Ultimate Union Real Estate Investing Guide for 2024

BRRRR stands for “Buy, Rehab, Rent, Refinance, Repeat”. This is a way to expand your investment portfolio not just buy one asset. It is essential that you be able to receive a “cash-out” refinance loan for the system to work.

The After Repair Value (ARV) of the house has to total more than the combined buying and refurbishment costs. The home is refinanced based on the ARV and the difference, or equity, is given to you in cash. This capital is reinvested into another property, and so on. This strategy helps you to steadily grow your portfolio and your investment revenue.

When an investor holds a substantial portfolio of real properties, it makes sense to hire a property manager and establish a passive income source. Locate one of the best investment property management companies in Union OR with a review of our comprehensive directory.

Factors to Consider

Population Growth

The rise or fall of a market’s population is an accurate benchmark of the market’s long-term desirability for lease property investors. If the population increase in a location is strong, then more renters are obviously moving into the community. Moving companies are drawn to rising regions giving secure jobs to people who move there. This equates to reliable renters, more rental income, and more potential buyers when you need to sell your asset.

Property Taxes

Real estate taxes, similarly to insurance and upkeep costs, may differ from place to place and must be looked at cautiously when estimating potential returns. High payments in these areas jeopardize your investment’s profitability. If property taxes are excessive in a specific community, you probably prefer to look in a different location.

Price to Rent Ratio

The price to rent ratio (p/r) is a comparison of median property prices and median lease rates that will show you how high of a rent the market can allow. If median home values are high and median rents are small — a high p/r — it will take more time for an investment to pay for itself and achieve profitability. A higher p/r tells you that you can charge lower rent in that region, a small p/r tells you that you can collect more.

Median Gross Rents

Median gross rents are a true yardstick of the acceptance of a rental market under examination. Search for a consistent increase in median rents during a few years. Declining rents are a red flag to long-term investor landlords.

Median Population Age

Median population age in a dependable long-term investment environment should mirror the normal worker’s age. You will discover this to be accurate in cities where workers are moving. A high median age signals that the current population is retiring with no replacement by younger workers moving there. This is not advantageous for the impending economy of that area.

Employment Base Diversity

Accommodating different employers in the community makes the market less unstable. When there are only a couple major hiring companies, and one of them relocates or disappears, it can lead you to lose tenants and your property market prices to decline.

Unemployment Rate

You will not be able to get a stable rental income stream in a region with high unemployment. Non-working people stop being customers of yours and of related businesses, which creates a domino effect throughout the region. The remaining people may discover their own wages marked down. Even tenants who are employed may find it hard to keep up with their rent.

Income Rates

Median household and per capita income data is a useful tool to help you navigate the cities where the renters you are looking for are located. Increasing wages also inform you that rental rates can be adjusted throughout the life of the asset.

Number of New Jobs Created

The more jobs are regularly being generated in an area, the more stable your tenant pool will be. More jobs equal additional tenants. This ensures that you will be able to keep an acceptable occupancy level and purchase more real estate.

School Ratings

Community schools can have a strong impact on the property market in their neighborhood. Well-graded schools are a requirement of businesses that are considering relocating. Moving businesses bring and draw prospective renters. Homeowners who move to the city have a positive impact on real estate values. You can’t run into a vibrantly growing housing market without reputable schools.

Property Appreciation Rates

Property appreciation rates are an imperative portion of your long-term investment approach. Investing in real estate that you want to maintain without being certain that they will rise in price is a formula for failure. Substandard or shrinking property value in a location under examination is unacceptable.

Residential units where tenants stay in furnished units for less than a month are called short-term rentals. The per-night rental rates are normally higher in short-term rentals than in long-term rental properties. Short-term rental units may need more constant maintenance and sanitation.

Home sellers standing by to close on a new home, backpackers, and corporate travelers who are stopping over in the community for a few days prefer to rent a residential unit short term. Any homeowner can transform their property into a short-term rental with the services offered by virtual home-sharing portals like VRBO and AirBnB. This makes short-term rental strategy a feasible way to try real estate investing.

Destination rental owners necessitate dealing one-on-one with the tenants to a larger extent than the owners of annually leased units. That dictates that landlords deal with disagreements more often. You may want to cover your legal exposure by working with one of the top Union investor friendly real estate law firms.

Factors to Consider

Short-Term Rental Income

First, figure out the amount of rental income you must have to reach your desired return. A glance at a community’s current typical short-term rental rates will show you if that is a strong community for your project.

