Seeking Advice on First Real Estate Investment – Focused on Cash Flow & Stability.

[David Suho]

I’m new to real estate investing and looking for input. My goal is to diversify with an investment that generates steady cash flow, even if it requires a larger upfront investment and lower overall returns.   I’m based in Portland, Oregon, where residential investing seems challenging due to landlord-unfriendly policies and negative cash flow on higher-quality properties. I’m also not keen on out-of-state investing or syndications due to the lack of control.   Investment Criteria: • “Core” strategy – High-quality properties with minimal renovations or maintenance issues • Stable tenants & cash flow – Long-term leases, steady occupancy • Commercial preference (?) – Considering Class A properties with established tenants • Less focus on appreciation – Prioritizing income stability over potential future gains   Current Opportunity:   I’m evaluating a retail property in downtown Portland with: • >80% occupancy, most tenants in place for 10+ years • Decent cap rate (6-7%), NNN lease • Well-maintained, high-quality building, with existing HOA which will take care of maintenance.   I recognize that commercial real estate is struggling, with ~30% vacancy in downtown Portland and homelessness issues, but I believe this property’s tenant stability and quality make it a lower-risk option.   Would love to hear thoughts from experienced investors—does this approach make sense for a first-time real estate deal? Any other investment ideas that align with my goals?

[Mark Updegraff]

David, this deal could work, but I’d want to dig into a few things first. 80% occupancy with long-term tenants is solid, but what happens if a major tenant leaves? Are they at market rent, or locked into below-market rates? With 30% vacancy in the area, filling space could be a challenge.

NNN leases are great for minimizing expenses, but how much control do you actually have? Are there any caps on pass-through expenses? And with an HOA handling maintenance, have you checked their reserves? If they're underfunded, you could get hit with special assessments.

Since you want to stay local and focus on cash flow, commercial makes sense, but have you considered industrial or flex space? They tend to be more stable than retail right now. Mixed-use with some residential could also add diversification while keeping it simple.

What’s the tenant mix like, and how are you structuring financing? Happy to take a deeper look.