Rick M. Bean

I need your help.

I've to talked to property owners, brokers, title companies...but nobody seems to know of any properties for sale that fully meet the needs of one of my clients. He has no 1031 or 1033 Exchange deadlines to worry about...but he does have cash sufficient to purchase 60 to 80 quality units in the Portland area. Wilsonville doesn't hit his sweet spot...nor does Gresham or much East of I-205. Vancouver is possible...West and Southwest PDX would be winners.

He's willing to pay a fair price for quality.

He takes real pride in ownership: fixer-uppers are not his thing. This is a knowledgeable investor who puts little stock into overly optimistic proformas. The challenge for me is to deliver value to him he can't find elsewhere by himself. Off-market deals, pocket listings are more likely to get consideration than something on Loop-Net or Craigslist.

I appreciate all offers

...including the six folks that have suggested that their client's now dark single tenant NNN store would be a good opportunity. My client's interest isn't awakened unless it has the 3 T's. (Tenants, Trash and Toilets) If you have any ideas good or bad...please call Rick M. Bean at Rose City Commercial Real Estate: 503.577.1034, or e-mail me at: rick@rosecitycre.com.

At their best real estate brokers are true professionals.  50 to 80 hour weeks, always looking for additional  training, and a new way to provide clients better service.  Their quest for excellence often takes them away from their families more than it should...but nobody ever became the best in 40 hours a week.  There are a few that miss the mark...but that's true in every field.  Working hard isn't enough though.

A lot of Realtors® could learn from watching my friend, John Adams.  Several years ago John went shopping...and came away disappointed.  He wanted to show his support for his beloved U of O Ducks and protect his trailer hitch...but none of the stores had any product that fit the bill.  That told my friend that there was an unfilled need.  John learned about the trailer hitch cover niche...from manufacturing, to licensing, who the clients might be and all of the facets of the industry.  He focused his efforts on a very narrow field..trailer hitch covers...and now he is the King of them.  His own proprietary designs have been approved the by collegiate licensing authorities...and as his success has grown, others have offered him their lines for distribution.  (Check it out at www.Logo-Products.com.)

Like John, by focusing on a niche and becoming  highly proficient at it we can maximize our results.  In coming posts I will demonstrate this further by highlighting real estate professionals that have created great success by dominating their niche.  They have leveraged a narrow focus...into great abundance!  Check back for the first in the series:  Short Sales.

Call Rick Bean at 503.577.1034 or: e-mail me at: Rick@rosecitycre.com today!  Shouldn't you invest in Real Estate with a professional that focuses soley on your success?

One of the metrics to look at when picking an area for a long term investment is the affordability index.  And by that I don't mean looking soley at how much the median income is in an area...I mean:

Average Rent/Median Household Income = Affordability Index.  (What portion of your pay goes to rent?)

It's great that some investment counselors track Median Household Income (MHI), but without the context of average rent for that area we really don't have a way to evaluate areas that have long-term rent expansion capability.  An obvious example is New York City.  Clearly the MHI is higher there, but so are average rents.  New York has an affordability Index of 57.2%.  That means that between half and two thirds of the household income goes for rent.  I suggest that while NYC has posted impressive rent gains for all property types, that the pace of those increases is likely to wane...how much more than 57% of your income could you afford to pay for rent?   Years ago I had an employee that considered himself to be a real tout, a master horse race handicapper.  Mark would always tell me:  "Rick, there are horses that run fast, and horses that run long...but aint no horse that runs fast and long."  I think NYC has run fast...for about as long as it can.

Highly Ranked Portland

With Average Rents at $825 and Median Household Incomes at $57,757, Portland's Affordability Index is 16.8%.  That's fifth in the nation.  Portland-Beaverton-Vancouver "Asking Rents" jumped an average of of 3.1% in the fourth quarter of last year compared to a year earlier.   Full disclosure:  Oklahoma City had the nations best ratio at 12.3%...but the catch is that if you move there ...every morning you wake up in Oklahoma.