Median Property Prices

You also have to determine how much you can spare to invest. Look for cities where the purchase price you count on is appropriate for the present median property values. You can customize your community search by looking at the median market worth in specific sub-markets.

Price Per Square Foot

Price per square foot could be confusing when you are looking at different buildings. If you are analyzing the same types of real estate, like condominiums or detached single-family residences, the price per square foot is more consistent. You can use this information to obtain a good overall picture of housing values.

Short-Term Rental Occupancy Rate

A quick look at the city’s short-term rental occupancy rate will show you if there is an opportunity in the district for additional short-term rental properties. A high occupancy rate means that a fresh supply of short-term rental space is necessary. If property owners in the city are having problems renting their existing properties, you will have trouble finding renters for yours.

Short-Term Rental Cash-on-Cash Return

Cash-on-cash return is a means to estimate the profitability of an investment plan. Take your estimated Net Operating Income (NOI) and divide it by your investment cash budget. The percentage you get is your cash-on-cash return. High cash-on-cash return shows that you will get back your cash quicker and the purchase will have a higher return. Financed purchases will show better cash-on-cash returns because you’re using less of your own cash.

Average Short-Term Rental Capitalization (Cap) Rates

This metric compares property worth to its annual revenue. An investment property that has a high cap rate and charges average market rental prices has a good market value. If cap rates are low, you can assume to pay more cash for investment properties in that city. You can calculate the cap rate for potential investment property by dividing the Net Operating Income (NOI) by the market worth or purchase price of the investment property. This gives you a ratio that is the per-annum return, or cap rate.

Local Attractions

Short-term tenants are often travellers who visit a city to enjoy a yearly special event or visit places of interest. When an area has places that periodically produce sought-after events, like sports coliseums, universities or colleges, entertainment halls, and adventure parks, it can draw people from out of town on a recurring basis. Outdoor attractions like mountains, waterways, beaches, and state and national nature reserves will also bring in future tenants.

The fix and flip strategy means buying a home that requires fixing up or rebuilding, putting added value by enhancing the property, and then liquidating it for its full market value. To be successful, the flipper has to pay below market price for the property and determine what it will take to renovate the home.

You also have to evaluate the resale market where the property is situated. The average number of Days On Market (DOM) for houses sold in the region is crucial. Selling real estate promptly will keep your expenses low and ensure your revenue.

To help distressed residence sellers find you, list your firm in our lists of property cash buyers in Union OR and property investors in Union OR.

Additionally, look for real estate bird dogs in Union OR. These experts specialize in rapidly finding promising investment ventures before they come on the marketplace.

Factors to Consider

Median Home Price

Median real estate value data is a vital benchmark for estimating a potential investment region. If purchase prices are high, there might not be a steady reserve of run down properties in the market. This is a basic element of a fix and flip market.

If market information shows a rapid decline in real property market values, this can indicate the availability of potential short sale homes. You will hear about possible opportunities when you partner up with Union short sale negotiation companies. Learn more about this type of investment described by our guide What to Know When Buying a Short Sale House.

Property Appreciation Rate

The changes in real estate values in a location are vital. You need an environment where property prices are steadily and consistently going up. Unreliable value changes are not beneficial, even if it’s a significant and quick growth. You could wind up purchasing high and liquidating low in an unpredictable market.

Average Renovation Costs

Look carefully at the potential rehab spendings so you will know if you can achieve your targets. Other expenses, like authorizations, can increase expenditure, and time which may also develop into an added overhead. You have to understand whether you will have to employ other contractors, such as architects or engineers, so you can be prepared for those costs.

Population Growth

Population increase is a solid indicator of the strength or weakness of the city’s housing market. If there are buyers for your renovated real estate, the data will indicate a robust population growth.

Median Population Age

The median residents’ age is a factor that you may not have considered. The median age should not be lower or higher than that of the average worker. Employed citizens can be the people who are active home purchasers. Individuals who are preparing to leave the workforce or are retired have very specific residency needs.

Unemployment Rate

When you find a region having a low unemployment rate, it is a solid indication of profitable investment possibilities. The unemployment rate in a potential investment community should be less than the country’s average. A really solid investment market will have an unemployment rate lower than the state’s average. Non-working people won’t be able to purchase your real estate.

