All Forum Posts by: Adam Zagorsky

I have been using Rentometer.com for evaluating rent values when looking at properties in different areas. This doesn't give information on a rent per room basis but could be good perspective on it. Does anyone have any experience or thoughts on the accuracy of using rentometer.com? i.e. Their estimates matching up well with reality

We have had to do that in the past in Bend, OR. We were tenants and we payed for it but the landlord reimbursed us. 

I would agree with @Mathew Wray considering it infrastructure for the home. 

I had no idea about the Superfund site you mentioned. Looking into it I found this super interesting map of the different sites and their priority along the river.  

https://www.oregon.gov/deq/FilterDocs/PortlandHarborMap.pdf

-Adam 

@Mathew Wray I think paying attention to the back end like you mentioned is going to be very important. I find myself thinking "Oh, yeah add value then refinance to pull money out for the next deal" without taking into account the increased monthly payment and with numbers being so tight I likely wouldn't be cash flowing with that higher loan amount. 

I have talked to a lender through a local credit union in the past but my financial situation has changed and need to restart that conversation. Do you have any recommendations? 

We are in the neighborhoods near Linnton outside the industrial area but still great to think about. I see those stand alone homes smashed between industrial parks right on 30 and wonder what it might be like to there - can't imagine it's great. 

@Mathew Wray you nailed the summary. 

 We are across the bridge from St. Johns. So, Technically NW but more like St. John's on the east slope of forest park. 

A big concern of mine is making sure I have a good exit strategy or a way into the second deal or property. This situation seems like I'll end up in a position where it will be hard to qualify for another loan unless I can really increase equity somehow or wait the 2 years to show rental income on my taxes. It does have the nice upside of the downstairs unit paying a large portion of the mortgage but just don't want to be stuck. 

I started a little spreadsheet to better capture all of the numbers and compare things. It's a work in progress but it is definitely helping me understand the whole picture better. Some holes in it so far are the capex estimation and fixed insurance cost - I need to dig into better estimating those costs. Also, cash on cash return might be a better metric than cap rate to look.  

@Dan H. Thanks for the reply. It's by no means a bullet proof analysis.

Numbers for the ADU are very rough, based off of simple google search and wouldn't likely be a stand alone structure. There is a detached garage with a small office/yoga/workout space below (since it's built on a hill) that could be expanded. I am just trying to get a sense of the overall picture and see what others think.

I'm not sure where you are seeing the $750 cash flow number. Maybe the way I broke things down wasn't very clear. Without adding an ADU, not accounting for capex, maintenance or vacancy it does not cash flow- Just means we would own the place rather than rent for about the same cost each month. If we did add some additional structure to move into and landed on a favorable sale price it could mean we live rent free or for very little (not accounting for how you'd finance the cost of building the ADU).

I don't really have anyone to bounce ideas off of so I am using this forum to lean into for advice on the topic.

I am looking to get some advice or guidance on my entrance into the real estate world. I have been doing a lot of research, learning and listening to learn about real estate investing in the past few years and it seems to me that your first property can really influence how quickly or slowly you could scale your business. My goal is to house hack and work towards owning cash flowing properties.

Fortunately, I am a very handy person and would be able to do a lot of work myself to add value to whatever property I start with. I grew up remodeling homes with family and remodeled a house myself in the past.

Currently I am working towards improving my personal finance position in preparation for buying my first property i.e. paying off debt and minimizing monthly expenses and lifestyle spending.

I currently live in Portland, OR which is an expensive market and isn't easy to find cash flowing properties. From what I have seen the tactic here would be finding value add opportunities like rehabs, adding a bedroom or ADU etc. to help build equity/increase monthly rent potential.

My partner and I live in NW Portland and pay $3200/mo. for rent but rent out a downstairs studio space for $1600/mo. so we each pay $800/mo. plus utilities. In terms of my living expenses rent is my largest expense. The property owner potentially wants to sell the home and depending on where you look the estimated home value is between 480K and 550K. The home is on 0.6 acres on a steep hill so it has the potential for building an ADU separate from the house but the site work would be more difficult on the hill. As it sits buying the house seems like a good move as it would decrease our monthly living expense despite it being a very expensive first home (part of why I’m asking for guidance) and also has some value add potential.

The Numbers:

Mortgage: $2450-$2787 (based on 480K-550K range@ 4.5%)

Taxes and Insurance: $700-$800/mo. ($1500/yr. ins. & 1.04% property tax/yr.)

Total: $3150-$3587/mo.

Downstairs rent: $1600

Our total: $1550-$1987 + Utilities or $750-$993/mo. split (currently $800 + utilities)

Would that $1600 coming in every month eventually count as rental income to help qualify for the next property?

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Now for the value add part

Build an ADU for $40,000-$90,000 (Property allows for a number of ways to build something).

Or on the simpler end of the spectrum build a deck with a Yurt for $5,000-$10,000 to move into.

Rent out the upstairs and downstairs ($3587-$3400= $187 remaining or $3150-$3400= $250 cashflow)

Or there are definitely ways to add value to this house through bathroom remodel or adding some square footage to accommodate an additional bedroom.

Seems like the sale price of the home really will drive whether the opportunity makes sense or not.

Now that I am putting all of this on paper it is becoming clear that no matter what, this property is on the edge of making sense if not making no sense at all.

Anyone have input or ideas on this scenario? Anyone have any thoughts or recommendations on the best way to begin my journey in an expensive market? Your input is greatly appreciated!

Congratulations, I am excited to see your numbers and details in the future!