All Forum Posts by: Uwe G.

@Julee Felsman,  Thanks for sharing!  I love that part of town and that will be a solid investment over the longterm.  Vancouver, WA is a true gem given the proximity to Portland, the Airport, no income taxes, access to good healthcare, and a booming downtown/waterfront of its own.  Look very much forward to see how the city further develops.  My guess is within 10 years it will be just as or more expensive then Portland.

Hi @Feroz Mohummed, I agree with all the comments so far and would echo the thoughts about Vancouver, WA.  I find it the most compelling area to invest in for single families in the entire Portland Metro area.  Is it a good time to invest?  I would say on the macro level that answer would be no because most houses you would look at on the RMLS would not be good investments at the current prices.  But, if you network and are able to find a good agent and put in the time there are still good properties to find as investments even on the RMLS (other methods that get you off market listings might be a good approach as well).  And if you choose other parts of the Portland Metro area I still think they are good investments if you are picking the west coast.  The quality of life is superb with an incredible amount of natural wonders (that can't be manufactured in other areas) within a hours drive.  Wherever you choose pick a premium location with easy freeway access, good schools, good healthcare options nearby and closer to PDX airport (less then 30 minutes).

Hi @Laura Williams,

Lot's of good feedback on this board.  I am more in the camp of holding onto assets vs. selling them but that depends on a couple of factors.  My first question would be how cheap is your debt?  What interest rate are you locked in at?  If you are locked in below 4% I would keep the properties and utilize the losses against your large income (cheap fixed debt is worth a lot).  My second question would echo some of the other folks, if you can sell the most recent house that was a primary and qualify for tax free gains I would do this if the gains are large (i.e. net 100K or more).  Finally, are the specific locations of these houses in premium locations?  If so I would keep them if not, I would think about selling.

@Mateusz Maciejewski, Welcome to the BP community and it is great that you are looking into RE investment to pursue longterm financial independence.  Like others that have commented, it is tough to find deals but I agree house hacking is going to open your options.  I think houses are actually trading at better valuations then multi family and it is easier to find a single family in a premium location whereas most small multi family are in less desirable areas overall.  If you are not opposed to renting rooms out to friends I feel that might be a safer route to go at this time in the market.  Just a suggestion to open up more options if you can't find that multi-family.  My other piece of advice would be don't get too far off I205 or I5.  Real Estate that makes commuting easier will typically outperform  (rents and value) over the longer term.  I used to live in the Oak Grove area of Milwaukie and really like it.  I thought the location was premium for the longterm as you can easily commute to downtown Portland.

@John Reardon Don't invest in things that do not cash flow.  Although some people are able to find deals it is also important to look at the overall trends.  Go to www.BarryApartmentReport.com and go to reports.  If you click on the 2019 - CCIM Apartment Presentation (January) report and go to slide 65 it will show you where the majority of cities are in respects the investment cycle.  I think the stock market is difficult to time but the Real Estate cycle is much easier to time because it moves so much slower.  When there is no spread between what you can borrow money (via commercial loan) and the cap rate then I feel the market is nearing over-valuation.  Also, although rates have dipped since October the Fed will raise in the second half of 2019.  Longterm I agree with the people above that real estate is solid overtime and is one of the best asset classes to own.  

@Carter Thomas I am local investor as well and work within property management of single family rentals in Southwest Washington.  My advice would be tread carefully as real estate is priced pretty high everywhere and OOS of investing is hard if you don't have boots on the ground.  Given that, many people do it successfully and can do it in this slightly overvalued market.  Go to markets with good fundamentals.  Population is climbing, plenty of jobs, access to good airport, and access to good healthcare.  If you want to stay closer to the west coast you might look into AZ or NV.  I would like to eventually start building up a portfolio in AZ myself.

@Phil Sharp it obviously depends, but if you invest for cashflow and focus on areas where rents will rise over the longterm due to job and population growth you will find out that the appreciation will follow.  Also, if you want to continue and expand the process by using loans such as mortgages, the banks will support this method.  If you go for appreciation that lacks cash flow you will run out of capital quickly and have a hard time getting additional loans to buy more.

@Collin Savunen, You bring up a very interesting topic.  I feel the simple answer to crashes is that they happen when people/entities start defaulting on their debt.  The 2008 crisis was based on single family home loans that defaulted and caused a large tailspin.  The same thing is brewing right now but it has nothing to do with single family homes and the main stream consumer.  I feel that real estate with the exception of apartments and real estate tied to corporate debt are the main issues.  Unlike many folks on this board that feel apartments are safe investments right now, I feel the exact opposite.  There has been so much apartment contruction over the last 10 years I feel that we are sitting on a glut of vacancy to come.  And the proforma's of those apartments will not be met.  With rising refinancing costs I think it might end badly for many projects.  The good news is this will only benefit mainstreet this time around with rents going lower.  For those that are not over leveraging they will weather the storm and be able to pick up more apartments when others run into trouble.

Regarding the macro economy the same thing is happening with corporate debt.  When the debt comes do and it is time to roll it over; those companies (that are over leveraged) are going to run into a lot of trouble.  When/If we see debt not be repaid is when the market crashes.  Till then assets may reprice, correct, and even enter bear markets but the crash won't happen till debt defaults.

@Jack B. As @Jay Hinrichs suggests the schools in Vancouver, WA are pretty good.  Vancouver is a suburb of Portland and carving off on its own as a destination to socialize, eat, drink, and be merry.  Although I don't feel the property taxes are that high they continue to rise.  In areas like Ridgfield and Camas you can see what the money is doing as they have incredible schools, great sense of community and pride.

The big question to ask besides taxes assuming your options don't vary to much would be lifestyle.  The lifestyle between Las Vegas, PNW, and Alaska is vastly different.  So taxes are extremely important to keep in mind but there are a lot of other factors that play into mental happiness and how much money you keep in your wallet.

@Chauncey Perkins, I like rentals as well.  My rules are pretty rigid because I am still slowly building up some rentals.  I go for location first and then make sure the numbers work (ideally a 1%+ spread between the fixed mortgage rate and the cap rate).  It makes sure I get both cash flow and long term appreciation.  The appreciation is nice for using later to open up HELOCs.  The other thing I am finding useful is picking up properties that have less competition as rentals.  In my area there are a ton of 3 bedroom rentals but very few 4 bedroom rentals.  So I do favor 4 bedroom rentals as we see an influx of families moving to the area in need of 4 bedrooms.  Also, with the apartment boom going nuts in my area which will cause some pain over the next 3 years as all the units come online, I feel a 4 bedroom doesn't compete with an apartment as much.  So try and find something a little unique that can give you an edge if you are starting.  I try to get one property every year or two but am running numbers on a daily/weekly basis evaluating deals.