All Forum Posts by: Mathew Wray

Hey @Gordon Friedman,

Welcome to BP! 

I'm of the belief that it depends on your timeline. Are you trying to make a quick turn in the next year or two? Then maybe I'd weigh the factors a little more. I won't deny that our city has taken a hit in image this year. And, at the same time, the underlying fundamentals are still strong: more people are moving here than leaving, wages are still rising, and we're still picking up an influx of folks from tech-towns who can work remotely and want to be here. 

On the longer timeline, I don't worry. I've heard people talking like Portland is the next Detroit and I just don't see it. Yes, many of our restaurants and businesses are hurting...but that's not unique to Portland. As restrictions end over the year I do expect to see more of those places come back on line. The chefs and small-business owners I know identify heavily with their professions. I haven't heard one of them say they're giving up and switching industries. 

I really look at like this: do you believe that we'll be better off in 10 years than we are now? With history as our guide, I think the answer is yes...property values will be higher, interest rates won't be as good but that's not a bad long-term thing (although I'll miss the cheap money), there will be a larger population base, the Urban Growth Boundary will still be in place. 

There will be some uneasy years between now and then as the city figures out how (or if they want to) handle the homelessness issue and hopefully business regulations will relax (but if not, there are other less-friendly cities that're still growing), but I'm still bullish on the long-term outlook. Just be prepared to ride a roller-coaster in the meantime. It might not be worth the risk and headache, even if you do believe the outcome will be better, but that's a choice only you can make. 

Mathew

Morning Dakota!

I've used my VA eligibility (USMC 98-02, 05-06) a couple times when house hacking, once on a SFR and once on a duplex here in Portland. It can absolutely work.

Lots of moving parts to consider when buying, but my general advice when you’re just starting out is to wrap your head around cash-flows and expectations. Look at it like a continuum...on one end you have 100% cash down which will obviously increase your cash-flow since there’s no loan. At the other end you’ve got 0% down which means you’re financing 100% so more of your “profit” is taken up with loan payments. You’ve just got to recognize that the risk/reward ratio has to work for you (risk=potential for feeding property for awhile, reward=able to get in to a property with little to no money out of pocket). 

Should be able to count 70% of the rental income towards your income although that may vary based on individual lenders. Just a heads up that they'll likely want to see a few months PITI in reserve as a 1st time landlord (often 401ks will have a hardship withdrawal clause that can count as reserves). Obviously there's a lot more that goes into it all, but you're on the right path!
  

He did a podcast on it recently if you search Story Brand or his name you'll likely find it...forgot to include that this morning!

Hey Calvin, great question and welcome to BP!

Im behind on podcasts and haven’t listened to 419 yet but believe I get what you’re looking for. While I have my dual google calendars set up (hard time bound appointments on one, to dos in the other), I think you’re looking for alternatives. Check out Don Miller’s Business Made Simple...he’s got a ton of courses one of which is called hero on a mission. I’ve watched his webinars and have his life planner. Well worth it! That life planner really elevates beyond the typical to-do list mentality by organizing your day to support your big goals in a logical, organized fashion. 

I’m sure there’s other ways & tools out there, but as a business owner, Don’s is working well for me. 

Hey @Wa Chan

Definitely re-read @Julee Felsman’s comment again. Now go back and read it again (side note: talk to Julee...she’s a lending and problem solving wizard along with a great person who closes transactions for me personally and professionally)

Your ability to remove tenants because you want to move in is going to be severely curtailed. There are ways to protect yourself (smart searches, writing outs into your offer, cash for keys, etc.) and position yourself ahead of others, but the bottom line is you’re not getting rid of a tenant who doesn’t want to go just so you can move in. Doesn’t mean you can’t find and capitalize on opportunities though! 

To answer your other questions briefly...

#2: yes, any experienced agent you’re working with will write the “subject to interior“ to include an out for you based on those results. 

#3 (and #4) together, I think the most important thing I can recommend is you work on your mindset around these points. No owner is selling a golden goose. You’re buying their problem, that’s okay because there’s your opportunity but make no mistake, the owners wouldn’t sell if their problem wasn’t painful enough. The trick is for you to do enough due-diligence to get a good idea of what the problem you’re buying is and whether you can handle it. (Side note: the #1 problem I see “sold” is poor management, which is solveable with the right PM). Bonus tip: do yourself a huge favor and get a good PM or if you’re going to go it alone (not sure that’s wise in Portland anymore for most people) give yourself plenty of time to learn the pitfalls and Oregon/Portland specific rules. 

Mathew

You can buy a rustoleum resurfacing kit at Lowe's or HD but I don't think they usually turn out great, or maybe I just haven't seen the results myself (I used one in a rental and it was "okay" but not what I was expecting). If you're just trying to limp along, it's probably the most cost-effective solution though. If you're trying to class it up a notch I actually think Ikea has great prices on countertops. I like the butcher block even though there are some long-term wear issues there, but it looks great in photos and isn't that expensive. Whatever you choose, just don't over do it on countertops if the rest of the kitchen isn't as updated...better to spread the money around across the kitchen and have it all on the same level than nice counters on ratty cabinets/sinks. 

My two cents!

You’ve got a couple options here that may work all sounding like they hinge on lending so I’d start there. 

Talk with your lender (send me a message if you need a good referral) and ask about your options. They'll run a number of different scenarios and those will help dictate a path forward. They'll also help you examine different amounts to put down (I'm recommending, in general, people hang on to extra cash and leverage low rates knowing they can often recast a mortgage in the future if they desire). They'll be the ones to tell you about your DTI so you might as well start that conversation now so you can start working on a solution if there is an issue.

A few options to consider:

Obviously a straight-up conventional loan from 5-20%+ down

A govt. backed, low down loan. 

A USDA 0% down loan (but you’d have to be further out than SE PDX)

Refi your current place and reuse the VA loan.

If your income is lower than you’d like, ask about a roommate loan. I know there are a few lenders that will use income from rented rooms to offset but there are income restrictions associated with the program. 

Best of luck, 

Mathew

@Sarah Buchanan I can't echo and agree with what @Mary M. said enough!!

There are some serious penalties for not handling screening in Portland correctly. While there is plenty of good, general advice for anyone to gain a baseline on this thread...it won't fly in Portland! Mary provided some great links that I would recommend brushing up on. It's also not a bad idea to talk with a LL/Tenant Attorney in advance: a half hour conversation now could save you $$$ down the line. Also, more and more we're seeing folks turning to professional property management as they're really the ones who are keeping up to date with the constantly changing laws and regulations. Happy to make intros to any of those as needed. If you do plan on doing it yourself (which is challenging, but doable) just make sure you do a google search once a month or so and make sure no new regulations have come out of PDX. 

Best of luck!

Mathew

You can attract some of those same tenants in outlying areas as well (think Nike/Intel)...biggest hurdles are future of landlord tenant law in Portland. That's where the risk reward ratios come in and are a conversation to have before I'd get too focused on neighborhoods. Your decisions there will help drive the "where" conversations. 

I agree with Bruce, start with areas that will build up your life...where do you work? Where do you hang out? Where are your friends? Then do what you’re talking about and layer in the qualities in an area that will attract those younger people you’re looking for to narrow down to neighborhoods.

Are you willing to be in Multnomah county/Portland proper/Milwaukie or focusing on Washington and Clackamas county? That’s definitely a deeper conversation around risk vs. reward and what your outlook on the future is!

Mathew