All Forum Posts by: Josh Garner

Welcome! A lot of folks (myself included) are leveraging their homes in expensive markets (ie California, Oregon, etc) and moving that capital into more affordable markets (long-distance investing). I leveraged (via HELOC and a cash-out refi) my home and a rental property I had in Bend in order to buy in Tennessee, where our money goes a lot further, and my wife and I have roots. Any chance you could do the same?

It's super tough to consistently find cash-flowing properties around here. It seems most investors are buying for appreciation alone....pretty risky if you ask me.

I use OnPoint for some small business products and HELOCs that they offer. Leanne Skoog is my contact there.

Academy Mortgage has good access to renovation loans, cash out refis and purchases. I'm your contact there:)

My advice would be to shop around for different products, depending on what you need...you'll find that a bank will do one product really well, and others not so well. If one bank or lender did all products the best/cheapest, they wouldn't make much $$$ and be out of business in no time.

If you're looking to grow your portfolio, I'd do it in a place that cash flows (probably not the West Coast or Northeast). If you have family or friends that live in the South or Mid-West, start looking at rentals there, as these are classic cash flow areas....probably not going to make you 10% year-over-year appreciation like Oregon has the last 7 years, but you'll convert your appreciation into monthly cash flow. David Greene's book is fantastic at touching on these scenarios. If you have 260k in equity and it's only making you $500/month, that's a 2.3% cash on cash return. I bet you can do better elsewhere:) Happy investing!

I'd be ok pushing it to August...summers are always crazy. Day of the week doesn't matter too much to me.

Another strategy could be to do a cash-out refi in 18 months instead of selling (I'm assuming you'd like to re-deploy your capital somewhere else). You could still take advantage of a partial exemption on capital gains (if you eventually sold it), assuming it was your primary residence for 2 of the previous 5 years.

If you had a rental agreement in place at the time of cash-out refi, you could count a good chunk of that rental income towards your monthly income to qualify for the new loan (percentages vary based on loan type, but are generally 75%). 

This is the strategy I pursued, and I essentially "sold" my former primary residence to myself via cash-out refi, then bought another home here in Bend. I'm coming up on the end of my 2-out-of-5-years time period, and am selling to avoid major capital gains, but with this strategy I was able to hold on to the property for an extra 3 years, netting me lots of appreciation.

A good CPA will provide some more clarity on your specific scenario.

@Karen Margrave is a great resource for 1031 questions as well, and is here in our local market. She gave a great presentation on 1031's at our meet up a few months ago.

Not sure if it's helpful, but anything over 30 days is not considered short-term in Bend. Airbnb has plenty of listings with a 30-day minimum, due to owners not having a short-term rental city permit. Space is at a premium around here, and I don't imagine you'd have too much issue finding suitable visitors interested in whatever space/timeframe you were offering.

In Bend, demand is soaring, and supply is limited, and was just limited further by the recently adopted UGB, which can't be updated for another 20 years, as I understand it. I certainly don't think that the bear market will go on forever, but many signs point towards more price appreciation in the next couple years....after that, your crystal ball is as good as mine:) We've pretty much seen 10% price growth every year for the last 8 years, and average (not median) home price at the end of Dec 2017 was 470k. If we get another 2 years at 10% growth (before we see a dip or leveling in the market, the average home price will be 570k....3 years would be around 625k. 

It's a terrible time for cash flow, but a great time for appreciation. If cash flow is important, look into Redmond, Prineville and LaPine. The Bend cash flow ship sailed back in 2012/2013.

Hehe, small world. My wife and I are from the south and live in Bend. She lived in Chatt (she also lived at the New for a few years), where we own some rental property. I was born in Memphis, but now a contractor and mortgage broker here in Bend. I do some mountain guiding on the side. We should hang out....I'd love to be a resource for you! 

@Erik Perotti Sounds like your thought process is spot on! A property such as that could be a good way to get your feet wet, and you'd learn from the process for sure....very valuable experience.

If it's helpful, it's worth noting that many commercial lenders, when underwriting for investment properties, will account for around 30% of your gross monthly rental income to go towards maintenance, vacancy, repairs, etc.....costs above and beyond the Principal, Interest, Taxes, Insurance, HOA. I try to use a number around that 30% when analyzing a property that I'm about to buy (even if it's a Single Family Home), because I know that if I'm holding it long term, I'll experience those costs eventually.

Personally I think that your ideas are right on the mark....keep looking, keep analyzing. Talk to banks and see what they'll lend on and what costs they account for. You'll find something great, even if it's not in Bend! 

I agree with Jay on the 70% rule...would be very difficult right now. Most of the "investing" aka non-owner occupied purchasing going on in Bend right now is speculative. Investors are banking on appreciation alone, as cash-flowing properties have been out of play for several years now (unless of course you have a 50% down payment and don't mind a small return...just looking for a place to park cash or need a tax write off).

If you're looking in this area, and would like a long-term buy and hold with some cash flow, you might check out Redmond to the North or LaPine to the South. Those areas have better price-to-rent ratios, much lower entry point, and are currently being flooded with renters who work in Bend but can't afford the housing prices...the traffic on Hwy 97 speaks to that:)

Best of luck!