Tag: Investing

The Art & Science of Pricing A Home

Posted on by Kat Gilpatrick

Determining what the market will pay for your home

Coming up with the right price to list your home is daunting.

 

  • It’s not a fixed number, or what we might expect to get for it – it’s not the number we need to make to break even on renovations or to what you need to buy our next home.
  • It’s not what a neighbor got for hers last week or last year, it’s not what one of the property listing sites estimates you could fetch.
  • It’s not the appraisal value of your home, either, which is a doozy to digest – and why wouldn’t it be?

 

If our homes are so unique — and we’ve put so much great care, time and investment into improvements, etc. why can’t we ask for the number that represents that?

I mean, you CAN — you can end up pricing your home however you like, at the end of the day. It is the homeowner’s choice —  but, if the end goal is to sell your home, with the expectation that someone will pay X amount for it, and in a reasonable amount of time — this often falls into the strategy philosophy camp I like to refer to art and science.

The science is data – what’s for sale right now that compares to your property? What similar homes have sold in the last 3, 6, 12 months in your area? What is that average price per square foot? And then comes the delicate science — and math of finessing the numbers to reflect the more unique or bespoke characteristics of the home. Sauna? Tennis court? Flag lot? Oh, the considerations and calculations!

The art bit is understanding people – the buyer — where the market is at, and what is the tolerance for price range where you are, at this exact moment? Where are the interest rates? What are people buying? Is it a condo? How many days on the market in that zip code have similar properties taken to sell? Is your style of home super popular right now? That neighborhood is so hot homes sell in less than a week? That’s data, too, of course, but it’s truly understanding that mindset, that appetite that is the real finish work when it comes to determining the price at which to sell your home. The additional artistry is understanding your priorities when selling? Have to have it sold quickly? Don’t care how long it takes you want the right buyer who’s willing to pay your price?

Of course all of these things factor in. It’s touches on the emotional, the financial, the very core of our fears and that which is most important to us. That’s why it’s so incredibly nerve-racking thinking you’ve either left money on the table or you’ve aimed too high and over-reached, possibly having to consider a price adjustment or pulling it from the market until a different time or after having done some value-add improvements.

 

It’s a tough conversation at times. Often, I’ve found, through the art & science method, you can determine a range: factoring all of these elements in, that provides something that everyone can tolerate — and possibly, very possibly, find very satisfying on closing day.

 

Just Sold! Yearning on Yamhill!

Posted on by Living Room Realty

In a true testament to the fast paced market we’re seeing in Portland right now, I’m so excited to say my client’s condo was listed and sold in under a month! It’s located in SE Portland, close to Downtown. The Buckman Neighborhood is full of lovely cafes, restaurants, and shops.Open and full of light, this condo boasts an efficient and well designed contemporary floor-plan. My clients loved their back patio as a place to relax. Now the new owners can enjoy the budding days of Spring from there. Congratulations to my clients on their sale! We blinked and it was over, but I’ve been so happy to work with you. Best of luck on the next chapter!

My client, Tasa’s home remodel

Posted on by Bobby Curtis

In 2018, Tasa, reached out to me because she wanted to flip a house. I didn’t know it would lead to this, but since then, we have spent many hours talking about house remodeling, key improvements, and how to ensure a profitable investment. Just finishing up her third successful home remodel, I wanted to share some of her work with Kara Mack on Afternoon Live. Below are a few before and after photos. For the full 8 minute segment, and more of the work she did to the house, check out the link below.

My Client, Tasa’s, Third House Flip

Multifamily Houses in Portland

Posted on by Bobby Curtis

Today I talked with Kara from Afternoon Live about multifamily houses in Portland. To see the full 7 minute video, click here

Multifamily Duplex In Portland

Here’s an example of a duplex that was for sale in Portland that I thought was a great long term investment.

