Finding investments in Eugene, OR - NEED ADVICE

[Heather S.]

Hi everyone, I'm in the beginning stages of looking for an owner-occupied multi in Eugene, Oregon. I'm in Medford currently but will be moving up to Eugene in June or July. My initial plan was to use an FHA loan to buy a multi, live in it for a year, move out and repeat with the VA loan.

I made my own spreadsheet to analyze deals which includes cashflow, cap rate, CCR and DSCR. I've been feeding Eugene multis through it for months now and the numbers are just abysmal. They get a little better if I hypothetically enter 20% down, but they're still bad and I know I don't have that much to put down.

I know it's a rule of thumb, but finding something that even marginally fits the 50% rule is like spotting an albino unicorn. It's just NOT gonna happen. The same crap multis have been sitting on the MLS for months and the somewhat promising ones are snatched up within days.

So I'm looking for someone that has experience in the Eugene market to give me some advice. As a new investor with access to only FHA and VA loans, should I be looking at SFRs instead of multis? Are the general formulas touted on BP (1%, 2%, 50%) even useful in this market (I'm assuming no)? If not, what kinds of numbers work well here? Where is the market going? Should I even invest in Eugene?? Yell your thoughts at me!

Oh and thanks for reading :) Cheers

[Larry Fried]

I live in Eugene and invest elsewhere because the market here is not one that lends itself to cash flow rentals even when doing 20-25% down. That said I think Eugene will do well in appreciation given that we are the second largest (and most desirable) city in a state with highest influx of population. Portland is already going through the roof in prices (bypassing the 2007 peak), and Eugene has been experiencing much more moderate appreciation, and still has a lot of potential. Another way to potentially house hack is to buy a SFR with your FHA and VA loans, and then rent out extra bedrooms (lots of students here if you buy close to the UO) - but only if this is a lifestyle that you can live with. You can add value (ie: do improvements) while you live in the property and then potentially sell at a profit in a few years and potentially buy another property.