Located on a quiet street South of SE Stark in Gresham, this 7 unit property features large two and three bedroom, one and one half bath units with ample off-street parking. Rents are lower than market rates due to the seller’s self-managing strategy, and currently the property has long term tenants.
Download the property flyer here.
The roof on the three unit (photo above right) was totally replaced in 2017, and the roof on the four unit (above left) was replaced three to four years ago. Each of the units in the three unit building have a private back porch area.
Market rents for two bedrooms in the area are around $1,100, and the market rents are approximately $1,300 (depending on condition, finishes, etc.). The seller chose to rent well below market as an ownership strategy to decrease turnover (it worked, the tenants are long-term). Since this property has a Gresham address, there is no rental increase restriction.
Upon turnover to market rents, the property has the potential to be nearly a 7% cap rate, even with off-site management budgeted in the expenses. I am not seeing a lot of 7% cap rates with just turnover work required, usually I will need to see more deferred maintenance to obtain that return. The “right” buyer probably has experience operating properties at market rents.
Regarding the location: it is on a quiet, dead end street near many jobs. There is plenty of off-street parking for the tenants.
The price per unit and price per square foot are right at market averages for the Portland and Gresham market in 2018, with potential to be nearly 1.25% higher on a cap rate basis than the market average of approximately 5.75%. The seller would prefer an inspection after receiving an accepted offer so not to disturb the tenants.
For more information on this property, contact Bernard Gehret: 503-546-9390.