With room for long term rents to expand and a great area to live in, isn't this a great time to invest in Portland area multifamily properties?

This isn't even my listing...but I'm making good on my commitment to find great deals for my investors.  This NE duplex is a great value:  for under $165k you get two residences for less than the normal price for one. My faithful readers know that I eschew residential multifamily in favor of commercial multifamily due to the usual lack of cashflow.  On most plexes you have to put huge downs just to keep from having an alligator to feed monthly.  As such, many entry level investor's feel their sole option is  to live in one side and rent out the other.  As this is already approved for a short sale below $165K, someone else has already done the hard work of negotiating with the bank on the owner's behalf.  That means most investors can buy it, rent out both sides and still have it cash flow.  One thing about buying distressed property...they are often older residences and trashed inside.  On their way out some homeowners remove every light bulb switch cover, and even the toilets.  The reason I am selecting this as a "best buy" is the condition of the units and their effective and actual age.  (They were built in 1997.)  Anyone who has entered an REO property will have a hard time believing that these pictures are really Short Sale Units.

Details: The large unit is 1,208 Sq. Ft. 2 bedroom/1.1 bath home with a fireplace.  It rents for $795 per month.  the smaller 1 bedroom/1 bath unit has 650 Sq. Ft. and rents for $625/month. 

Contact me at 503.577.1034 if this sounds attractive.  Or e-mail me at rick@rosecitycre.com.

I will be describing cash flowing commercial deals soon!

In the old days, bankers used to take commercial brokers out to lunch...we were customers.   They'd tell us how much we were valued, and they would tout their customer service.  Nowadays, we invite them to lunch and we're pretty delighted if they return our calls.
Brokers differ on which used to be more difficult to find:  deals worth doing, or finding a buyer and seller that could agree to terms.  Financing was never easy, but it certainly was the least problematic of the three.  Now it may be the most important of the three and the hardest to find.

Several months ago I spent several hours with a commercial mortgage broker reviewing current needs.  One project needed a $2 million loan, one was twice that, and others were smaller.  That broker hasn't called back yet.  Actually it's been so long I wouldn't take his call now. I worked with another company for weeks on a deal...then they called and wanted additional information and additional equity so that the loan would be at 49% LTV.  Oh, and by the way that's a full recourse loan.  Additional information requests I can explain to the client, the LTV part is tougher.  Recourse loans on development projects are expected, but on take-out multifamily financing?  Did I mention they had a 1.30 DSCR?

ENTER HOLLY BRAY:I felt at one point that I needed to stop looking for new clients and deals, and focus on funding for the ones I had. Holly Bray and Love Funding changed that.  She noticed one of my LinkedIn posts and called.  We spoke at length about the market, my needs, their offerings, and she promised to send me some information.  She restored my belief in bankers by answering my questions, getting me the information faster than promised, and then checking back with me to discuss the details of the various programs.  Love Funding is a National, full-service, mortgage banking firm specializing in financing a broad spectrum of commercial real estate including multifamily, nursing homes, assisted living facilities, and board and care facilities.  With Rose City's focus on the multifamily segment it was their HUD 223-f loans that caught my eye. 
These are non-recourse loans permitting LTV's as high as 85%, and DSCR's as low as 1.1765.  You can finance repairs and upgrades up to $6,500/unit adjusted to the high cost factor for the market (Portland's factor is 248%, or $16,120 unit).  They'll even base loans on current market income and consideration of improvements (proforma).  Added benefit: 223-f  loans feature 35-year amortization schedules.  

For complete details about this program or other loan  products, call Holly Bray at:  202-887-1849 or email: hbray@lovefunding.com.  Isn't it time to start working with professionals?

Note: Rose City Commercial Real Estate does not have an undisclosed interest in any of the firms we discuss in this column, nor do we receive compensation.  We believe in superior service and support firms whose actions demonstrate that they do as well.