All Forum Posts by: Benjamin Ficker

Ha, literally just saw the price drop come through the mls after I typed this.  You do have a good looking property there.  The hardest thing for my buyers (we drove by) is that they are all 1 bedrooms which obviously have a lower ceiling than 2 bedrooms for rent.  Also, we happened to drive by when school was letting out, which turned them off.  Obviously nothing you can do about that.

I sell a lot of small multi-family properties in Portland, having it rented shouldn't be a problem at all, especially if you have solid rents close to market levels.  It makes it easier to show what it can rent for (obviously) than if you haven't raised the rents in 7 years (which happens).  As far as the purchasing of it goes, if it is being financed than the appraiser should give a number for market rent as well as current rents,  The borrowers should be able to use some of the market rent amounts towards the financing of the property.  That being said, there is a great chance that it will sell for cash if it is in a great neighborhood.  I may have the buyer for it if you have any more details.

If you do list it, I always tell clients to be upfront with your tenants.  Making up a convoluted story about all of the people coming by is worse than giving them more time to mentally prepare.  I get the tenants a $10 Starbucks card and tell them to go waste an afternoon while you have everyone come through to avoid the "subject to interior inspection" stuff (though it doesn't have to be a huge deal if it is subject to interior).

I'm a multi-family broker in Portland, so this will sound a bit biased...  I say focus on multi-family.  There is nothing indicating a slow down of people moving to Portland.  And since nothing is being built in their price range to buy, they are willing to pay a lot more for their rent.  The only issue I see is with how much money you have to invest.

$100k won't get you a 4plex in (or tri-plex for that matter, in fact we just sold a duplex for $690k) unless you are buying it owner occupied. 5 or more units will put you in to a commercial loan situation (which isn't bad, just different) and you'll be in the $600k range minimum. You won't be able to hit your DCR if you only had $100 down, which you'd need at least $150k for the down payment. This numbers are for the areas that I think have the greatest opportunity to appreciate. You can go to other areas just outside the core of PDX and get more property for your buck, but you will not see the same type of appreciation.

Also, remember that the value of multi-family is primarily based on the income that it produces versus the expenses to get there.  So even if the "market" appreciation remains flat, but you can cut expenses (billing back for utilities instead of paying them your self) and move rents up slightly, you can add a lot of value to your property.  Forced appreciation.

With SFR, you will always have more buyers if you are planning to sell it in a shorter time farme, but the downside is that all of your income is tied to one tenant. If they leave you high and dry, or worse just decide to stop paying and drag you through the courts, it can be months of you covering all of the costs. This just happened to a friend of mine. With a multi-family, you will have those other tenants covering their portion so the risk is spread out.

Client had a federal manufacturing charge and serve time in early 90’s which is keeping him from getting regular financing. Now owns a rather successful chain of pawn shops.

Client owns these two properties:

River Forest: $600-$800k equity (Owes $400k)

Oak Shore: At least $1 mil equity (Owes $175k, worth minimum 1.3mil up to 2.3 mil, I haven’t looked at the property, it was a distressed purchase)

Looking for $800k hard money to close on a 43 unit apartment complex. Was under contract for $2.09 mil, he has the 25% down, the $800k additional gets him traditional lending through a small local lender but he would be willing to finance the apartment deal through some private/hard money if it made more sense.

My thoughts are to lien one or both of the properties, when spring hits he will sell off River Forest to repay partial. Not sure of terms on the rest.

Thoughts on who I could take this to?

I got started in real estate at 21 with the same intention, investor focused real estate.  11 years later, I am going back to building that niche.  I got distracted with the other business, but you'll find that though there is money there you will get burned out if it isn't what you love.  You can focus on investors and do other deals on the side.  I would spend my time and money on what you are passionate about.

Hey,

I tried emailing you but it bounced back.  Can You shoot me the details?
[email protected]

I have a lunch in SE from noon to one, so anything ending by 11:30, or starting after 1:30 works for me. Thanks

@Corey Davis knows me well. I'd love to join you guys

The unpaid principal balance and the total amount owed are different. If someone owes $100k, but unpaid interest and charges put the total payoff to $150k, you need to do a short sale in order to get it at the $100k price. A short sale where the bank is receiving the unpaid principal balance, but is shorting the fees and interest, is much easier to close than one where the principal amount is also shorted. The deal may make sense at $100k, but not at $150k.

@Corey Davis

I'm in. Let me know if you want to grab some coffee.