Did you miss our first Thirsty Thursday Investor Happy Hour?? 

We had a great time, as you can see above, at the Prime Tap House West End in Beaverton. We networked, shared success (and horror) stories, and ate delicious wings.

Our members enjoyed free drinks and appetizers. Stay tuned for our next happy hour on the last Thursday of the month.

We are also recruiting for new board members! If you have been a member for at least two years and are interested in serving, please email NWREIA Vice President Dave Metsker at primefinancial@frontier.com

We are proud to continue as the largest organization for real estate investors in the Portland/Vancouver, Willamette Valley, and Northern Coast areas.

Christian

Working For You & Our Industry

I hope that you had a nice 4th of July with your family and friends!

Last month, I was honored to travel on behalf of NWREIA to the National Real Estate Investors Association mid-year leadership conference in Milwaukee, Wisconsin. Along with me was our executive director, Patrick Sieng. Together, we recruited national speakers who will plan to come to our monthly investor forum meetings to educate us on how to make money! We also solidified connections with our vendor members who provide us with deep discounts - including Home Depot, Arcana Insurance, Rent Perfect, and Office Depot. To learn more about these benefits, please login to the members area on our website or click here.

The market continues to adjust from rising interest rates and inflation. This is a prime time for investors and NWREIA will continue to provide our members with prime opportunities to network and be educated on what's coming.

In addition to our many roundtable meetings around the region, please join us next month for our main investors forum meeting where Aaron Kirk Douglas from HFO Investment Real Estate will present a "Market Update for Investors." We'll hear the latest on rents, vacancy rates, population changes, submarket highlights, and transaction volume. Don't miss this important meeting.

As always, please let us know how we can work for you.

Best Regards,

Christian Bryant
President

Courtesy of NWREIA Preferred Vendor IRC Enterprises

Read the full article here.

With more than 435 million dollars distributed, the federally funded Oregon Emergency Rental Assistance has been a necessary relief to many tenants in need. Even though so many Oregon tenants have received financial assistance, there still remain others that are at risk. In response, the OHCS has announced a limited reopening of the OERA portal for 3-5 weeks beginning on Jan 26th, depending on availability of funds. Although it is unlikely that remaining funds will be sufficient to pay all applications expected to be received once the portal opens, the OHCS will continue to prioritize applications based on need.

You can find more information on local agencies at https://caporegon.org/who-we-are/the-community-action-network/. For more information on Oregon’s Rental Assistance Program, visit their website at https://www.oregonrentalassistance.org/additional-assistance/

Courtesy of NWREIA Preferred Vendor Merchants Mortgage

In the US, house flipping activity is rising. And no wonder, considering the average gross flipping profit in Q2 of 2020 was $67,902.

But how much does it cost to flip a house? Well, that’s a tricky question… When budgeting for a flip, any number of variables can negatively (or positively) affect your perfectly balanced spreadsheet. For example, when purchasing a house to flip, you may need several hundred thousand dollars or almost no money upfront. The house’s location, condition, and your credit score all impact how much money you’ll need. Keep in mind that no two projects are exactly alike, so your costs will vary from project to project.  You’ll never know exactly how much money a flip requires until you’ve completed the process, but estimating as accurately as possible is critical. Keep reading to learn more about the costs associated with house flipping and how to finance your first flip.

Cost of Purchasing
There’s no one-size-fits-all formula to estimate house flipping costs. There are personal preferences to consider, as well as unpredictable variables to take into account. And, as no two properties are alike, the cost of a flip will vary from market to market—as well as property to property. The cost of flipping a house depends on too many variable expenses for investors to come up with a comprehensive answer. However, there are general expenses that cannot be pinpointed. You must work these into your budget—even if you don’t know exactly how much they will be.

There are several costs to consider when buying a house—not only the initial price. The purchasing cost is a combination of several expenses—the highest of which is the purchasing price. However, other charges you’ll incur include:
• Paying off liens
• Property taxes
• Title search fees
• Commissions
• Insurance

When buying a house, you have to pay property taxes while you own it, as well as taxes on short-term capital gains on any profits. Federal short-term capital gains are taxed at the same rate as personal income. Some states will also take a cut off capital gains taxes, but you will pay federal tax no matter where you decide to buy.

Renovation
When you include rehab and repair costs, the cost of flipping a house increases dramatically. Renovation costs are often the hardest to estimate, as a typical rehabilitation could have anywhere from a few reno and repair costs to countless expenses. While you shouldn’t rush renovating your house flip, you don’t want the house to sit around on the market too long. For this reason, look for a property that will only take four to six weeks to rehab. Owning a house for less than two months helps you keep costs such as interest and taxes at a minimum. The key to your success is to find contractors who do quality work efficiently. So, do your due diligence before onboarding one. Don’t make the mistake of going with the first contractor you find, but interview at least a few. Ask for the license number, references, and an estimate. Further, be wary of contractors who ask for money in cash upfront. They’re not playing by the rules and may try to run off with your money.

To give you an idea of what renovation costs you should expect, let’s go over some everyday renovation expenses throughout a house flip.