  • 1950s side by side 2 BR/1 BA multifamily (duplex) with Tuck-under garages.
  • It was already vacant and in extreme disrepair when we bought it.
  • NE Portland- Alberta Arts area. 
  • Current 2 Bedroom rentals are roughly $1600-$2200
  • Current 3 Bedroom rentals are roughly $2500-$3000/month. 
  • We decided to finish the lower level, adding additional bath, bedroom, and bonus living space. Each unit will now be 3 BR/ 2 BA.
    • Better use of space (more people can live in the property)
    • By adding this additional finished space, it will bring in more rental income to cover the cost of the renovation work 
    • That extra monthly income will pay for the additional renovation work over 8-10 years.
  • By updating everything, there will be few if any large maintenance expenses within the first 7 years. This makes profit and loss a little more predictable.

Not in the buying market or interested in multifamily, but thinking of selling your home? Check out my tips here. 

 

Investing in Dreams: A North Portland Love Story

Posted on by Living Room Realty

Hi Readers!

Today’s story is one that’s from North Portland, and involves my longtime friends and savvy investors Tim and Elizabeth. 15 years ago, they were getting ready to move back to Portland from San Francisco. They knew then that Kenton is a terrific community to raise a family, and that investing in that area would pay off in the long run. They purchased a “skinny” home, new construction, and planned to live in it for a while, then leverage the property as a rental as their family grew.

That’s exactly how their plan played out…

They called it home while they needed it, and then the house was able to generate enough income as a rental to enable them to build a real estate portfolio. Smart. Investing in Real Estate, even in the time of COVID, is a good idea. Homes continue to hold appreciated value in the greater Portland area. HERE is a good visual you can reference to get an understanding. If you’re curious to learn more, please reach out, I can help explain the numbers.

When Tim and Elizabeth were ready to sell, we knew we had to lean into great staging, photography, and online resources to make it easy for people to get a feel for the home. Check! Three days later, they were pending, after reviewing multiple offers.

Here’s where the love story comes in. See, for Tim and Elizabeth, it wasn’t just about the highest offer for the home they were selling. They took the time to read every buyer’s letter who submitted one, and ended up deciding to go with a buyer whose story reminded them a little of themselves. They were early in their relationship. Loved North Portland. Active in their communities. Wanted to start a family. Had a dog. Why do I bring this up? Because as a buyer you should know that a seller’s motivation – even in this market – isn’t always going to be about dollar signs. Take the opportunity to leverage your story. Explain your why. And if you need help crafting that… I would be happy to put my  journalist hat back on to help you tell it in a way that will resonate and get your offer accepted.

Til then, high fives,

Flipping a Duplex

Posted on by Bobby Curtis

While I haven’t restored a multifamily property before, I have remodeled plenty of single family houses. So, I figure it might be similar, just times two. I am just beginning this one. Right now, these side by side units mirror each other with one bedroom and a bath on the main floor, and another bedroom upstairs. The basement is a blank canvas, unfinished, and on the dingy side.

My plan is to add a bathroom upstairs to create a nice master suite, as well as an additional bedroom, laundry and family room in the basement. The two units will still mirror each other, but I don’t know…maybe we’ll change up the finishes on each side. Updates to come as we move along.

Living and Dining Rooms

 

ADU. Is It For You?

Posted on by Bobby Curtis

Bobby Curtis was back on KATU’s Afternoon Live to discuss adding Accessory Dwelling Units (ADU’s) or fully functional separate living spaces to your current property. It’s pretty hot in Portland right now, but is it for you? Click to watch the short interview here Or skip right to the highlights below.

What need does an ADU fulfill?

1. More housing in Portland.
2. Extra income for the home owner to help pay mortgage.
3. Multi-generational living on one property

Quick facts

1. Cost: $125k-$250k with permits, materials, labor, and utilities.
2. Going rents for new ADU’s are $1000-$1500/mo
3. They can be separate units- all new construction, converting an existing structure like a garage or even a basement.

