00:00:06:23 - 00:00:24:20
Joe
Welcome to off the record Talking real estate with Joe and Makayla. If you're interested in the Portland, Oregon real estate market and want the unvarnished inside scoop, you've come to the right place. Thanks for giving us all this. Okay. Welcome to the show, everyone. Hi, Makayla. How are you?
00:00:24:21 - 00:00:28:22
Makayla
I'm so good. I'm having a little bit of your Nespresso coffee.
00:00:28:22 - 00:00:33:03
Joe
I feel like we should be getting some royalties for them as much as we've been talking about them lately.
00:00:33:04 - 00:00:39:05
Makayla
Yeah, no kidding. And I'm at the end of my cup and I'm getting a little excited about this episode.
00:00:39:05 - 00:00:45:20
Joe
I know you are. Good Lord, I have not heard you this. Fired up about a podcast episode in a long time.
00:00:45:22 - 00:00:46:19
Makayla
I think it'll be good.
00:00:46:20 - 00:01:01:23
Joe
I do too. I was just looking over the notes and it's a really cool topic that I think a lot of people are super interested to hear about, and it's one where there hasn't been opportunity for years now and all of a sudden, boom, it's right out there and I feel like no one knows about it.
00:01:02:00 - 00:01:19:07
Makayla
Yeah, there was some new policy changes that kind of sparked my interest in this again. And when I actually dove into it within the last couple of days, I realized that there's a lot of opportunity there and I think it's getting overlooked. So I'm really excited. But yeah, we're going to be talking about investing in multifamily properties today.
00:01:19:08 - 00:01:38:17
Makayla
I'm excited about it, I think. Well, you know, when I first got interested in real estate in college, I got hooked on this podcast, which is weirdly full circle, but I got hooked on this podcast that was just pounding it into your brain that you need to buy a multifamily property and live in it. Yeah, and so many people got hooked on this podcast.
00:01:38:17 - 00:01:56:00
Makayla
A lot of my friends and family did just the idea of being able to even just buy a duplex and live in one side, rent out the other, and being able to offset your mortgage. And it seems really easy when people just lay it out like that. But at least a year ago, or even two years ago when I was trying to do it, it wasn't that easy.
00:01:56:00 - 00:02:07:20
Makayla
There just weren't a lot of opportunities. The properties that did have decent renters in there needed a lot of work and I was didn't have the money or cash to go in there and give it a whole new roof.
00:02:07:20 - 00:02:10:09
Joe
All of the get rich in real estate pods and well back before podcasts, the CDs and the stuff you'd see on late night television was all about getting in and having other people help you with the mortgage and then flipping it in a couple of years and reinvesting in all that. And that's great and that works. And a bunch of people made money on that for years and years and years.
00:02:29:03 - 00:02:32:05
Joe
But for the past two or three years, there's just been no inventory.
00:02:32:05 - 00:02:40:05
Makayla
Right, for whatever reason, which is weird because it's been a seller's market, it's a great opportunity for anyone to sell.
00:02:40:07 - 00:02:42:02
Joe
So they're like, Why am I going to sell?
00:02:42:03 - 00:03:03:16
Makayla
That's true. Good point. Yeah. Yeah. I think a lot of the media and podcasts around that are very deceiving. They're like, they say that it's possible. And then when I would go hunt for them all, I would be finding was maybe five $400,000 duplex that just I couldn't live in. I didn't want to live in it. So why would I be telling my clients to go seize this opportunity when I'm not even seeing that it's out there?
00:03:04:15 - 00:03:17:00
Makayla
I was really excited. I went through a ton of listings today to see if it was a possibility, to see if I would legitimately send this to a client and recommend changing their lifestyle and making this happen for themselves. And I found some.
00:03:17:00 - 00:03:21:12
Joe
I am so proud of you. They look at you doing your podcast homework.
00:03:21:12 - 00:03:22:13
Makayla
Every once in a while.
00:03:22:16 - 00:03:29:17
Joe
Look at that, everyone. I am so proud of you. You dug in deep on this one.
00:03:29:17 - 00:03:31:07
Makayla
Thank you.
00:03:31:09 - 00:03:49:13
Joe
That's great. Well, good job and thank you. So, yeah, I'm excited to hear that there's actually nice usable properties out there. Yeah, because I agree. I see for the longest time there was nothing available. And then when there was a couple, it was like, holy smokes. They went, How much for that? And it would never pass any type of financing appraisal.
00:03:49:15 - 00:03:52:00
Makayla
Exactly. And it's like cash only in.