Income Rates

Median household and per capita income amounts advise you if you will obtain enough home purchasers in that community for your homes. Most individuals who buy a home need a home mortgage loan. Home purchasers’ eligibility to get approval for a loan hinges on the level of their income. Median income will let you know whether the typical home purchaser can afford the houses you are going to sell. You also need to see salaries that are going up continually. To keep up with inflation and rising building and material expenses, you need to be able to periodically adjust your rates.

Number of New Jobs Created

The number of jobs created on a regular basis shows whether salary and population growth are sustainable. A growing job market means that a larger number of people are confident in purchasing a home there. With additional jobs created, more potential buyers also migrate to the city from other places.

Hard Money Loan Rates

Fix-and-flip investors regularly use hard money loans in place of conventional financing. Hard money financing products allow these buyers to take advantage of pressing investment opportunities without delay. Find top hard money lenders for real estate investors in Union OR so you may match their fees.

In case you are unfamiliar with this loan vehicle, understand more by studying our guide — What Is a Hard Money Loan in Real Estate?.

In real estate wholesaling, you search for a home that investors may count as a good investment opportunity and sign a purchase contract to buy the property. But you don’t buy the home: after you have the property under contract, you allow someone else to become the buyer for a fee. The owner sells the home to the real estate investor not the real estate wholesaler. The real estate wholesaler does not sell the residential property — they sell the rights to purchase one.

The wholesaling form of investing involves the employment of a title insurance firm that comprehends wholesale deals and is informed about and involved in double close purchases. Look for wholesale friendly title companies in Union OR in HouseCashin’s list.

Our definitive guide to wholesaling can be viewed here: A-to-Z Guide to Property Wholesaling. As you opt for wholesaling, include your investment venture on our list of the best wholesale real estate investors in Union OR. This will help your possible investor customers find and call you.

Factors to Consider

Median Home Prices

Median home prices are key to finding communities where residential properties are selling in your investors’ price level. As investors prefer investment properties that are on sale below market value, you will want to find below-than-average median purchase prices as an indirect tip on the potential availability of residential real estate that you may buy for less than market value.

A rapid decline in real estate worth could lead to a large selection of ‘underwater’ homes that short sale investors search for. Short sale wholesalers frequently receive advantages using this opportunity. Nevertheless, be cognizant of the legal risks. Learn about this from our detailed article Can You Wholesale a Short Sale House?. Once you’re prepared to start wholesaling, search through Union top short sale lawyers as well as Union top-rated real estate foreclosure attorneys lists to discover the right counselor.

Property Appreciation Rate

Property appreciation rate enhances the median price stats. Many investors, such as buy and hold and long-term rental investors, specifically need to see that home prices in the area are increasing consistently. Shrinking market values show an unequivocally poor leasing and housing market and will chase away real estate investors.

Population Growth

Population growth numbers are important for your intended contract purchasers. A growing population will require additional residential units. This includes both rental and ‘for sale’ properties. When a community is declining in population, it does not need more housing and real estate investors will not be active there.

Median Population Age

Real estate investors want to participate in a strong housing market where there is a good supply of renters, newbie homebuyers, and upwardly mobile residents buying more expensive residences. An area with a huge employment market has a steady source of tenants and buyers. When the median population age is equivalent to the age of wage-earning citizens, it indicates a dynamic residential market.

Income Rates

The median household and per capita income in a good real estate investment market should be growing. Increases in lease and asking prices must be backed up by improving salaries in the market. Real estate investors stay out of places with declining population wage growth numbers.

Unemployment Rate

Investors will carefully evaluate the location’s unemployment rate. Tenants in high unemployment markets have a difficult time staying current with rent and a lot of them will stop making rent payments altogether. Long-term real estate investors who count on reliable lease payments will suffer in these markets. High unemployment creates uncertainty that will prevent interested investors from purchasing a property. This can prove to be challenging to find fix and flip real estate investors to take on your contracts.

Number of New Jobs Created

The amount of jobs created on a yearly basis is a crucial part of the housing framework. New jobs created mean a large number of workers who require properties to lease and purchase. Employment generation is beneficial for both short-term and long-term real estate investors whom you rely on to close your sale contracts.

Average Renovation Costs

Rehabilitation costs have a strong effect on an investor’s profit. The cost of acquisition, plus the expenses for renovation, should be lower than the After Repair Value (ARV) of the property to allow for profitability. Lower average rehab spendings make a place more profitable for your main customers — flippers and rental property investors.

