All Forum Posts by: Mike Nuss

@Steve B. you and I must be talking to and meeting a bunch of different people.

This "the ROI are going down on flips in the Portland metro" simply is not the case right now. 

You may be right for Portland as a whole, but the experienced people who have stayed in the Portland market are seeing the best ROI we've ever seen. 3 of our last 5 flips have set new records for us in gross returns and ROI and all of our hold properties are penciling very well (even when factoring pm, reserves, maintenance and vacancy).

@Amanda Coleman don't let Steve fool you. Portland is about as ripe as any market can be for the oh so common BRRR strategy. It just takes more "work" than looking at RMLS.

@Steve B.. and others who keep preaching the outlying markets. I've heard the following statement many times.

"others have stated the dumb money is still driving up investments here while the smart money is looking outside Portland as an increasing population will drive up previously under appreciated outlying areas as a matter of simple demographics."

This position doesn't make sense. You're basically saying that 1) Portland won't have any appreciation because of dumb money increasing prices and 2) outlying areas still have appreciation because of migration. This mindset only looks at the negative in Portland and only looks at the positive in the outlying markets. Either way it’s short sighted.

If 1) is true. Then yes, you'll see appreciation in both types of markets. That is until the dumb money bursts the bubble, in which case these outlying markets will crash faster than Portland.

If 2) is true. Then Portland still has upside in appreciation. If this is the case, Portland has added leverage, so that can increase returns greatly over the alternative secondary markets.

Portland metro prices and rents are increasing right now as a side effect to Portland's rapidly increasing rates (which as @Derrick Aragon correctly stated is a function of high demand and low supply). Either way, Portland is the driving force in both cases.

I believe it is much more advantageous to be a "smart buyer" in Portland, buying properties that make sense with "forced appreciation", creating positive cash flow, a large % of equity and a cushion should the market go down. Buying properties in cheaper areas just because Portland is too expensive will have the same result in the end, just with lower leverage being factored in. We either get 1) Portland crashes, so do the outlying markets. In this scenario the alternative markets help you lose less because of leverage. Or we get 2) Portland continues to go up, which will continue putting upward pressure on the outlying areas. In this scenario the alternative markets earn less because of Portland's greater ability to leverage.

Portland has so much opportunity right now that ignoring it because of "dumb money" is super short sighted. Changing to a cheaper market doesn't make up for the work that you have to do, in any market, to mitigate risk in your acquisitions. If you're going to put the work in to be successful, you may as well put the work into a more expensive higher demand market. Portland's proven that it crashes less and rebounds faster than the suburbs. And it's not like the suburbs create great cash flow, so the lure of the secondary markets doesn’t make a ton of sense to me, unless you’re investing for appreciation, which starts this cycle right over again. :)

We are reserved at the Green Dragon on 9th just south of Belmont. April 19th we can start showing up any where from 6:00 to 6:30. @Robert Laird and I will be supplying some appetizers. No host bar with lots of great Portland beer. 

@Robert Laird @Amanda Coleman Lucky lab runs between $100-$200 for 3 hours, depending the night of the week. We would get a private bartender included in the cost. I'm happy to pay for it. let me know if you want me to schedule it or if we want to see if @Jessica S. comes with a better solution. 

@Jessica S. the short answer is this probably isn't in your best interest. Plottage value can be created when combining two properties, but they need to be the right properties. 

In your case you're looking at a total lot size of 10,000 sq. ft. with a R2.5 zoning. Your current 5 plex already maximizes density more than what the code would allow without a density bonus (which you would need a "d" overlay for). Your neighbor is pulling your density down, which probably results in pulling your value down. 

Having a 5plex grandfathered on a 2 unit site is not something typically best shared with neighbors. 

This is a short answer to your question based on the little info to go off of. I hope this helps. 

Unfortunately @Account Closed Neal is correct. ADUs can only be added to single family property. I have the code here somewhere, but not the time to dig it up. A new unit to a 2+ unit site will be classified as a new unit. The new unit will have to adhere to the commercial building code and will have to be sprinklered. A lot line will have to be "implied" when figuring distance between existing structure, firewalls and window % of the facade. It's a much more difficult process than simply building an ADU.

@Robert Laird thanks for thinking about our meetings. I'm in on a Tuesday (or Wednesday) and would love to see an Eastside venue as well. 

@Account Closedlets chat today. 

Congrats @Account Closed

By far the worst part of our actions are the side effects on the tenants. You've framed it the correct way. When a seller is ready to sell, they're going to sell and the tenants will most likely feel some pain. You're definitely offering the tenants more than most of your competition, which should help you sleep at night. 

Where did you find a listed duplex for less than $250,000

@Marc J Brooks don't be bummed. You didn't miss anything live that you can't learn on BP. You're actually probably better off, as most outside "guru" types have no clue about the nuances of our micro market. Wholesalers have little to offer sellers in Portland so you have to have a very wide net (lots of marketing $) to make wholesaling a sustainable business model. Also, let's be honest. All wholesaling really is, is acquisition with a twist. That's why it's a typical starting point. Successful RE investors know how to find and create value. It all starts from there.

Title companies are the free way to get lists. Paid members on BP get access to their calculators. I found that creating your own calc on an excel sheet actually makes you better at learning the #s, is easily tweak able and 100% customized to the way you want to "analyze data" 

PS, listen to what @Jay Hinrichs has to say. He's by far the most active BP member and experienced player from the Portland market. 

Good luck!