All Forum Posts by: Amanda Coleman

@Mike Nuss, Thanks so much for your reply and confirming our belief and instincts after doing some looking around the city's website. I'm just never sure about what applies to our situation after reading the city rules and regs, partially because I probably don't want them to apply to me and because I feel like we're just small potatoes and the rules are meant to apply to the big fishes. And I get it, I don't want to live in a neighborhood that's full of Air BnBs but I certainly like staying in them in other places. I guess the moral of the story is even small potatoes come in 5lb bags.

The house is indeed in a residential neighborhood (really close to OHSU) and we'll likely sell it in a year or so, so changing the occupancy or use is not an option. I think we will just try to rent it the more traditional route as a yearly or monthly lease. Thanks for the info! 

Hey BPers, 

Any local Portland Air BnB wizards on here? Trying to navigate the regulatory waters and see what hoops we would have to jump through to list a 4Bdrm house as an Air BnB and am finding some conflicting/confusing information. Is it even allowed to rent a house that you don't live in as a short term rental? What is the permit process like? Fees? What about taxes? Other regulatory expenses we should be aware of? How long does the permit process take? Anyone have a good run down on what's involved to do it above board? Risks for not getting it permitted? Also looking for a good reliable cleaner that could come on demand to turn the place over if we were unable to. TIA

@Jay Hinrichs Do you know if the law actually says that you need a license to do flips if you're doing more than 3 per year or is just that you're not likely to get caught if you are doing less than 3? 

Welcome @Joseph Brown Congrats on your first investment. Mind sharing where your turnkey property is located and what company you used? Would be curious to hear how it goes over time. Are you actually getting the cash flow that the turnkey company says you will get, how is your property manager, do you feel like the TK provider found you a deal that you wouldn't have been able to find? Thanks. 

Some great information on this thread and of course everyone has different advice. I tend to lean towards @Mike Nuss line of thought because he's right, I'm not yet an investor. We got lucky in the purchase of our house and the appreciation we've seen, though we did buy the house with the intent of putting in an ADU. We are now working on taking that luck and turning it into an investment, however not yet knowing all the ropes and having little experience in investing I feel much more comfortable investing here in Portland in assets that I can see and understand. I have no doubt that someone like @Jay Hinrichs can take a lump sum and invest it and crush it on the returns and probably  beat the cash flow + appreciation we would get on our current house but I'm not Jay. And couldn't you take out the equity in your house and make that investment anyway without losing the asset? Isn't that the point of leveraging? If you sell the asset you get a lump sum and save $50k in taxes but if you keep the asset and leverage it you still get to use the equity to make another investment while still reaping the benefit of cash flow + appreciation + debt paydown (your renters are paying down the mortgage. Cash flow is always seen as the golden ticket but debt paydown for long term wealth seems to be just as important) Good discussion everyone. 

Also, full disclosure, I'm no expert but my husband and I are in a pretty similar situation so I've thought a lot about it and have done some research. We're in SE Portland (Woodstock/Brentwood-Darlington, so not quite as nice as South Tabor but up and coming) and owe $250k on a house and neighborhood that has seen crazy appreciation. We believe our house could sell for somewhere around $400-$425k. When we saw how much our house had appreciated our first thought was maybe we should sell. The problem with that is that then we would have to buy another house in this crazy market, which you don't seem to have that issue which is nice, but it sounds like you would be looking to buy another property at least. We also have a full unfinished basement that for $60-$70k could be converted to an ADU and rented for $900/month. City of Portland is really encouraging people to build ADUs because it's an easy way to increase housing availability/density and maintain neighborhood character. So for the next 2 years (at least, they have extended this waiver a couple times) the city is waiving system development charges for ADUs. This saves somewhere between $8k and $12k in city fees. We are currently in the process of taking out a home equity line of credit which we are going to use to invest as essentially a silent partner in flipping some houses. The profit we make from flipping houses we will invest in building out our ADU. Once that is complete we may look to move to a bigger house and turn our current house into a full rental, renting out the house for around $2k and the ADU for $900-$1k which should cash flow $400-$500/month for us and continue to see decent appreciation.

I understand the concern about a bubble but from what I've read the population dynamics alone don't seem to support the idea of a bubble here, but who knows. An experienced investor told me the market stabilizes at 6 months of housing inventory and right now we're at 1.5 months. Good Luck, I'm always up for talking ADUs so if you ever want to meet up for coffee let me know.  

If it were me I would convert the huge garage into an ADU and rent the main house and ADU. You could probably get $700-$1000/month for the ADU plus the the $2k for the main house. South Tabor will no doubt appreciate much much more in the next 5-10 years and the tenants you will get will be top notch in that area. If you sold for $400k, minus the $230k you owe, minus closing costs you would have roughly $140k to invest in another property (If you didn't do a 1031 exchange then you would have to pay 25%- 40% taxes on that as well, but let's say you did). It's really difficult to find cash flowing properties here in the Portland Metro area. You can also leverage this property to make other investments. I don't think anyone could pay me enough to get rid of that property if I were you.

The only way I would sell would be if you were comfortable investing out of state. In other markets you can probably do quite well with $140k but it's also a lot riskier if you are unfamiliar with the market and generally you won't see nearly as much appreciation. 

@Jay Hinrichs @Melissa Dorman Portland State is SW Portland. University of Portland is in North Portland. Getting from Vancouver WA to PSU would be a nightmare in traffic in my opinion, you have to cross 2 bridges and anytime you have to cross a bridge in this town it's pretty bad. 

For access to PSU in that price range I would look in Milwaukie, with the orange MAX line there now it would be easy to get to PSU. Hillsoboro, Beaverton, Aloha, and Tigard would also be options for access to PSU, though coming into town on 26 can be pretty bad as well when you are trying to get through the tunnel.  Generally for East Portland anything west of 82nd street is considered "close-in" these days and will be a "good" place to be though there are some good pockets east of that as well but it becomes a little more spotty. I'm in SE Portland in the Brentwood-Darlington neighborhood and there are parts of the neighborhood that are still affordable, though changing quickly. 

@Account Closed For what it's worth when we bought our house there was a decommissioned cesspool on the property, I had never even heard of a cesspool for house sewage before but am fairly familiar with septic but our realtor assured us is was pretty much a non-issue and that lots of homes in the area had them. I guess there is potential for them to cave in but we haven't had any trouble with it and I haven't heard of it as a big issue. Long-story short, the cesspool was not an issue for us as buyers. However, I think it is costly to get a house hooked up to city sewer, which I'm sure you're already aware of. 

I can't speak to the industrial zoning but I know there was a pot grower wanting to lease some land out by the airport, I'll see if I can't get some info on what they were looking for in terms of size of space etc. 

Glad I read this thread, I like your insight @Account Closed And was thinking along similar lines while reading so much on here about rent to price ratios and  investment in low purchase price areas. I'm also suspicious of people's cash flow numbers as many don't seem to incorporate cap ex expenses, monthly maintenance costs and opportunity costs or increased mortgage payments if using home equity loans/lines of credit. Thanks for the great discussion everyone!