Mortgage note investors obtain a loan from mortgage lenders when the investor can buy it for a lower price than the outstanding debt amount. When this happens, the investor becomes the debtor’s mortgage lender.

Performing loans mean mortgage loans where the debtor is consistently current on their mortgage payments. Performing notes bring consistent cash flow for you. Investors also obtain non-performing mortgages that the investors either rework to help the debtor or foreclose on to get the collateral below market value.

Ultimately, you could grow a number of mortgage note investments and lack the ability to service them without assistance. At that time, you might need to use our directory of Union top mortgage loan servicers and redesignate your notes as passive investments.

If you conclude that this plan is perfect for you, put your firm in our directory of Union top mortgage note buyers. Once you do this, you will be discovered by the lenders who publicize profitable investment notes for acquisition by investors such as you.

Factors to Consider

Foreclosure Rates

Note investors searching for valuable loans to purchase will want to uncover low foreclosure rates in the community. Non-performing loan investors can cautiously take advantage of cities with high foreclosure rates as well. If high foreclosure rates are causing an underperforming real estate market, it might be challenging to resell the property after you seize it through foreclosure.

Foreclosure Laws

It’s necessary for note investors to learn the foreclosure regulations in their state. Some states require mortgage documents and others use Deeds of Trust. With a mortgage, a court has to agree to a foreclosure. Note owners do not have to have the court’s agreement with a Deed of Trust.

Mortgage Interest Rates

Acquired mortgage notes come with an agreed interest rate. That interest rate will undoubtedly influence your returns. Regardless of which kind of note investor you are, the loan note’s interest rate will be important for your forecasts.

The mortgage rates set by conventional lenders aren’t equal in every market. Mortgage loans supplied by private lenders are priced differently and may be higher than conventional mortgages.

Profitable note investors continuously search the rates in their area set by private and traditional mortgage lenders.

Demographics

If note investors are determining where to purchase notes, they will examine the demographic data from possible markets. The community’s population increase, employment rate, job market increase, pay standards, and even its median age provide important facts for note buyers.
Performing note buyers require borrowers who will pay as agreed, generating a consistent revenue flow of loan payments.

Non-performing mortgage note buyers are reviewing similar elements for various reasons. In the event that foreclosure is required, the foreclosed house is more conveniently unloaded in a good real estate market.

Property Values

Lenders want to find as much equity in the collateral as possible. If the value is not much more than the loan balance, and the lender needs to start foreclosure, the house might not generate enough to payoff the loan. As mortgage loan payments decrease the balance owed, and the market value of the property goes up, the borrower’s equity goes up too.

Property Taxes

Payments for property taxes are usually given to the mortgage lender along with the loan payment. By the time the property taxes are due, there needs to be adequate funds in escrow to handle them. If loan payments are not current, the lender will have to either pay the property taxes themselves, or they become past due. When taxes are delinquent, the government’s lien leapfrogs all other liens to the head of the line and is satisfied first.

If a municipality has a history of increasing tax rates, the combined home payments in that municipality are regularly increasing. Past due homeowners might not be able to keep up with increasing mortgage loan payments and could interrupt paying altogether.

Real Estate Market Strength

Both performing and non-performing note investors can do business in a strong real estate market. As foreclosure is an important element of mortgage note investment strategy, growing real estate values are essential to locating a good investment market.

A strong real estate market might also be a lucrative place for originating mortgage notes. It is an additional stage of a note investor’s career.

A trust operating income-generating real estate and that offers shares to the public is a REIT — Real Estate Investment Trust. Before REITs were created, investing in properties used to be too expensive for the majority of investors. Many people these days are capable of investing in a REIT.

Shareholders’ investment in a REIT is considered passive investing. The liability that the investors are accepting is distributed within a collection of investment properties. Shareholders have the right to unload their shares at any time. But REIT investors do not have the capability to choose specific investment properties or locations. Their investment is limited to the investment properties chosen by the REIT.

Mutual funds that own shares of real estate businesses are termed real estate investment funds. Any actual real estate is owned by the real estate businesses, not the fund. This is an additional method for passive investors to allocate their investments with real estate without the high initial cost or risks. Whereas REITs are required to disburse dividends to its participants, funds do not. Like any stock, investment funds’ values grow and drop with their share value.

You may choose a fund that focuses on a selected category of real estate you’re aware of, but you don’t get to pick the location of each real estate investment. You have to rely on the fund’s directors to decide which markets and assets are chosen for investment.