All Forum Posts by: Melissa Dorman

Hey Kris, 

I'm new to investing as well and asked quite a few seasoned investors this same question. The best answer I found was that although properties will more easily cash flow in other markets, as an out of state investor, you miss out on a lot of the value-add and with it the returns when you invest from afar. To invest out of state, you often have to rely on other people (agents, landlords, turn-key, contractors etc) to add value to the project (find it cheap, rehab it on a dime, tenant screen, manage it) and they get the rewards, while you are left with the crumbs. Not to mention the lack of appreciation in many of those markets. Then, just one flight to fix a problem could devour your cash flow for the year on a single family. On the other hand, if you invest first in your own back yard, you learn the tools to add more value in future out of state investing and could probably accumulate capital through appreciation and forced equity in your own back yard, large enough to do bigger deals that make more sense managing from afar. For example, if you bought a few small multi-families for a few years and benefited from the growing appreciation in Portland, you could take a HELOC from those properties and put a 20% down on a 20 unit property in a cheaper market and place an on-site property manager to run the whole thing. Or better yet, you could build a reputation among friends and family and gather funds to invest in larger deals out of state down the road. Best of luck in whatever you choose!

I'm looking for cash flow and I want to build a portfolio of 30 units in the next 8 years, where each unit cash flows $100-$200 each. I have no experience managing property, but I do manage a small car rental business, so I have experience training tenants and dealing with sticky situations. I'm young and have a pretty high tolerance for risk at this time. 

So I'm moving from LA to Portland, saving my pennies, and looking to buy my first property (likely FHA 5-15% down, owner occupied). Inventory is scarce and prices are steadily rising. I will have about $50,000 for down payment and closing costs. Would it be better to start with a duplex that is about $300,000 that brings in $2,000-$2,500 in rents or a Fourplex for $500,000-$650,000 that brings in $4,000-$5,000 in rents?

Sounds like ultimately taxes increase for a local area when property values increase (and probably new ownership/new land to value appraisals). Doesn't matter if it is owner-occupied or rented out. Property values increase when neighborhoods improve. Perhaps the buy and hold investors contribution to the neighborhood is helping the neighborhood improve, one property at a time. Thanks for the feedback all! 

Thanks @Patrick Liska!  Any ideas on how to most ethically invest in under served communities, beyond being a great landlord? I don't plan to buy in rough areas, but the question often comes up in my network of professionals (as I am a social worker in my day job). I want to begin offering financial IQ classes at inner city schools in the future, but also curious what someone can do as a landlord to help the community without necessarily pushing out long term residents. 

It is very convenient for the seller to try and convince you it's a money maker. I'm not sure what percentage your down payment is, but if it is less than 20%, then run the numbers with a 20% down payment. That might be the discrepancy. 

Hey all, 

I've been contemplating the impact that gentrification and real estate investing have in under served communities. I'm curious if anyone knows.... I heard that counties/states property taxes go to benefit schools, parks, etc of local neighborhoods/counties. If you buy properties outside of your county/state, do the property taxes still go towards these things? Or are they redistributed to where you live? 

In other words, does it negatively impact the neighborhood tax resource wise if I buy properties outside of my county and rent them out? 

Part of the value you can offer as a landlord is being present long term to manage it yourself. If you are looking to leave, then you have to hand that margin and value add to property management and will loose percentages of return on your investment.  I'm in a similar predicament in Los Angeles. I was just about to buy a duplex and my spouse found out she got into grad school in Portland. We ultimately decided not to buy here, but rather wait and buy in the market we live to maximize returns and our opportunity to have control over the property/tenants etc. 

I just have a few more episodes so go to finish that goal myself. I started studying real estate in December and will be moving up to Portland to buy my first Multi-family at the end of this year. We seem to have a lot in common. What course did you purchase? 

I haven't bought yet, but I'm moving from LA to Portland and even the deals on RedFin with 20% down often cash flow. Not sure on single families, as I'm interested in 2-4 units. Compared to other large markets on the west coast, the rents are much higher for the cost per sq foot of property. Meaning you get a much higher return on investment, easier to qualify for the loans too. Not to mention, for a buy and hold investor, there is currently no rent control!