Check with your city inspectors about ADU requirements

1. To see what type of permit is required if you want to use it as a short term rental
2. There are parameters ADU’s must meet – Example in Portland it can be no bigger than 800 SF or 75% of the SF of the primary house.

Things to consider with additional dwelling units on your property

1. New tax scenario for your property
2. Whether having tenants, short term or long term will work for you
3. Losing yard space or basement

The Art of the ARV

Posted on by Kim Parmon

You’re looking at buying a house to flip.  You find one that looks like a great deal.  How can you be sure?  Checking ARV is a key step.  After Repair Value, or ARV, is a phrase that flippers throw around a lot.  So what does it really mean?

Put in the simplest possible terms: ARV is someone’s best guess at what a house will be worth when it’s pretty again.  “Pretty” is a pretty general term here.  Maybe it doesn’t need to be beautified as much as it needs to be made more functional.  Maybe there needs to be a bathroom added, or the tiny kitchen needs to be expanded.  It could be that the head height on the staircase is the big issue here preventing the house from being worth it’s maximum value.  Whatever it is, step one in investing is to formulate your plan to fix the property you’re looking at.

Once you have your plan in place it’s time to determine your ARV.  Maybe you’re taking a dated two bed, one bath bungalow and expanding into the unfinished attic space.  The attic will become a beautiful master suite.  So when you look at comparable sales in the neighborhood you aren’t looking at two bed, one bath homes.  You’re looking at beautifully updated three bed, two bath homes.  What did those sell for?  That’s your ARV.

I will say, there’s a bit of an art to this type of comping.  It’s not nearly as straightforward as comparing a finished home to the surrounding sales in the current market.  What happens if the market changes?  What happens if the repairs done don’t match the comps?  An ARV is really an educated guess about the possible value of a house.

There are a lot of intangibles to this!  Check to make sure the streets are similar.  Are the trees on your street as pretty?  Is the view as good?  Can a dog run around in the backyard or is it all hillside?  Can you have a great dinner party in the dining room or does it only fit a four person table?  Is the master closet going to fit all of those hats?  Put yourself in the shoes of your buyer.  Will they be as happy with your product as they would be with that comparable sale?  If the answer is no you’ll want to reduce your ARV to compensate.

One of the biggest mistakes I see flippers make is assuming an ARV that’s too high.  It’s great to have a positive outlook but protect yourself by investing wisely and making sure your ARV is right on the money!

Happy flipping!

My Favorite Murderino!

Posted on by Living Room Realty

My Favorite Murderino!

It was a day like any other; commute to work, do the work things, and post work gym session.  What Tamra didn’t know was what was lurking for her around the corner.

She grew up in a wholesome family, surrounded by love and the common trials and tribulations of a young woman.  Working her way into a solid career path with a well known ‘swoosh’ company, she was happy and feeling quite fulfilled.

On this particular day, Tamra received a chilling phone call from a family member.  It was her brother, and he needed her to meet with him immediately.  He’d known for awhile something wasn’t quite right in Tamra’s life.  She’d mentioned that being a life long renter had created an empty hole in her heart.  She’d grown more weary in recent years and wasn’t sure how much more of the Portland commute she could bear.

I became involved right away since this crucial life decision needed professional (free) representation.  Tamra and I toured the property and discussed all the likely suspects that could come up during inspections.  It was later, on inspection day, that I was made aware that she too, is a murderino!

After much negotiation, and long hours worked to compile all the data, appraisal report, and timelines, this home was hers!

Although not a murder house, or any suspect for a creepy seeded history, this home will be filled with many memories and stories to share.  The only crime here was being guilty of making a great investment.  If that’s a crime, this murderino is expected to be a repeat offender.

As always, SSDGM, and also, to heck with crazy work commutes!

 

Congratulations to my favorite murderino and new home owner!

 

503-840-2842

If you’d like help buying, selling, or small space planning, I’d love to be a part of your team too!

