All Forum Posts by: James Ayers

Nice work on this one Brian, this is almost exactly what I'm looking to do right now.  I'm just starting to talk to Brokers in the Portland area, but so far I haven't had too many solid leads like this.  

A few high level questions on this deal:

What was the occupancy when you obtained the property?

Did all of the units require updating?  

What updates and how much did you spend per unit?

During the renovation, did the property cash flow negatively?  

If you're interested in an equity partner who wants to contribute more that just money (and hopefully learn a little something along the way) please reach out. I'm mostly interested in investing throughout the Willamette Valley and SW Washington. 

Hi Cozy users.  I've been looking into Cozy recently to think about using them to collect rent and manage work orders.  One thing that I'm not quite sure of is how they are making money.  It seems that the rent payment service is free and their tenant screening prices are similar to other services (no big mark-up).  

Does anyone understand their business model and how they are generating the majority of their income?

Thanks,

James

Hi Janel,

Congratulations on not only making what sounds like a good investment, but on also moving out of your comfort zone a little bit to try something new.  My wife and I live in Portland we we're interested in investing in the Willamette Valley (with our main focus being Salem / Keizer area).  So far we have one duplex in Keizer and we're currently looking to get another multi-family property sometime soon.

I've also thought that a storage unit would be a good investment, but I feel somewhat uneasy about the idea of having employees and a payroll.  Can you elaborate on how you made the transition from being the operator of the relatively "self-run" business of multi family to being the operator of a business with business hours / payroll / etc?  Also, was the financing for this deal the same as what you would have with a multi family deal greater than 4 units?  I don't think I'm ready to go this route yet, but it never hurts to get some extra information...

Thanks for sharing your experience,
James

My two cents.  If you want to become a real estate investor, don't go with option 1.  I say this because you'll be left with little cash on hand and a growing family which will make it hard to save in the future.

I also don't like option 3 much because it's really just similar to option 1, but the additional equity you gain from the remodel will not equal the actual amount you spent on the remodel.  But at least the wife and kids are happy.

This leaves us with option 2.  Initially I liked option two, but your phrasing make it sound like you'd purchase your investment property with a combination bank loan / home equity loan from your current place.  I happen to believe that we are in a bit of a bubble here in Portland (I'm in the Bethany area near you) and it that is true and it pops you have to potential to be underwater (or barely treading water) on multiple properties.  That also doesn't sound good to me.

So my "lame" final answer is option 4: Keep the equity in your home and use savings to buy an investment property. If you don't have savings you could try going the hard money / BRRR route and use the profits to eventually buy another property or fund options 1 or 3 in the future.

I was in your same situation 6 months ago and I have to say I couldn't agree more with @Jay Hinrichs.  We ended up buying a duplex in Keizer and so far it is doing quite well.  Cash flow in excess of $200 per door and on track for a return in the neighborhood of ~10%.  I've also seen some good potential in South and West Salem, but similarly to the Portland-metro, prices are on their way up there too.

@Rod Hanks @Mags S. @Account Closed @John Thedford

Thanks all for your valuable advice.  Reading back over my post I realize how bad it sounds especially toward section 8 tenants.  Really, I don't care if they are section 8 or not.  All that matters to me is that they treat my property and neighbors with respect.  Alas, I really appreciate you pointing out my error in wording as I need to start being a bit more careful how I choose my words (I've never had a "legal" type job before).  The last thing I want to do is get in legal trouble or even make someone feel discriminated against due to their economic status since this is not in line with my beliefs or values.

I'll be sure to read up on my local state landlord-tenant and section 8 statutes to make sure I'm well within the law at all times.  Thanks again.

We're very excited!  Today my wife and I just signed the papers to take ownership of our very first investment property; a duplex in Keizer Oregon (a suburb of Salem).  Thanks to this wonderful community and all you wonderful people over the past few months my wife and I have gained the confidence to pull the trigger on this exciting adventure.  Now that we're here we get to start the fun with our inherited tenants.  

From what we've gathered our tenants seem very similar to the angel and devil on the shoulders of the cartoon characters we used to love watching when we were kids.  The "angel" tenant is a single dad who is a handy man and seems like a great guy who keeps his property clean and in good shape.  On the other side the "devils" are section 8 tenants who don't keep their property clean or in good repair (holes in the wall / broken doors / damaged cabinets / etc.) and seem to be the black sheep of the neighborhood.  The two neighbors that we've met have both complained about them, saying they smoke marijuana in the garage and are generally "rowdy" (kids throwing rocks at cars, garage seems to be some sort of default "hangout") in an otherwise nice family neighborhood.  

So finally my question:  We want to get rid of the tenants when their lease expires at the end of January, but we're not sure how to do this.  Can we just jack their rents up much higher than the other tenant's rent, despite the property being in poorer condition?  Can we just tell them we don't want to renew and they need to move out at the end of their lease without giving them a reason?  We would love some advice from those who have dealt with a similar situation in the past.

Hey @Ben Winchester, welcome to BP and to REI investing in general. I'm also a beginner form the opposite side of town (Beaverton area). I'm not sure how useful it is, but this site has some interactive charts you can play with to see how Portland ranks among other markets (and the US on average) in a few key metrics. It won't give you detailed info on our market, but it least it's fun to click around and think about trends.

http://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-20

Thanks @Vanessa Peterson.  It's good to hear people are still finding good deals.  I'm now seeing some decent stuff north and south of town, but they won't enjoy the appreciation that you will see with your new property.  I'll keep looking in Portland too for my golden nugget.

Hi @Max Brunke, I've been looking at a lot of different options lately and I think the most attractive to us these days is Arthur Garcia's recommendation of investing within 2 hours of the area. Looking to the north and south of Portland I still see plenty of affordable places that have strong rental markets. Also, being an Oregonian almost my whole life helps me know the areas a bit better too. I do like some of the idea buying a more "distressed" property and bringing it up to ARV with repairs, but with a full time job and no experience under my belt I think I'll play it safe for now and look for a decent SFR or duplex that doesn't need a ton of work.

One thing I keep coming back to is that the prices everywhere are somewhat inflated compared to where they might be in a few years.  On one hand, I don't want to buy at a price that will effectively lower my returns for many years to come and be kicking myself when prices begin to fall (especially if invested a lot of the cash I have saved and can't finance more better deals).  But on the other hand this kind of thinking also just feels a bit like beginners nerves and it seems that getting started with a decent deal now is better than doing nothing.  What do you think?  Any advice?