00:03:52:00 - 00:03:54:21
Joe
Cash only because we have to.
00:03:54:23 - 00:03:56:00
Makayla
Find another option.
00:03:56:03 - 00:04:01:02
Joe
No one will finance this, but it's great for you. You should invest. Yeah. And live in it.
00:04:01:02 - 00:04:11:04
Makayla
Right? Or it's like a triplex. They market it as a triplex and then it's like nephew's been living in the mother in law suite for ten years and he pays $400 and.
00:04:11:04 - 00:04:14:10
Joe
There's 400 up real market though you could get $900.
00:04:14:12 - 00:04:24:03
Makayla
Like you find does in the place because he's been smoking doobies in there for a decade anyways that wasn't that sounds very specific but it's not and.
00:04:24:03 - 00:04:36:15
Joe
I just know I was going to ask Wow. Okay. Yeah. No, I get it And it's it's been one of those elusive things for years and years and years. So who might benefit from purchasing? I mean, who, who is going to who's the ideal?
00:04:36:15 - 00:04:55:08
Makayla
Yeah. So I think for first time homebuyers with the new policy change that I'm so excited to tell you guys about, it's a really great opportunity because we wouldn't have said that before. Mm hmm. Usually it's not a great opportunity for first time homebuyers, new or seasoned investors. I think multifamily is always the way to go if you can get into a good opportunity.
00:04:55:08 - 00:04:59:11
Makayla
And then also anyone in need of a home that supports generational living.
00:04:59:11 - 00:05:02:15
Joe
so incredibly high profile right now.
00:05:02:20 - 00:05:08:07
Makayla
The past couple of years, it's just been a lifestyle change for a lot of people.
00:05:08:07 - 00:05:31:13
Joe
And I think it's ever since COVID. Yeah, you know, around the world though, that's how people have lived for generations, hundreds of years is supporting their family. And I think it's kind of cool that it's finally come to the United States where it's like, Oh, that's cool. Yeah, you want to take care of your parents or, you know, you have children that are coming back in and you want them to live with you and and I just I think it's a healthy thing for our society.
00:05:31:13 - 00:05:48:11
Makayla
Yeah. It makes a lot more sense than living in three different houses. And then, you know, when somebody needs help. But it's such can be such a burden. But if they're right next door makes it a lot easier. So yeah, we've had a lot of clients that are on the hunt for multi-generational properties and they think multifamily properties specifically.
00:05:48:11 - 00:05:59:18
Makayla
It would be really nice to have that separation if you do want it, but you still want to be close in proximity. So you might have seen on the news and all of our tiktok, I'm advised tiktoker.
00:05:59:20 - 00:06:02:23
Joe
I get all my attention increases from you. You're aware of this. You should.
00:06:02:23 - 00:06:03:19
Makayla
It's kind of my job.
00:06:03:20 - 00:06:04:13
Joe
So what have you seen?
00:06:04:17 - 00:06:26:05
Makayla
Well, like a couple weeks ago, all I saw were lenders on TikTok. Breaking news Fannie Mae is now doing 5% down, multigenerational housing loans. So which is great and exciting. And I didn't look too much into it. But today I called our one of our trusted mortgage brokers, Todd Gydesen of a Vintage Mortgage.
00:06:26:05 - 00:06:26:23
Joe
How was Todd?
00:06:27:01 - 00:06:28:00
Makayla
So good.
00:06:28:02 - 00:06:28:19
Joe
I love that guy.
00:06:28:19 - 00:06:40:19
Makayla
So sweet. Yeah. But I just wanted him to give me the scoop because I was like, Hey, I've only seen this. Who knows what is actually going on? And he let me know that it won't be happening until November 18th.
00:06:40:19 - 00:06:41:03
Joe
A month.Away.
00:06:41:06 - 00:07:00:12
Makayla
There's nothing solid for it yet. But he also mentioned that a lot of lenders are already able to lend only with 5% down on those loans, even though it hasn't actually happened yet. He said. Since they're predicting it, they can do that, which is kind of rare, he said. But really exciting. So if you're thinking about getting into it, yeah, not that far away.
00:07:00:12 - 00:07:00:18
Makayla
I mean.
00:07:00:18 - 00:07:04:16
Joe
Is it duplexes or is it Triplexes four plex is also.
00:07:04:18 - 00:07:25:03
Makayla
Triplexes and four plex is also, which is crazy because Todd told me that historically it took 15 to 25% to get into one of those. Yeah. Which makes sense. But yeah, this is a huge shift and there's a lot of different opportunities. They're also going to be increasing loan amounts, which I won't speak too much on because that's.
