Portland Strategy

[Joseph Brown]

I'm curious of any investors in Portland Oregon. What are your current strategies? Obviously there is appreciation happening. Is anyone able to get positive cash flow off rentals with 20% down?

[Melissa Dorman]

Hey @Rocky Pe Benito, great question. All my properties have equity and cash flow, about $100-$200 per door. You still have to buy right in an appreciation market. It's just for every million dollars of real estate you buy in an appreciation market means you are gaining equity at $50k-$60k a year. You can't see that kind of wealth building in cash flow markets. The strategy here is to build enough equity through appreciation and then transfer that equity to a cash flow market. In other words, using simple math, you can use $50k as a down payment to buy a million dollar fourplex in Portland (5% down portfolio loan) that cash flows $100 a door. In 5 years, you will have made $250k in appreciation. Then take $250k and buy property in a cash flow market where cap rates are much higher. Or you can use that same $50k and buy a single house in a cash flow market and maybe make $10k a year in cash flow... maybe. After 5 years, you have $100k ($50k cash flow and a $50k property). Cash flow in Portland is more like an insurance policy. You need it in every property but it's not why you buy it. You need it to ride out any down turns to ensure you don't have to sell if the market drops.