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Updated almost 3 years ago,
Advice for Oregon Market
I am stuck and need some advice. I am a new investors in the Salem Oregon area and have been trying to buy my first small multi family property in my local market for nearly a year. I have pursued dozens of leads off the MLS and they have all resulted in loosing out to other buyers willing to pay more. I'm analyzing deals using actual rent and expense numbers gathered from property managers, tax records, insurance companies, etc. Many of the deals are currently occupied with tenants paying well below market rent and with Oregon rent control so long as the current tenant chooses to stay the rent cannot be increased to market. Once I find what seems to be a reasonable deal there are multiple offers and the actual price is much higher resulting in negative cashflow in most cases. Buying these deals does not seem wise, so I continue to move onto the next lead.
Is the market so hot that people are willing to loose money (or if paying cash get a very low cap rate)? Shouldn’t the rent control laws also limit the property value since the income the property can produce is restricted? That doesn’t seem to be happening at all. It feels like I may be missing something.
Any suggestions would be appreciated.
Regards,
-Jared