All Forum Posts by: Mike Nuss

https://www.biggerpockets.com/forums/521/topics/328329-portland-oregon-summer-2016-meet-up

Here you go

6:00 at Vintner's Cellers

Emma, it's tonight. I'm trying to find details myself. @Randy Johnston may be able to help. 

it's in NW at a place called "Vintner's" I can't remember the other word. I think it starts at 6:30. That's what happens when you fly by memory. :)

Hi @Emma Lincoln

That's one large building (2,000+ sq. ft.) you have there. Sounds like a fun project. Here are some thoughts that come to mind. 

1) You already have a commercial building in the eyes of the building code. 3+ units is commercial in the building code. 5+ units is only "commercial" in the lending world. 

2) You absolutely do not need a licensed architect, but I agree with @Scott Radetich that you don't necessarily want to leave design in the hands of a contractor. Contractors typically don't think like designers. 

3) Be prepared for a fire sprinkler system. This will be a must for the new basement units, and may need to be retrospective for your other 3 units since the new units are inside the same structure. 

4) Design build may be a way to go. Architects tend to escalate construction costs due to the design. 

5) Get ready for a fun permitting process with Portland. Since you're existing improvements are residential, there is a good chance you will need quite a few "building code appeals" to be approved. For example, basement ceiling height in the commercial code is 7'6", rather than the 6'8" for residential building code. 

6) This will not be an easy project, but adding two units in Portland could quite possibly be worth the hassle. 

7) If you have any intention to use conventional bank financing, do it now, while it's a 3plex so you're looking at 1-4 unit financing rather than commercial financing. 

I hope this helps!

@Eric Stanley everyone in the Portland area with a retail perspective is in that boat. Plain and simple, you have to have a different perspective about the market in order for it to make sense. 

Canby can be a great market for you to specialize in, but you have to go beyond looking at listed properties. Learn the fundamentals of real estate, acquire some deal structure tools and go talk to building owners. 

@Daniel Smith, @David Faulkner nailed it. In my opinion, looking strictly at cap rates for investment properties is a sure fire way not to do well. Cap rates have one purpose and one purpose only. Which is to connect net operating income and sales price (or value) to a yearly return on investment. That's it. In the world of real estate investing that's only needed for a few things; borrowing, purchasing/negotiating and selling. 

Profit comes from all the cracks and crevices in between those 3 events. Most people that complain about low cap rate environments don't understand the nuances of real estate. Low cap markets allow you to double financial rewards for the same amount of work (most of the time less) as higher cap rate markets, and that's just quick math on the cash flow side of the equation. That doesn't include appreciation, which many people call speculative, which shows misunderstanding of the nuances even more. 

Low cap markets don't require appreciation in order to be better assets in the long run. They're huge tools of leverage. Just paying down one mortgage in LA can be more beneficial than buying 10 rentals in Kansas City. 

Cash flow is all about deal structure and mindset. Understand deal structure and you can cash flow LA. Guaranteed. 

I'm in

Hi Joel, unfortunately, Thursday is the day for now. I recommend signing up for our mailing list. We have one weekend seminar scheduled for September. We have been having a networking mixer every other month and will be hosting a bbq mixer this summer as well. You can always review our meetings on our website, which has the presentation power point as well as the audio from the meeting. 

Hey @Joel Bowen there are no contracts specific to Oregon. Realtors, typically use OREF (Oregon Real Estate Forms) paperwork. Many will tell you this is "the proper contract specific to Oregon", but they're wrong. 

Really, all you need is an agreement that is legally binding and that you're comfortable explaining to your sellers. I've seen this range from 1 page to 12 pages, just depends. The level of detail in the paperwork, should really come down to your comfort and the sophistication of the deal. 

The assignment agreement, is a whole other agreement, that comes in to play when assigning the purchase agreement you already have in place. 

Stevens and Ness is a known source for non realtor forms locally. 

@Steve Moody I would take it a step further and say that most people only look at the numbers. Owning real estate is so much more than #'s. #'s are essential, but even great numbers can result in a big fat $0 with poor relationships and/or poor management.