When I first formed Endless LLC I had big hopes and dreams: renovate 8-10 houses a year, start collecting rentals, and then be able to afford the carrying costs needed to do some unique urban infill projects featuring amazingly designed smaller homes.
Fast forward two years. Our dear friend and lead architect and designer has passed away at 48. A global pandemic has ensued. Fires, protest, elections!
The world and Portland real estate are forever changed. The supply of homes fails to meet demand. And yet, it turns out that doing really quality work on a home does not pay the bills! On NE Sumner we barely made a profit thanks to a low appraisal mid pandemic panic. And now on this property we lose a big chunk of change. Everything is expensive. But you know what the most expensive thing is? A run down, shitty house. That’s where the game is won and lost. When fixers are 400-500k there is not enough upside on the back end to eek out a profit. And all I see (fixers wise) are abject dumps for 400 or more. WTF?!
As the pandemic rages on and has it’s way with our economy I can’t see how the real estate market could continue to be this robust. But I have been waiting for things to slow down for two years now. Markets cycle, that’s what they do. But what does that cycle look like? Traditionally we would swing from Sellers Market (demand outstrips supply) to Buyers Market (supply outsrips demand). Now I wonder if we will ever see another full blown buyers market. If we will it will be 2021-2023.
We love renovating homes. Its creative. It creates jobs. It breathes 100 years of life into an existing home (way less wasteful than new construction), it betters communities, its fun! But there has to be a reward for all the risk. I cannot let my desire to maintain momentum over ride the stark reality of the marketplace. Quitting is too east and we have come too far for that. But Im good on the 400k fixer market.