• Interior Construction — If you’re hoping to flip a house as they do on HGTV, the interior is where you’re likely to spend most of your rehab money.
• Paint — Your rehab budget should always include interior paint, no matter the project. A single coat of paint can transform an entire home.
• Flooring — Your most economical option for attractive & functional flooring is installing laminate, luxury vinyl, or simply refinishing existing hardwood that’s already in place. While you may have thought of installing new, true hardwood, that will drive up costs. Other alternatives include engineered hardwood (top layer is hardwood, bottom layer is composite material). Be thoughtful in your analysis of flooring costs & the most practical material to use. 
• Appliances — Appliances make or break kitchens, so it’s crucial to buy nice ones for your flip. Appliances you’ll buy may include an oven, range, range hood, refrigerator, microwave, and dishwasher.
• Kitchen — Your kitchen rehab will include countertops, cabinets, plumbing, backsplash, sink, garbage disposal, electrical, faucets, and other amenities.
• Bathroom — Bathrooms are of interest to buyers, so spend some time buying fixtures that complement the home. Deck out the bathroom with a sink, faucet, tub, shower, vanity, countertop, towel bars, lighting, and mirrors. Don’t forget basic plumbing and electrical.
• Framing — Don’t let framing be an afterthought. If you leave it out, you may upset your entire budget. Account for additional framing or walls that may need to be torn down.
• Insulation — Always properly insulate any home you renovate. It will attract more buyers because it makes the house more energy efficient.
• Doors and Trim — Doors and trim are relatively inexpensive and can transform the look of a project. Upgrading doors is an easy way to add interest.
• Walls — Your budget should account for any damage to the house’s walls and ceilings. When complete, your flip should not show signs of wear and tear.
• Exterior Construction — “Curb appeal” isn’t just a real estate buzzword. It’s your potential buyers’ first impression of your property, and it can mean cash in the bank. Take the following expenses into account when crafting your reno budget.
• Roof — While it’s not always necessary, replacing the roof can be well worth the money. A new roof will always increase curb appeal if you have the means to replace it altogether.
• Siding — If the house you’re flipping has siding, you may have to repair it, if not replace it altogether.
• Masonry — Most stone and brickwork requires repair, so factor in small fixes into your budget.
• Windows — It doesn’t matter how much you add to a home if you leave it with old windows. Replace windows if need be—this could potentially present huge results.
• Painting — Every renovation can benefit from a nice, fresh coat of paint when the work is done. Don’t skimp in this area if you want to make a return on investment.
• Landscaping — When all of the rehab is finished, think about the landscaping that will surround the home. You’ll want to spend a little money here to highlight the curb appeal you worked hard to achieve.
• Concrete and Asphalt — Is the house’s driveway cracking, or worse, are their potholes to address? This is something you’ll want to fix, so make sure you budget for concrete and asphalt repair.
• Fences, Pergolas, and Decks — If the home you’re renovating has any wooden amenities, such as fences, pergolas, or decks, those will need to be repaired—or at least stained or painted.
• Mechanical Construction — Last but not lease, don’t leave out mechanical construction costs when you are budgeting for your flip. HVAC units, water heaters, electric wiring—all of this is essential to a home. It will show if you don’t spend money here. Many older homes need entirely new electrical panels, while others will require rewiring throughout the house.
• Holding — Holding costs are the expenses that incur while the property is in your name. Simply keeping the property up and running requires cash, and investors know this.  These expenses won’t take much of a chunk out of your budget, but every good budget takes into account each and every cost. The more accurately you can estimate the cost of your renovation, the more money you stand to make when you sell. This is why having a solid plan and timeline in place is essential.  Examples of holding costs include:
  • Loan repayment fees
  • Utilities
  • Insurance
  • Property taxes
  • HOA FEES
• Selling — Unfortunately, the spending doesn’t end after purchasing a house and renovating it. You’ll need to factor in the costs you’ll insure from selling the home, as well. When you enter into a flipping project, don’t forget to add selling costs as you calculate the cost to flip a home.
  Selling costs are the culminatikon of several expenses, including:
  • Real estate commissions
  • Attorney fees
  • Property taxes
  • Marketing
  • Escrow
  • Miscellaneous fees

When all said and done, the cost of selling a house can amount to several thousands of dollars. You can’t forget to factor these into house flipping costs.

Financing a Flip
Are you still asking yourself, “How much money do I need to flip a house?” Most investors will tell you to set a goal to make a 10% to 20% return on your investment. So, you’ll need to do the math. Research to determine how much your property will sell for when you’re done by looking at comparable properties in the same neighborhood. If you find that a move-in ready home in your area sells for $200,000, lower that price by three-quarters for a run-down property (75% of $200,000=$150,000). Then, subtract the cost of repairs (if you estimate $30,000 for repairs, then $150,000-$30,000=$120,000). In this example, you shouldn’t pay more than $120,000 for your flip to walk away with a decent amount of money.
If you’re wondering how to get a fix and flip loan, speak with a private investor. A fix and flip loan is generally easier than buying a home the traditional way. They’re popular with people renovating and selling houses who prefer not to go through the trouble of taking out a 15- to 30-year mortgage.

Please feel reach to reach out to us with any questions or if you’d like to inquire about financing a fix & flip loan. In the meantime, take care.

The Merchants Mortgage Team

Courtesy of NWREIA Preferred Vendor Toija Beutler, Attorney/Manager, Beutler Exchange Group

The IRS has granted extensions of various tax filing deadlines.  This includes Taxpayers whose exchange sale closed on or before September 7, 2020.  Those Taxpayers get an automatic 120-day extension of the 180-day exchange period and 45-day identification deadline.

The extensions are for the following counties:  Clackamas, Douglas, Jackson, Klamath, Lane, Lincoln, Linn and Marion. 

As our office is located in Clackamas County our clients whose sale closed on or before September 7th are eligible for the extensions regardless of where they are located.  We will be notifying our clients individually.

https://www.irs.gov/newsroom/irs-announces-tax-relief-for-oregon-wildfires-and-straight-line-winds-victims