All Forum Posts by: Mike Nuss

Hi @Gechi Erinne, sorry you won't be able to attend. We hold our main monthly meetings once a month on the second Thursday of each month. That's the longer networking meeting with a specific presentation topic. We've had some amazing speakers doing awesome work in our metro area come speak this year. 

Next month (September 13th) Brad Kraus is coming to take about staying out of landlord tenant law. He's a great resource for local landlords. 

We're bring Christian Kalor back in October. He's a State Economist for the Portland Metro area. If you're at all into economics and our real estate market, you won't want to miss Christian. He's not your typical economist and he'll have a fresh census bureau "data dump" to present. Last year we had to cut the audience and their questions off so the poor guy could grab a beer and wet his beak. I highly recommend coming in October. 

We also host our "master class" which are investment focused continuing education classes brokers every other Thursday. Non licensed RBIN members can come to those as well. 

I hope to see you at a future meeting, 

@Soobin Oh this meeting will be good for you as Blake and Jessica will basically going over their investment career. There will be some newbie type info. 

As a group, we have moved away from the new investor specific topics for our monthly meetings. We are planning on doing a new investor seminar early next year to go over the basics in a group format. 

I wouldn't say these meetings are for "more seasoned real estate folks". The room is filled with all type of experience levels. Honestly, it's all about networking. New investor stuff is just as easily (if not easier) learned online or by reading books. The nuances of doing deals is something you learn by taking action and meeting people that have done or are doing what you want to do in the future. 

Don't let the lack of experience keep you from meeting more seasoned people. Everyone starts somewhere and you'll find our group has quite a bit of compassion for people starting out. 

@Adam Read it's both. It's a membership based group, but the first time is free to you can get a feel for the group. If you like it you can join. If you don't, no hard feelings. Thanks for asking!

@Jay Hinrichs that's a great idea. Do you have a contact you could recommend for me to contact about speaking?

@Phillip Pommier thanks for the shout out

@Colin Johnson and @Bryan Atkinson come join us Thursday night. First beer or slice is free and the room is full of engaging people. Hope to see you there!

@James Edwards what jurisdiction is this in? Jurisdiction matters immensely to answer your question.  

@Ciarraghe G. you've had some good input so far.

I'll add two points. Opening a HELOC, but not actually drawing on the HELOC, is like "stock piling" cash without the cost of the interest burn. That's a really good strategy in my opinion. HELOCs do not cost much to set up, but give you the ability to bring cash to the table in a short period of time. The downside to HELOCs is that they are adjustable rates and callable notes, they're not long term debt instruments, but they're very useful none the less.

One thing I would mention, in regard to "cash flowing" properties out of state. Based on your comments, it doesn't seem like cash flow is really a goal of yours. You're strategy of highly accelerating principal pay down suggests this. It seems you're more into wealth building than cash flow. 

There is always an argument of cash flow markets versus appreciation markets, but given your circumstances it seems an appreciation market is a better wealth building tool for you. I don't mean this due to the appreciation either. I mean this because "appreciation markets" are typically more expensive markets. This means, if your acquisition is leveraged, you'll have much more principal reduction over the life of the loan/ownership. You'll also receive much more depreciation than in cash flow markets, which can be very helpful to you as a high income producer. Cash flow markets can be great for the right goals, but principal pay down alone, in say a Portland property, can out produce the cash flow of say an Indianapolis market alone. Then you have more depreciation and most likely appreciation over time. Also, if your goal is to hold long term, a potential downturn in the market shouldn't be a huge concern, as long as the property continues to have a net positive cash flow. Portland's fundamentals are very solid for the long term so I wouldn't just ignore the market you're already in. There is still a ton of opportunity in Portland in my opinion. 

@Wendy McIntire what are the size and br/bath counts on those units? I own a few very well located, fully renovated, historic 4plexes and not one of them brings in $8,800 per month. I have a couple that bring in around 8k, but to get $8,800 this building should have larger units. 

Be careful using “projected rents”. Brokers in Portland tend to get a little aggressive in their marketing of small multi family props. If your potential property really brings in $8800, it would fly off the market at 1.1mm here. 

I’m definitely making some assumptions, but wanted to point this out as I have seen a lot of bad purchases for 2-4 units in Portland. I’ve also seen some awesome 2-4 unit purchases though and highly agree with @Neal Collins about a 4 unit building being a great house hack opportunity. 

@Paige Kelsey Grant's podcast was a great one for sure. His take on buying newer high vacancy buildings in low cap markets (ie Seattle), and holding on in the interim, is a great strategy in my opinion. The current excess of new supply will get soaked up over the next 24-36 months and we will eventually get back to an undersupplied market. I personally love buying in low cap markets as efforts are rewarded more than in higher cap markets. For example 4K of NOI in a 4cap is twice the reward as 4K NOI in an 8 cap market.

One thing I learned during my time as an appraiser, is that understanding market segments is key to seeing the bigger picture. Longview is a market in and of itself....completely different from Vancouver, which is different from inner Portland, which is drastically different than east county. It amazed me that you said cap rates in Longview are around 6.8. That's a huge "sell indicator" in my opinion as I believe that market should be in the high single digits at minimum, given the low owner occupancy rates and distance from true metro areas (although it's close to Vancouver, I think Camas, Ridgefield and Battleground will feel Vancouver's growth before Longview does). 

Thanks for the post vote, I'm glad you took my constructive criticism as a positive.

Good morning @Paige Kelsey....here are my thoughts. I hope they're helpful. Please consider this an opinion/constructive criticism at best. 

1) The financing numbers are pretty unrealistic from what I've dealt with the past two years in commercial loans. 0 points, 75% ltv and 5.5% interest with 30 year am won't happen. The interest may be realistic, but you'll be looking at a 25 year am with 10 year balloon at best. The DCR overlays will probably bring your ltv closer to the 65% ltv range and you're going to be paying atleast 1 point at closing and 4-5K on the appraisal, so expect closing costs to be much higher.

2) Investors bringing 1mm+ to the table won't settle for a 10% ROI at exit strategy. The ROI, including exit, needs to be more like 20% year over year, in order to attract that type of capital.

3) Never ever invest in real estate that results in a negative return after a year 1 cash out. 

4) 100K in repairs is less than 2K per unit....I don't know the Longview labor market at all, but I assume you're not doing much with that type of budget. 

5) $50/unit rent increase is nice on 64 units, it does result to a significant amount of gross $  "equity", based on a 7.6 cap rate. However, that results to less than 1% increase in value. Reposition purchases should be increasing value by a minimum of 30%....although this doesn't sound like a value add/reposition deal. 

In my opinion, the price needs to be dropped over 500K (maybe more like 1mm) in order for this to be an attractive investment and not considered pure speculation.....and I don't think Longview is a good speculation market. It can be a cash flow market, but speculation is better suited for metro areas like Portland that have a history of consistent appreciation. 

Again, please take this as constructive criticism. I really dislike negative attitudes and posts. I've read some of your past posts.  You bring a great attitude and good knowledge to the table. I just thought I would chime in on this one in hopes that the above points bring some more perspective to your analysis on these types of properties.