All Forum Posts by: Zach Davis

Might be helpful if you listed a skillset or skillsets you have that could be applied to the trade...

@Tara Ballenger my properties are exclusively small multi. 3/2s and 2/2s or 2/1s. I have not had an issue renting any of them. Studios and 1 beds tend to be more of an issue out that far.

I have some in Centennial and a few in Rockwood. It can take time to find a decent tenant out there but it is doable. I certainly wouldn't call those neighborhoods desirable but there are good tenants to be had. If you want to go out that far, you might think about straying into Gresham. There you can still use a no cause without paying them to move, at least for the time being. The properties I have in Gresham are very comparable to the ones I hold in Portland, but the Gresham ones tend to be easier to manage for that reason.

@Frederick Kirk Wendel Yes, single tickets below $2500 are considered maintenance (direct write off), over $2500 is cap ex (depreciated)... At least that's how my accountant has me separate my books. That amount has changed at least once in the last few years and I'd imagine its subject to a lot of factors that I don't know or understand, but that's the last number I was given and the way my accountant has me work my books.

Correct me if I'm wrong here, but my understanding is that this only applies if the property is purchased vacant. If the property is purchased occupied and then vacated the repairs/updates are subject to the over/under $2500 rule. Again, not a CPA, but that is how its was explained to me by my accountant.

Shop around, most lenders make you wait a year before they'll refi at appraised value, but some are 6 months and others don't care. 

I would have to disagree with staying away from the Outer East Side. A lot of it may be full of troublemakers, and I would never buy a class C/D property in a class C/D area but the reality is there still decent sized pockets of good hard-working middle-income people. The trick for me has been finding a class C/D property within those class A/B pockets and bringing it up to or just above the standard within that area. Then charge slightly less than market and over screen. There is plenty of money to be made in that type of value add game. 

The last set I bought increased in value over 50% in one year and market rents are up 20-30% in under 18 months. Thats not including the under market rents I bought it with, which is what my offer was based on. A portion of those increases are simply market factors, but its also being driven by people moving out further after being priced out of the "more desireable" areas.

On second thought, I agree, stay west of 122nd, its nothing but trouble out here. 

Buying properties with tenants in place can get you into trouble but it can also be a good way to get a deal. I do value add, buy slums and rehab them and in my experience, the slumlords are lazy and don't want to deal with the evictions. I've been able to get the last 2 properties at a discount just by not making it a requirement. I'm not advising this but it is an option IF you factor in the cost of the relocation fees in the case of a no cause or are willing to put in the time and likely expense of a with cause. 

I'm not in that area but nearby-ish in Centennial and Rockwood. Value add with inherited tenants can be rough due to the new ordinance, (makes it difficult and/or expensive to get the bad ones out) but once they are out there are still good people to rent to. We've found a pool of renters moving out of the higher priced areas into more affordable homes in locations they wouldn't have considered a few years ago. Values are still relatively low in those areas and rents are still increasing, so the numbers make sense if you buy right. 

I second what Michael Jones said. It happens whenever there is, what they consider, an under market sale. The last time it happened to me they were harassing my tenants. I just avoid the calls and toss the letters. Usually it goes away or they come out and assess from the curb or snoop around while you're not there. Not much you can do about that one...