All Forum Posts by: Chris Shepard

@Jeff S.

Hi Jeff, I have a friend who is selling his place in Rockaway. His VRBO has done quite well during Covid and I expect that trend to continue.

I have a beach house in Seaside and we’ve had our best year ever. I highly recommend buying something desirable and doing a vacation rental if you go that route. Previously during years that had fewer vacation rentals we would rent it out long term during the winter.

Cheers,

@Steve Morris

Actually Steve, I did that exact thing that you mentioned about 5 years ago. I filed a complaint against him with the REA. I too thought what he was doing wasn’t legal and wasn’t fair since I had worked hard to get my real estate license.

In the end though, the case was dismissed after he explained which laws he was operating under and I was proven wrong. I also felt quite a bit of remorse for what I did after the fact and Scott eventually forgave me for what I did.

In the end I agree with you there are some people who take advantage of other people, but wholesaling is about providing a service to home owners who need to sell a very illiquid asset very quickly. There’s only a small segment of property owners who this serves. In particular with Scott he tells them if they use a real estate agent they will likely get more money out of the deal, but he highlights what services he can provide and why his way is easier.

Cheers,

Chris

@Nitish Paliwal

Hi Nitish,

I am in contract to buy a house that will cash flow in pdx.

It’s a 2/1 for $258k.

11615 SW 64th Ave 97219

It should rent for $1495/m

PITI is $1248.63

PM is $120

Maintenance*** - $42

Vacancy** - $75

Cash flow = ~$10

Principal pay down = ~$400 per month

Rent Appreciation ~5% per year or $75/m

Market Appreciation 3% per year ~$8000/y or $659/m

Honestly, if you have a close deal, pull the trigger because all of the benefits if you hold the property 10+ years outweigh the small loss of cash flow over the first couple years. I agree with the others to keep away from condos and HOAs though, getting caught in litigation or a big assessment is a deal killer

***The house is newly remodeled so I’m going to say maintenance will be less than $500/year.

**Vacancy on average in our portfolio is less than 3%, but I will underwrite to 5%

@Steve Morris

Hey Steve,

Wholesaling is definitely legal although the OREA has tried to challenge it in the past.

When you enter into contract you are allowed to transfer/sell that contract for consideration. It doesn’t matter what the contract is for, whether it’s a trailer or a duplex.

I have purchased multiple properties from wholesalers and they have all been great deals.

@dominic york

A couple months ago we had a very successful wholesaler, Scott Dalinger, do a presentation on his methods. It was extremely informative. I’d be happy to connect you with him.

As well, our brokerage has a lot of resources and training opportunities for newer investors, wholesalers, and brokers.

Mark Passannante and Charles Kovas are also great resources.  I have used both of them for both serving notices and litigation and they are very reasonable. 

@Tris Wils

Hey Tris, my brother and I have successfully BRRRed about 35 houses and 10 apartments in Portland. 

Our first house we bought in 2009 for $125,000 added a master bathroom, remodeled kitchen, and installed new floors, for roughly $25,000.  It appraised for $225,000 and we pulled cash out and moved on to the next property.

In 2017 I purchased the home that I am living in now for $310,000 and invested $180,000 into it.  We recently put it on the market and got it into contract at $550,000.  What is great is that we qualify for taxfree gains through section 121.  This project was a big value add and was fairly complicated.  It would have been better to do a more straightforward value add project.

In 2018 I purchased a 4 plex in Milwaukie for $540,000 and invested $50,000 into it. I took rents from $800 to $1195. The mortgage is $2800 per month and rents are about $4800. I did do a 1031 exchange into this property so I am not super upset that I have roughly $150,000 of capital into the property.

Today we are purchasing a condo right now in SW Portland for $175,000 and I think that we are just going to relist it at a higher price without doing any repairs... I think the wholesaler is going to make more money than we are, but it should provide us a small return.

We are about to close on our 2nd Syndication deal for a 12 unit apartment complex in SW Portland as well. We got about 10 investors together to buy a 1.8m property and we have a small value add project lined up for it and we will be waiting for the SW Corridor MAX Line to be constructed and then we will sell.

In the current market landscape, we are focusing more on Apartments than we are on single-family homes.  Home prices are incredibly inflated due to the lack of inventory.  Flips and BRRRs are possible but as investors, we are extremely selective. 

I'm happy to chat about the local market here... that's what we do every day!

Cheers,

Chris Shepard

Uptown Properties LLC

• What are the origination fees?
• Does the lender provide full transparency? Are there any hidden fees?
• Will the lender cover rehab costs?
• How much of the LTV will the lender allow you to borrow?
• Is there a dedicated account manager to help you through the process?
• What’s the turnaround time?
• Do you clearly understand the terms of the loan?

As a property owner who owns about 30 units in Portland, I think this is great.  Although I agree with @Steve Morris about how the process can be slowed down massively by neighbors... or anyone really.  But as with anything that comes to being a long term real estate investor time will work in our favor, neighbors will come and go and the “new rules” will become the status quo. 

I do think there is a huge opportunity to add ADU type units to properties with land and that is a much easier process.

1. When your friend co-signs the loan, he/she's basically taking the loan on as it was his/her own and it will go on their credit report, and the lender will come after them if you default/don't pay. Co-signing a loan doesn't remove your friend's rights, though, and they can still very much sue you, as the borrower, for any legitimate cause of action.

2. The best option to get their name off the cosigned loan is to have the loan refinanced, make sure to take your friend's name off the new loan.
Some loans also have a program that will release a cosigner's obligation after a certain number of consecutive timely/on-time payments have been made. Not all finance companies support this but some do, you may inquire if they have co-signer release.

3. Not really, I think that's the best way to do it—to get your friend's name off your loan the soonest possible. It will relieve them of the financial burden/not having to stress about their credit score, and it will definitely preserve your relationship with that person. 

With accomplishing this though, the only concerns may be: whether you being able to improve your credit score within that period of time that you are able to refinance, and/or being able to demonstrate that you can handle the loan on your own so that the friend can get a cosigner release from the Finance company.

You can reach out to your lender and apply for forbearance. 

As well there are EIDL loans that are available you can sign up for through the SBA.  

If you feel like you need act now, you could offer the tenants cash to move out and forgive their past due balances if you think you’d be better off writing it off and getting new tenants. 

Cheers,