All Forum Posts by: Mike Nuss

@Jonathan F I own no property in Oregon City at this time. My closest is in Gladstone (which also has a lot of upside in my opinion). I sold a two 4,000 sq. ft. spec homes on some close in acreage recently so I have some history in Oregon City, albeit a totally different strategy than buy and hold. I've been meaning to create a marketing list for b&h in OC for a while, just haven't gotten around to it. 

OC's problem is the lack of large employers. There is a bit of proximity to downtown in the overall scheme of things, but is a long way from the large employers in Hillsboro and Washington Co. Proximity to Wilsonville is good though. Heck, that BK'd paper mill was the largest employer until recently. Those are the downsides of OC at this time. 

The positives are that Hwy 99E currently separates OC from the Willamette River. That will change once the mill site is developed as Metro definitely has a stake in that water front. The developer has been discussing a water front boardwalk/rec area of some type (given to and developed by Metro of course). 

As Portland grows and the MAX comes further and further south OC will become more attractive. ODOT is spending a ton of $ improving 99E between OC and Milwaukie right now so that helps too. 

LO/WL little step cousin, I like it and is exactly what I was thinking when writing the post. LOL. 

Ha, some realtors sure make it easy to dislike realtors. Lets try to put this into context as "no comps" doesn't give much insight. Have there been "comparable" properties put on the market over the past 4 years? If so have they been cancelled, withdrawn or are they still on the market? The reason I ask is there are neighborhoods in my area that you will find "no comps" or "few comps". This isn't due to a lack of demand (NW Uptown comes to mind) this is due to a lack of supply. Few properties sell because owners do not want to sell. How can a buyer buy if there are no "sellers" in the market? There are many property owners because the neighborhood is fully developed, but there is no or little incentive to sell because it is such a desirable location. This is just an example, but an idea of the thought process I take when I hear "no comps".

My suggestion would be to talk to another realtor. Well, my first reaction would be to fire my realtor if they can't give me any feed back as to why there are "no comps". I'd also question them about what their definition of a "comp" is. Talking to an appraiser would probably be a good idea as well as appraisers are typically required by their clients to provide comps. Some properties require the appraiser to search high and low and get creative with the "comps", if the sales comparison approach to value is a requirement of the appraisal. 

As a client, telling me there are "no comps" and for this reason a sale will not happen, simply is not acceptable to me. The way you've posted your scenario I have to believe this realtor isn't competent to list your property, especially considering you've had 6 showings over a weekend. Showings are one way to look at demand. If people are looking, demand exists. You have a property on the market so supply exists. A sale will occur in this scenario, it's just a matter of at what price. 

Hope this helps...

Hi @Jonathan F 

Welcome!!

As Jacob mentioned Salem is a much less expensive market and has better rent to price ratios. 

I'm a fan of the Oregon City market for the long term. The Blue Heron Paper Mill was finally purchased. In my opinion this has the potential to become one of the more iconic water front developments in Oregon. The falls are historic, the size is there, buildings are located on both sides of the river and the developer from Tacoma has an interesting vision for the area. The downtown area has an RNA designation. Many buildings have recently been renovated and many are in the process right now. Oregon City has the potential to be special due to the Willamette River frontage, amount of historic homes, history (end of the Oregon Trail) and proximity to major freeways. It's small in nature, but that will lead to less supply, less sprawl and better demand to supply ratios into the future. Just my two cents....

Listening > sales skills for most deals. 

A good listener can always craft a scenario better for the seller than a salesman. 

Sales skills come best on purely motivated sellers as it is about getting the deal signed fast. 

Personally I prefer a slow dance negotiation where giving the seller what they want is more achievable. I've found the high pressure sales guys are typically the guys that give our industry a bad rap. 

@Rick Fonseca, this totally depends on your market and is all relative to the market segment. 1,200+ sq. ft. is pretty large for a two bedroom. If I'm working with a two bedroom of that size in my area (considering it is all above ground sq. ft. and one level, for perspective) I may only find 1 or 2 "comps" that have similar size and two bedrooms. However, I'll probably find many more "comps" that are similar in design, age and style, but have 3BR.

For example about "it's all relative"...consider a three bedroom home that is 900 sq. ft. or less. A three bedroom floor plan may actually be worth less than a two bedroom floor plan  in that scenario as that is not really enough sq. ft. for good room sizes and a functional floor plan. It may be more, but this is just an example (and not an appraisal) of showing relativity in the market place. 

My initial thought when seeing this post was do some more exploratory work. Was it originally a 3BR converted to 2BR? Can you add a wall or two and make it a 3BR? 

As for an appraiser "dinging" value on the three bedroom comps versus your two bedroom comps......you never really know. It depends on the appraiser. Appraisers are humans. We all look at a lot of different data, then we choose individual "comps" from that data pool. We all are going to have our perspective and analysis on the data. Since we're humans we may disagree on those data perspectives. 

As always though, it's all relative to your market segment. Work backwards from your end retail buyer's and try to figure it out for yourself how much demand exists for a two bedroom versus a three bedroom. 

Seeing a very high Price/BR as a unit of comparison is common for two bedrooms in my area. You can find very similar $/SF for two and three bedroom homes, but when considering $/BR those numbers can skew very very quickly. 

Hope this helps as it is more of a rant than a post. Let me know if you have any more questions and I'll pitch in. Just remember I'm in Portland, OR which is probably a very different market than Chandler, AZ. 

