First Multi family home!

[David Cano]

Hello everyone!

I am new to investing and located in Portland, Oregon! I am looking into a Multifamily home, this will be my first property as well. I will most likely use an FHA in order to live in 1 side of the house. I noticed that Oregon is kind of difficult to find properties right now in terms of multifamily as well especially with some of them being occupied with tenants as well. I wanted to know if anyone has had any experience with things like this and if you have any other things you would look for when buying your first multifamily home

Thank you!

[William Sing]

Hi @David Cano,

Welcome to the exciting journey of real estate investing! I'm glad to see you're considering a multifamily home in Portland—it's a fantastic way to get started.

Portland can indeed be a bit tricky for multifamily properties, particularly with the current market conditions and tenant-occupied units. Here are a few tips to help you navigate this:

1. Tenant Considerations: When dealing with tenant-occupied properties, it’s crucial to understand the existing lease agreements. Make sure to request and review these thoroughly. An estoppel certificate can also help verify the terms directly with the tenants.
2. Market Research: Look into neighborhoods where multifamily properties are more common. Areas with good school districts, public transportation, and amenities tend to attract reliable tenants. 
3. Loan Options: Utilizing an FHA loan is helpful since it requires little down. Do note that there is a 5% down option that is conventional as well if you don't want the PMI. If you are doing a FHA loan on a 3-4 unit you will need to pass the sustainability test which can be a bit hard these days in Portland.
4. Property Condition: Pay attention to the condition of the property. Multifamily homes often require more maintenance, so factor in potential repair costs when evaluating a property. A thorough inspection is crucial and understand the difference between maintenance and bigger capital expenditures (capex) that you will need to save for. 
5. Local Regulations: Be aware of Portland's rental regulations and tenant laws. Oregon has strong tenant protections, and staying compliant is essential to avoid legal issues down the road.There a two major places to get forms and education. 
6. ROI vs. Cash Flow: Decide whether you're aiming for long-term appreciation (ROI) or immediate cash flow. Salem, for example, often offers better cash flow opportunities compared to Portland. If you're looking for more of an appreciation/forced equity play, Portland can be beneficial, especially if you consider house hacking.

Lastly, connecting with a local real estate agent who specializes in multifamily properties can provide invaluable insights and help you find the right deals. If you need more tailored advice or contacts for contractors and lenders, feel free to reach out.

Best of luck with your first multifamily investment! You're making a smart move.

Cheers,
Will