00:07:25:03 - 00:07:25:15
Joe
A different pod.
00:07:25:19 - 00:07:35:20
Makayla
I'm not a lender. I'm not that's not my scope of biz. But we also want to know what that'll look like until November. So good time to prepare, a good time to be thinking about it. If you are interested.
00:07:35:21 - 00:08:00:20
Joe
And be sure to visit LivPortland.com for more information. We'll have some resources there. Different information. We should probably put a couple of our lenders Todd and and Mindy over on the page so that people can if they're if they have interest, they don't have a trusted lender, they can reach out to them because really, they're the ones that you would want to talk to about this first to just see if it's a program that works for you, man, Only 5%.
00:08:00:20 - 00:08:05:02
Joe
And they're raising the loan limits. That's going to be a really cool opportunity.
00:08:05:02 - 00:08:17:05
Makayla
Yeah. And they're already I believe I don't want to speak to it specifically, but they're already at 750. You know, there's room to work there. Yeah, there's a lot of opportunity in that under that price range. Well, under that price range.
00:08:17:05 - 00:08:22:23
Joe
I wonder if this is going to spur more multifamily new construction.
00:08:23:01 - 00:08:24:13
Makayla
Oh, interesting. It should.
00:08:24:13 - 00:08:41:20
Joe
Yeah. I don't know. That dynamic from a builder developer perspective if it is profitable. Yeah, because they're going to go with top dollar on any piece of land, but I feel like that could be a good opportunity. Yeah. Yeah. Might be interesting for us to go have a conversation with some of our folks about that.
00:08:41:22 - 00:08:44:10
Makayla
We're thinking this in real time, You guys, we will get back.
00:08:44:10 - 00:08:45:19
Joe
Sorry, guys.
00:08:45:21 - 00:08:47:06
Makayla
Well.
00:08:47:08 - 00:08:49:21
Joe
Everybody has to tune in to the next show.
00:08:49:21 - 00:08:50:23
Makayla
Part two, maybe.
00:08:50:23 - 00:08:51:12
Joe
Right?
00:08:51:12 - 00:09:03:15
Makayla
So we have so much to share. But yeah, with that 5% down, well, like Joe said, we'll put Todd's information on our website, and Todd has this awesome tool and it's a live rate tracker,
00:09:03:15 - 00:09:04:12
Joe
I looked at that today.
00:09:04:13 - 00:09:10:16
Makayla
And you plug in the purchase price, your credit score down payment and a couple of other things.
00:09:10:16 - 00:09:18:12
Joe
That are and there's ranges, you know, like credit score, you can give a range. You don't have to plug in exactly what it is or know that off the top of your head. Zip code, I think is one of them.
00:09:18:12 - 00:09:28:04
Makayla
zip code that you're interested in. And it'll give you a bunch of different breakdowns of what your monthly payment options can be. And right now, with the current interest rates, that looks a little scary.
00:09:28:09 - 00:09:30:15
Joe
It can, yeah, depending on your down payment.
00:09:30:18 - 00:09:57:10
Makayla
Right. But you know, I was plugging in 5% down and then what I was doing was finding properties that kind of breaking it down and thinking like, Oh, I think this unit could get $2200 on one side. And then subtracting that from what the mortgage would be. And it was really realistic. You know, for the first time in a while, I've seen opportunities for people with a lower down payment being 5% able to afford a mortgage, which was really refreshing.
00:09:57:10 - 00:10:04:00
Joe
So. So it actually pencils out. Yeah, that's really cool. That's exciting. Yeah. So there are some requirements to this, right?
00:10:04:02 - 00:10:11:09
Makayla
Yes, that's what I like about our podcast theme is that we call it off the record and you get the unvarnished inside scoop.
00:10:11:13 - 00:10:15:08
Joe
You're going to get the inside scoop, the whole truth and nothing but the truth.
00:10:15:08 - 00:10:16:15
Makayla
Well, it was very.
00:10:16:17 - 00:10:21:21
Joe
Did I spoil that? You know, I'm all that. I stole your thunder there for a second.
00:10:21:23 - 00:10:42:20
Makayla
I just I think it's important to not candy coat things because otherwise, what is the point of you getting information from us? But anyway, so the small catch with this is buying a multifamily property. You have to live in it for two years. You can't just buy this property and completely rent it out
00:10:42:20 - 00:10:46:23
Makayla
For most, that's probably what they want to do anyways. You know, you're looking to buy a home to live in.