@Julie O. "Sometimes it seems that I know what I’m doing, sometimes not.Someone once told me that, whether you’re at the start of end of your learning curve, some people will think that you’re a genius and some will think you’re an idiot… often within seconds of each other… so remember that you’re neither, and move forward with humility and confidence.For me, that’s been great advice."

Solid paragraph right there. 

Good luck (skill) in the out of area investing. Portland is tough and not for the faint of heart. Competing with developers and owner occupant purchasers make listed properties seem outrageous in the MF and land/redevelopment world right now. Time will only tell if "appreciation" remains in our market. Either way deals can be found anywhere and I'm sure you'll get the ones you're looking for. Happy investing!!

PS, welcome to BP.

 @Chandler Willcuts, I fully understand where you're coming from here and I appreciate the position. However, I have the opposite perspective. 

I am a deal junkie. That doesn't mean I go after bad deals, but I love the excitement of new opportunities. I know a ton of "investors" that only go after "homeruns". What I typically see is them sitting on the sidelines while others are consistently hitting singles and doubles, creating cash flow, making private lenders happy and earning themselves some income and reputation. The "homeruns" are the easiest deals to fund. If you truly have a "homerun" it doesn't matter how many properties you have or how spread out you are.....a home run will (should?) get funded 100% of the time. 

Just my two cents, but that is the beauty of the RE. RE doesn't favor any one style or opinion. RE favors the fighter in the arena consistently taking action, however that action may take shape. 

Chandler, are you related to Marc and Matt? I'm assuming you are, in which case, I'm sure you have plenty of solid RE advice backing you. Happy investing!!

@Jason Quick gave you the quick rundown on valuation. Market Approach or Sales comparison approach, income approach and cost approach. Honestly, as an appraiser, valuation is not a science. You don't gather data, throw it into a computer or formula and it spits out a value. Valuation is an art based on principles. Valuation comes down to interpretation, comp selection (even the income approach to value uses market data from "comps") and validity of the techniques and data used. 

Valuation is more important for short term flip style deals when the exit strategy will take place in a short period of time. Market conditions change, and so valuation becomes less important on hold properties. Honestly, FMV is an over rated piece of investing for hold properties. The income stream and the financing are the important factors.

Our Portland market is crazy with "investors" paying cap rates in the 4-5% range (or less). Or Gross Rent Multiplies of nearly 200 or above (yes, $3,000 in gross monthly rate equates to $600,000 in value for some neighborhoods). Why compete with that? Run numbers that make you comfortable. Negotiate with a seller based on what they need, not want. Structure the deal to meet what they need, while meeting your goals as an investor at the same time. Some of our best deals are when we paid at or above "market value" for the property. These scenarios worked well because of the way we structured the financing. 

Financing and Real Estate are typically combined, but should be looked at and analyzed independently. A "great buy" can be ruined by bad financing. A "bad deal" can be saved with the right financing. Don't beat your head against a wall battling a seller looking to get offers you are not willing to make. Instead, respectfully decline, let them know why the deal does not meet your goals and leave on good terms. 

Listening to and understanding the seller's needs are much more important than what the property is worth (in a hold property anyway). If the seller is fixed on price, work with them instead on creating a finance structure that allows to meet price and still create cash flow. 

A mentor of mine put it very simply today. "As investors we are looking for a receptive audience in the right location. An audience that happens to own RE in a well located part of town". Let your ears, knowledge of tools and the market do the rest.  

If valuation is a big concern (which it should be in the right scenario) I suggest getting intimate with your investment area. Know the players in the market, know the comps, know the cap rates, know the GRMs, know when a property hits the market, goes pending and closes. Keep an eye on outliers, talk to sellers on a consistent basis and become your own valuation machine. You'll learn more from looking at 50 homes in a certain price range than any appraiser can tell you about a specific market or property. Spend time getting to know your arena and you'll become a better "appraiser" than the licensed "appraisers". 

@tyler Haskell, you already identified what you have to offer. No active investor is going to pass up a bird dog looking for deals. Painting in exchange for knowledge, that's a serious value proposition. @David Huston laid it out very well. Come prepared, know what you want, listen to what he needs and find away to bring value. Active investors, especially those involved with the REIA get many people such as yourself asking for their time. I find that they're willing to provide that time as long as it doesn't become a "time suck". No one wants their brain just to be picked. The best relationships I have with newer investors are the ones that understand it's a give give relationship. I have knowledge, a network to share and willingness to share it. But that giving will be short if there is no reciprocity. I can tell by your post that you already understand all this. Good luck in your ventures.

@Jacob Asher, I think you'll find that the general REIA meeting is more about the national gurus and systems being sold. They haven't advertised who's coming in September, but the general membership meeting is where the Gurus come to sell. The break out meetings are where the best discussions take place. Go to the Roundtable meeting in Salem, it will be worth your time.

if you're willing to make the drive to Portland I highly recommend checking out the RareBird Investor Network. No Guru's allowed. Only local, relevant speakers, sharing their knowledge without selling a system. You'll meet investors and industry participants for all fields in RE. I strongly believe it will be worth your time. 

Toija Beutler (RE Attorney, 22 years, over 17,000 tax exchanges) of Beutler exchange will speaking next Monday the 11th. Deal analysis on the 18th. We had an awesome infill and zoning discussion last night. Come check it out. Lucky Lab Pub in Multnomah Village. 6:30-9:30pm.

You'll find Salem is a good buy and hold market. Strong tenant base, much better rent to price ratio than the Portland markets and enough population to keep vacancy rates low. I highly recommend doing direct marketing for your deals. You'll find better success meeting face to face with sellers than you will looking at the WVMLS listed properties.