have found, now living in Denver which is another "hot" market, the MLS is not where deals we want are found in these hot markets.  There are off-market deals, driving for dollars deals and other methods of getting property in these areas that make investors who dig for these so successful.  Like @Chris Mason states, in the Bay Area, the buyers committing to deals on the MLS are not as sweet as many lead us on to believe (when we considered selling my childhood home in 2015, we tested the MLS market and there were many cash offers, but they were all discounted - There were a lot of jumbo with good down payment offers as well, but we decided against selling).

Although I do not know the Portland market and cannot make comparisons for you, I would ask that you use BP to try and connect with other investors, lenders, speculators and wholesalers in the Bay Area, and find out how they are keeping the wheels turning, as not everyone is coming to the table with all cash or loads of money down, as the process would come to a halt.

Hope this helps, and good luck!

Chris Mason · Answer

Quick note: If even half of the supposed "all cash" offers were real, and/or not low-ball, and/or not completely made up out of thin air by listing agents, I'd literally be unemployed. Watch your step, there is "cash offer" BS all over the place in Oakland, and stepping in it can be de-motivating!

This happens all the time:

Two days pass.

Listing agent calls me on a Saturday to chat about how well qualified the buyer is.

Buyer's agent emails me a fully ratified purchase contract Monday.

But allegedly there were "multiple cash offers for over asking"? LOL!

That being said, yes, it's still a hot market. It's just not nearly as "hot" as listing agents would have us believe. Again, the proof is quite simply that I'm not unemployed, which I certainly would be if listing agents were telling the truth about even half of these "cash offers."

Steven R. · Answer

I hear ya, but stuff off the MLS is still tough to make rent work. Having a hefty amount of capital for purchase/rehab and access to off market deals is definitely an edge I don't have. Not discouraged just trying to look outside the box/bay area for other options.