Investor Special in Overlook!

Posted on by Julia Robertson

Just Listed!

 

1915-1917 N Webster Road

Portland, OR, 97217

 

 

Investor special in Overlook!

 

Beautiful Old PDX style duplex with character and updates.

2 Units, Perched above the road with SW views from large second floor windows, hardwood floors, storage, yard, spacious basement with storage rooms, updated electrical panel, attached 2 car garage, large covered porch.

Do not disturb tenants.

 

ONLINE TOUR

 

 

4 BED | 2 BATH

3,040 sqft

Offered Price $ 509,000

 

 

 

Thinking about selling? Find out what your home is worth at realestatebyjuliarobertson.com

Julia Robertson | Living Room Realty

Broker Licensed in Oregon & Washington

541-505-1111 | julia@rebyjulia.com

Basics for Beginners in Real Estate Investing!

Posted on by Melissa Dorman

 

So many people wish they could be wealthy. Far fewer ever take any steps towards that aim. Real estate can be an excellent avenue towards building wealth. Speaking of wealth, check out this Klear Picture foreigners tax for an idea. It’s the “Get Rich Slow” game plan. As an investor the past few years, I can attest it takes hard work, lots of preparation and ongoing diligence to do well in real estate.

Till some time back, investing in real estate was considered difficult to access and to afford by most people.

But now the trend has started to change and people are more open to try various new avenues of investment including real estate.

Funding your real estate investments have only grown more diverse over time; people are not just using their own savings to buy homes, but they have started to look for other options like private equity funds, or even investing passively through a REIT(Real Estate Investment Trust).

 

Benefits of Real Estate Investing…

Real estate investment has turned out to be both a lucrative and a reliable way to generate substantial returns.

When approached correctly, real estate can create a consistent income stream for your future, through rental income.

It also provides your portfolio with such valuable and unique benefits like tax advantages, portfolio diversification and appreciation potential.

Basics of Real Estate Investing:

But for a beginner, the investment in real estate can be both doubt filled and intimidating. But by understanding and following some basic concepts and strategy, one can gain the confidence to start investing. These are some of the basic ideas that most successful real estate investors practice but the concept in not limited to these points alone.

 

These basics points to keep in mind before investing:

 

1) Make a Plan:  

Like any other investment, real estate investments require a great degree of planning.

The beginner in real estate investing must approach the planning process as a serious activity. Think of it like going back to school for a degree. You must establish both short term and long-term goals for your wealth building.

Get clear on your various decisions like the type of home, preferred location, source of funding, term of investment, expected returns etc.

Only by proper planning can you make these decisions and implement them practically.

A proper plan allows investors to visualize the big picture. Visualization will help you maintain focus on the goals rather than on dwindling on minor setbacks (and they will happen).

Real estate investing can be both complicated and demanding, and a solid plan can keep you organized and focused on your big future goals.

 

2)Determination and Strong will

Deciding to invest in real estate is not something to do impulsively. It should neither be chosen merely because a neighbor has earned a small fortune from it, nor because it is the talk of the town.

It should be chosen only if you are really interested in this avenue. Moreover investing in real estate is a life long pursuit, and not a get-rich quick scheme.

As an investor, you may have to face many difficulties; you may need to learn things the hard way. You will make mistakes. You have to devote time; you will have to make many sacrifices; and you may even fail.

The successful investors are the ones who can take those experiences and turn them into lessons to improve their skills.

If you do not have a strong determination, even small losses feel like big failures. You don’t need to be an expert in real estate investing but your persistence is crucial. Celebrate those small victories and let them fuel your momentum.

 

3)Continuous Education and constant up gradation :

Like in any other business, one has to learn many things before starting to invest.

Apart from the investment basics, you must also be up to date with the laws, regulations, terminology and the latest trends in the real estate market.

Investors who are not up to date may make big mistakes. They may miss the correct timings of investing or end up investing in the wrong property.  They may even have to face legal cases if laws are ignored or broken.

