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There is a fundamental shift happening in the Portland real estate market where marketing times are expanding, buyers have a few more home choices (and time to think about those choices), and to get top dollar sellers have to rely on full-service agents to properly market their properties and reach the most buyers. The days of putting a sign in the yard and bragging about 12 offers in three days are over.
As the market shifts, opportunities arise. Right now is a great time for real estate investors to evaluate their current position. One metric that is still solid is prices. An owner’s investment property is worth more now than it ever has ever been worth. In this type of market, it is often a good idea for investors to consider a less is more strategy to increase cash flow.
Less properties can equal more cash flow?! Why yes, that is precisely what I am saying. Let’s take a look at this example:
An investor owns ten houses worth $350,000 each and owes $150,000 on each of those properties. That is $2 million in equity. Say that investor’s monthly cash flow (after expenses and debt service) is $600 a month on each property for an aggregate cash flow of $6,000 per month. That investor hires us to sell five of those homes for top dollar allowing them to pay off the five homes they still own which means they now have five houses free and clear worth $1.75 million. Without any mortgage payments, the investor’s new monthly cash flow would increase to $1,450 per unit or $7,250 per month. That is a 20 percent increase!
As investors ourselves, we always have strategies for our investor clients to maximize their returns. Call us today for a free consultation!
