All Forum Posts by: Benjamin Ficker

Are you looking at multi-family or SFR? There's a much lower cost per door in the suburbs of Portland and a lot of opportunity to grow those rents and the core becomes more and more expensive. Most of our clients are looking outside of the core at the moment as most of the numbers are tough to make work.

@Mike Nuss  There's always opportunities!  I think the next 6 months are where we are going to see things settle out to the new normal.  We'll start seeing lower and lower comps when people learn to do the math on what they are buying and they'll quit overpaying.

The issue isn't the 7%+CPI.  The issue is removing no-cause "evictions."  After 1 year, you can not remove a tenant without cause (some exceptions).  The majority of multi-family properties have been sold on pro-forma numbers for the last 5 years.  Just about everyone I talk to is 4-5 years behind in rent.  If there is no upside with pro-forma numbers anymore, the value of those properties has to fall.  It erodes the equity of those who "love" their tenants and therefore kept rents low.

Thanks for the shout out @Derrick Aragon

You're answer is spot on.  The cap rate that someone buys it at (in this market) doesn't have much to do with the value, its what cap rate they can get it to in the next 6-12 months.

Most people are ready to buy if they see a way to get it to a 6 cap.

That's 11.6 GRM (Gross Rent Multiplier) which is decent in the area. Not an out of the ball park home run, but I'd tell my clients to grab it.

That being said, there's a lot of other info that would go in to the buying decision.

Interesting all the thoughts on how much notice you have to give from people in completely different markets... If the property is in Portland, you HAVE to give a 90 day notice no matter if it is a month to month, raising the rent, or whatever (except for an eviction for cause).

I'm also a broker in Portland, specializing in multi-family.  Not to sound harsh, but it is next to impossible to find anything that hits the numbers you described above.  

The play in Portland at the moment is long term growth through appreciation.  Through the NEXT cycle.  Things will shift in Portland soon enough (Trevor is spot on above), so if you are buying now, you need to be planning for a dip in values and then wait for them to rise again.

Hey Ben,

Ben here.  I'm a multi-family broker in Portland.  Just bought a live-in duplex for myself.  Super familiar with the market right now.

Forget the rules of thumb, they don't apply here.  I tell anyone looking to buy in Portland needs to be thinking through the next cycle.  Obviously this market will turn at some point (there are some softening indicators already), but nobody thinks it will look anything like 2008-2012.

When we bought our live-in duplex, we just wanted it to break even if we had to rent it out. The fact is with a live-in duplex, your down payment is so low that you have PMI. If you put enough down to avoid that, then you should have no problem having those pencil out. Even on the $600-$800k duplexes on the market. There are rents to support it.

Give me a call if you have any questions (I promise not to try and poach you from your broker).

I'm a multi-family broker in Portland.  People buy here at a 5 cap (or less) because our rents are going through the roof (still).  It is definitely a long term play as many see this as the San Franciso-ization of Portland. Often you are buying in at 4-5cap, but once you bring the property condition up and can get market rents, you'd be sitting at a 6 cap or higher.

Look in Vancouver.  In the last week I put a cash flowing 4plex under contract, and made contact with a triplex owner that will cash flow once the rents get bumped (not even to market levels).  On the triplex, I'm either going to sell it (as an agent) or buy it myself wrapping their loan. Both of these came off of 150 letters that I sent to multi-family owners in Clark county.