Successful real estate investors stay educated and adapt to any regulatory changes or economic trends.

You DO need to get proper education and do your Homework in this field. Surround yourself with experts and a community that keeps up to date on these matters.

 

4)Know the Market:

The market is a crucial part of the education and homework process. A beginner in real estate investing should acquire an adequate knowledge of their selected market. Pick a neighborhood and study what sells, the average home square feet, what homeowners and renters like and are willing to pay a premium for.

Knowing these details help you to predict and plan for the future. This enables you to predict when trends may change; thereby creating potential opportunities to benefit from those upcoming changes.

Once a particular market is mastered, the investor can move on to additional areas using the same in-depth approach. Don’t try to learn everything at once. Learn one way of investing really well and advance from there.

 

5)Identifying the Risks:

For other investment avenues like stocks or mutual funds, investors are advised with warnings regarding the potential risks involved in investing.

But in the real estate market, there are no awareness campaigns to educate and caution beginner real estate investors.

One can easily be misled by the sugar coated stories from those who are fraudulent. They (looking for easy targets) will lure you into believing that it is easy to make money in real estate.

But a knowledgeable real estate investors understand the risks. The risk can be both in terms of fraudulent real estate deals and also of any legal implications involved.

So they adjust their investments and dealings in such a way to reduce those risks. Vet anyone who asks you to give them money for education. How many deals are they doing? Who has used their program before? What was their result? Paying for education does not guarantee results, even though it feels like progress writing a big check to someone who is charming.

 

6) Great rewards demands great sacrifices:

What is your financial goal? How high is your dream? How bad do you want financial freedom?

If you want to use real estate investing to start living your dream life you have to sacrifice many things. Sacrifice may be in terms of many small enjoyments and privileges, to have a long term success in future.

You may need to forgo a vacation and use the money toward a down payment instead.

You may need to learn how to use a paint brush and do your own work.

Investing in real estate is the most rewarding thing you ever make but it will not always be easy.

Even after sacrifices it may happen that some of your dealings may not be as rewarding as expected. Change in customer buying patterns or implementation of new law may change your results

Expect several years of hard sacrifice in terms of time, money, privileges etc to get financially free and live your dream life.

As mentioned earlier, real estate investing is not a get quick rich scheme. It is a result of long years of persistent efforts and continuous education.

7) Building a strong network and team:

There is a famous saying in business “Your network equals your net worth”. This itself is enough to show the importance of Networking.

A network can provide important support and create opportunities for both new and experienced real estate investors.

A good network may comprise of business partners, clients, mentors or guides. This group can also consist of the best of real estate investors, in this way they will be both a challenge and support.

Those beginners in Real estate investing who are planning to have a long term presence must first establish the right team before they start their real estate endeavors.

Importance of team:

You may learn many things related to financing, law etc but ultimately you would want experts with real experience in your circle of influence.

There is always going to be someone that you have trusted to do a job. Don’t try to learn it all.

The task of building a strong network and team will help a new investor go a long way.

 

Who should be in your ideal team and network?

  • A real estate agent
  • A property manager
  • A contractor or construction crew
  • Maintenance people
  • A good attorney
  • An accountant
  • A title company

 

One can also join local real estate associations; there one can find many people from related field. New investors may think it will not be feasible and costly to have the team of experts. But if they plan to have a long term and fruitful reward, having dedicated team can never be dismissed.

 

Conclusion

By proper planning along with strong determination, an investor can have a clear focus. Proper education and market study, helps make real estate investing more profitable.

Having a strong network and proper team are crucial steps to have rewarding real estate investing journey.

It may be simple task to earn short term profit, but developing a long-term real estate investing business requires skills, and efforts.

 

 

Melissa Dorman is a Licensed Broker with Yascha Group at Living Room Realty in Portland, OR. Follow Yascha Group  on Facebook.