All Forum Posts by: Cory Carlson

I would save more capital before you dive too far into any of the stated markets. 

The BRRRR method in our market is really a capital/equity play. The reality is, when you're all done and in the refinance part, single family properties are underperforming at their current value and recent rise in rates. Round numbers scenario of buying a property for $250k, fixing it up, renting it out and its new higher current value has allowed you to pull your money invested back out. The problem is following a refinance at 75% LTV the debt service is likely to kill any opportunity for cashflow. The good part is you now own a property, the bad is it underperforms from a buy/hold perspective if you're using a realistic expense load. Many clients I have worked with were okay with this knowing this is how you get started building a portfolio and operating with this margins then to exchange out of the portfolio into a larger higher yielding property. If you're open to any market within a few hours of LO (Go lakers), consider Salem. The rental market is strong and I am finding a bit less competition then the Portland metro.

Should be interesting to see how lending adopts the recent house bill allowing the infill of ADU's and plex's on residentially zoned land. Keep us posted.

Strategy can largely depend on available capital. If you're looking for a 5+ unit building as a buy/hold or value-add build your team who has the experience underwriting, arranging financing and have them educate you. A good broker will be able to present you analysis outlining your cashflow, debt effects on yield and building upside/strategy. A good mortgage broker can help educate you on loan-to-value restrictions, how to calculate them and understanding of conditions/limitations of financing. 

Some investors want to learn a more hands-on approach and owner-occupy and get familiar with being a hands on investor. I have clients on all end of the spectrum and each have their pros & cons. Some with larger amounts of capital, find their time is worth focusing on their work and they can contract out management and fixes. Others may occupy, self manage, swing a hammer for their own fixes and thats how they get started. 

Strategy changes from those with $100k and those with $1m. 

There are exceptions within SB 608 that would allow units needing repair and are "inhabitable" that allow you to give notice. Since this is a triplex, you would not be liable for relocation fees unless you own other properties too. 

Copy & Paste off page 2 and 3 of Enrolled Senate Bill 608:

(C) The landlord has a qualifying reason for termination and gives notice as specified in subsections (5) to (7) of this section. (5) [Notwithstanding subsections (3)(c) and (4)(b) of this section,] The landlord may terminate a month-to-month tenancy under subsection (3)(c)(B) of this section at any time, or may terminate a fixed term tenancy upon the expiration of the fixed term under subsection (4)(c) of this section, by giving the tenant notice in writing not less than [30] 90 days prior to the date designated in the notice for the termination of the month-to-month tenancy or the specified ending date for the fixed term, whichever is later, if: [(a) The dwelling unit is purchased separately from any other dwelling unit;] [(b) The landlord has accepted an offer to purchase the dwelling unit from a person who intends in good faith to occupy the dwelling unit as the person’s primary residence; and] [(c) The landlord has provided the notice, and written evidence of the offer to purchase the dwelling unit, to the tenant not more than 120 days after accepting the offer to purchase.] (a) The landlord intends to demolish the dwelling unit or convert the dwelling unit to a use other than residential use within a reasonable time; (b) The landlord intends to undertake repairs or renovations to the dwelling unit within a reasonable time and: (A) The premises is unsafe or unfit for occupancy; or (B) The dwelling unit will be unsafe or unfit for occupancy during the repairs or renovations; (c) The landlord intends for the landlord or a member of the landlord’s immediate family to occupy the dwelling unit as a primary residence and the landlord does not own a comparable unit in the same building that is available for occupancy at the same time that the tenant receives notice to terminate the tenancy; or (d) The landlord has: Enrolled Senate Bill 608 (SB 608-INTRO) Page 2(A) Accepted an offer to purchase the dwelling unit separately from any other dwelling unit from a person who intends in good faith to occupy the dwelling unit as the person’s primary residence; and (B) Provided the notice and written evidence of the offer to purchase the dwelling unit, to the tenant not more than 120 days after accepting the offer to purchase. (6)(a) A landlord that terminates a tenancy under subsection (5) of this section shall: (A) Specify in the termination notice the reason for the termination and supporting facts; (B) State that the rental agreement will terminate upon a designated date not less than 90 days after delivery of the notice; and (C) At the time the landlord delivers the tenant the notice to terminate the tenancy, pay the tenant an amount equal to one month’s periodic rent. (b) The requirements of paragraph (a)(C) of this subsection do not apply to a landlord who has an ownership interest in four or fewer residential dwelling units.

Not an attorney or giving legal advice here. But familiarize yourself with this bill if you're going to invest in Oregon!

Single family homes that cashflow in Oregon, which is not a particularly landlord friendly state. Depending on how much capital you have to place, I would entertain a small-multifamily property or a syndication unless you're swinging a hammer at something yourself (and skilled) in a value-add. 

I think everyone hit the nail on the head here trying to help you tighten up your criteria. Reality is to hit ratio's with the rising interest rates your BEST bet is 70% LTV, (65% more likely) and if could force one to the closing table with a bank that would give you more leverage, your debt service is going to kill any cashflow if its properly underwritten. If your desire to go out of state into other markets, just get your team refined because dealing with value-add MF without a pulse on contractors, timelines and connections is a nightmare that just costs you.

 Hello, 

I specialize in multifamily and commercial acquisitions in Oregon. However with a $250k budget your options may be limited to find a property that cashflows. 

What you're describing sounds like a single family home with a detached ADU would fit your criteria. The detached "additional dwelling unit" (ADU) would allow you to subsidize your housing costs without a tenant sharing a wall. That is a somewhat limiting criteria though. I would not worry about the shared wall and keep your criteria more open. A duplex, triplex, etc or finished basement, detached ADU could all be on the table?

I helped clients successfully house hack all over the state. A big part of the strategy in our market is getting realistic and drawing the line between utility and investment. Not always do they align. The market is awaiting a decompression of Cap rates and its not a bad time to start lobbing low offers and testing seller motivations.