00:10:47:00 - 00:10:59:17
Joe
That is if you're buying it as an owner occupied, right? So if you buy it as an owner, occupied, you can't get that owner occupied financing and then move in for a month and then say, See, you write and rent the whole thing out. That's what we're talking about. Okay. Okay.
00:10:59:22 - 00:11:16:06
Makayla
Thank you for clarifying that. Yeah, that's what we're talking about with this 5% down option. You know, if you were interested in making this an investment, obviously you can completely rent it out from the get go, but you're also probably going to have to put a lot more down to get into the property. That makes sense.
00:11:16:10 - 00:11:16:18
Joe
Yeah.
00:11:16:19 - 00:11:37:20
Makayla
Okay. Yeah. Okay, good. So the game is you live in it for two years, three years, however long, it has to be a minimum of two years that you're living in the property. Maybe that scares you off a little bit, but the good part about it is if you think maybe this is a 2 to 5 year space for you, you can it's going to be much easier for you to attain that next move up property.
00:11:37:20 - 00:11:44:18
Makayla
And assuming that equity goes up year over year, which it always does. Right. And I can safely say that.
00:11:45:00 - 00:11:52:11
Joe
Over 3 to 5 year span. Yeah, yeah. If you're going to be in there a couple of years, more than likely it's, it's going to go up. Right.
00:11:52:13 - 00:12:07:08
Makayla
Okay. So I didn't want to just throw that out there, but you can pull money out of the house in order to get into your next one. So you let you know, give it some time for your equity to grow. Then you can pull some of that out and use it as a down payment for your next property.
00:12:07:08 - 00:12:20:21
Makayla
So I think people get married to the idea of I'm going to live in a duplex or a triplex for 30 years and that's not necessarily the case. And yeah, if you were interested in selling the whole property, you'd probably do really dang well with it. After just a few years.
00:12:20:21 - 00:12:43:22
Joe
Yeah, absolutely. Yeah. This is one of those situations where you really want to have that conversation with your mortgage broker to find out the particulars of, Hey, this is what my plan is. How does that jive with the program? What does it mean as far as limitations or when I go to sell it? Are there limits are not When I go to sell it, but when if I want to pull money out, how much do I have to leave in there?
00:12:43:22 - 00:12:52:01
Joe
All those type of things. You want to get that upfront and have an understanding so that it works hand in hand with your plan, with what you have.
00:12:52:03 - 00:13:10:19
Makayla
Right? Yeah, good info. So then I started to look at the current inventory that we have in Portland Metro as we stand today, because again, I've been told that this is possible, but there's usually not a lot of properties that I'm interested in even living in. So I wanted to make sure that this was an opportunity.
00:13:10:21 - 00:13:12:11
Makayla
It was good for my client, so.
00:13:12:11 - 00:13:14:06
Joe
Let's not pitch it if there's nothing to buy.
00:13:14:06 - 00:13:38:01
Makayla
Exactly. Yeah. I looked at the whole Portland metro, which I consider to be anywhere from Gresham over on the east side of Portland, up to North Portland, and then as far west as Forest Grove. So pretty big area. And I set the limits to at least two plus units and then nothing higher than $750,000. And I got 81 hits.
00:13:38:01 - 00:13:40:12
Joe
Woo! Wow. Yeah, that's amazing.
00:13:40:12 - 00:13:42:03
Makayla
I was really excited about that.
00:13:42:09 - 00:13:42:19
Joe
That’s great.
00:13:42:19 - 00:14:01:19
Makayla
And 11 of those were in Washington County. 58 of them are in Multnomah County and then 12 are in Clackamas County. So a lot of opportunities around. And I actually pulled a couple of properties and looked at their financials again, just to make sure that this is a good option or could be a good option for someone.
00:14:01:19 - 00:14:21:17
Makayla
But I found a couple beautiful properties which we are just chatting about, but one in Beaverton, for example, It's listed at $655,000. It's two units. One of them is 1200 square feet and one of them is 1700 square feet. One side rents for $2200 a month and the other side rents for $2000 a month.
00:14:21:17 - 00:14:29:11
Joe
So and I think that was the one that had a family member as one of the tenants. So that market, that rental amount might be low.
00:14:29:13 - 00:14:30:08
Makayla
That's true.
00:14:30:10 - 00:14:32:03
Joe
Yeah. I think I said it in the remarks.
00:14:32:05 - 00:14:53:02
Makayla
Yeah. And yeah. So if you're able to get $2200 and rent paid, which is aiding in your mortgage, I think that's a game changer. And these are both three bed, two baths. Again, a beautiful property in a nice neighborhood but on the market 12 days so there is opportunity out there. And then I found one in North Portland over on North Mississippi, which I was shocked.
00:14:53:02 - 00:14:58:10
Makayla
It's been on the market as long as it has because this is such an exciting, beautiful neighborhood.
00:14:58:10 - 00:15:05:08
Joe
Yeah, that's a that's a really cool area, walking distance to so many great restaurants from this property.
00:15:05:08 - 00:15:25:16
Makayla
This one as it sets rents really, really well. But I think that they could probably get a little more rent out of it than they are. It's listed at $699,000 and it has three units. One's a one bedroom and the other two are two bedrooms. The rents range from $900 to $1100. Even if you want to live in the nicest unit, you can still get around $2000 a month.
00:15:25:16 - 00:15:40:19
Joe
That's great. That really is a game changer, right? Yeah, for affordability and that area I would just be shocked to think that wouldn't appreciate extremely well it's been on the market 130 days or more you might be getting a pretty good deal on that certainly below list.
00:15:40:19 - 00:15:59:11
Makayla
Yeah absolutely. So I think that's the last kind of little nugget we'll leave you with is you should definitely refer to our last episode. We talk about the home buyer update, and I think that directly applies to obviously buyers who are looking to be in multifamily. But there are a lot of opportunities out there for buyers right now.
00:15:59:16 - 00:16:26:20
Makayla
And like you said, there's some of these great properties that are sitting on the market a little longer than the sellers are probably comfortable with. Yeah, meaning that there's opportunity for you to offer less or ask the seller to help you buy down the interest rate, which can be as much as $10,000 to $15000. But if a seller is really motivated to get a deal done permanently buying them, the interest rate for you is something that they would more than likely consider.
00:16:27:00 - 00:16:53:18
Joe
Yeah, there's a lot of different situations out there where over the past 30 or 45 days or more, sellers have made the mistake of pricing their homes when it first went on the market in the old marketplace. Right. Where they thought, oh, things are moving fast and we're going to try this price out. And that really in this marketplace right now backfires, because when you do that, that's just not our marketplace that we have anymore.
00:16:53:18 - 00:17:24:19
Joe
You really have to price it on the razor's edge and price competitively. Otherwise, you're above the market. You stay on the market too long, you have to lower the price. People are going to see that you've been on for a long, long time. So even at a competitive price, you're probably not going to get that price either. So there's a lot of good opportunities that are out there and getting your closing cost paid for or getting your rate bought down or both are scenarios that we're seeing quite a bit right now are good opportunities.
00:17:24:19 - 00:17:44:22
Makayla
Yeah, exciting stuff. So if you have any questions about this process, I would definitely recommend reaching out to us or your trusted mortgage broker or both. But if this is something you might consider, I think it's at least worth looking into. Even if you're not fully ready, keep an eye out for what's out there, because it doesn't take much for us to look into these properties like I just did.
00:17:44:22 - 00:17:46:15
Makayla
And there's a lot out there. So yeah.
00:17:46:17 - 00:18:06:15
Joe
And like we always say, it doesn't cost anything and it doesn't hurt your credit report to go investigate exactly what you would qualify for and what that looks like. Have that conversation just to figure out where you're at and if that's an option for you and if it works in your current lifestyle and what you're what you're trying to accomplish because you never know until you until you have that conversation, right?
00:18:06:15 - 00:18:07:17
Makayla
Yeah, exactly.
00:18:07:18 - 00:18:12:06
Joe
All right. Well, that was fun. Oh, wow. That was a lot of great information. Makayla, thank you. I love that.
00:18:12:06 - 00:18:17:16
Makayla
Everyone, go buy duplexes right now.
00:18:17:18 - 00:18:28:12
Joe
All right, folks, thanks for joining us. Remember, you can visit LivPortland.com to get more information and resources on the topic that we just went through here. And in the meantime thanks for joining.
00:18:28:13 - 00:18:29:06
Makayla
Yes thank you.
00:18:29:06 - 00:18:34:02
Joe
Bye Makayla.
00:18:34:04 - 00:19:18:11
Makayla
Thanks for joining us today. If you're interested in finding out more about Joe, myself or the LivPortland team, you can go to LivPortland.com Thanks for giving us a listen and see you next time. On the Off the Record podcast.
