March 2021

Time to travel to your markets. Planes are safe, businesses are opening, and except for some late-winter snows and storms, the coast is clear. I have spent some time in recent weeks making site visits to properties I’m interested in. One in particular was right after the big freeze that swept through south-central U.S. I could see how well some property managers responded and how some did not. Very informative. 

If you’re a tenant in one of those properties and the snow or snow-melt, garbage pileups, roof leaks, and huge lakes in the middle of your parking lots became part of your daily life, you’re thinking maybe this is the time to move.

Virtual tours work great but, as I’ve noted before, there’s no substitute for being there. When you visit properties, you gain a better perspective for the neighborhood, the types of businesses nearby, proximity to other services like transit, how well does the city take care of the roads, how is traffic and will cars see your property.

You are also going to take with you a list of comps and their addresses. Visit them too. You might be pleasantly surprised that your comps really aren’t such great properties! They’re getting similar, even higher rents? Well, that’s your opportunity to make your future property nicer and more attractive.

Sellers like to know which buyers are serious and a site visit is a profound demonstration of your interest. Meet the seller and their broker if you can, take the tour, but visit the property regardless. You will strengthen your offer by having firsthand knowledge of the property.

Can’t make it? Find a local partner, boots on the ground, and build your partnership with them by working together on a property assessment.

Bend, OR – Oregon landlords are experiencing dramatic change these days with statewide rent controls on top of the pandemic eviction moratoriums. New laws implemented in 2020 cap rental increases and tighten eviction rules, but if a market in Oregon intrigues you, look deeper into these rules. They may not be so onerous. For example, the rent increase limits apply only to current tenants and still allow 7% plus inflation. Not great for landlords, but maybe not a deal breaker.

Which makes it worthwhile considering Bend, Oregon, for your next property. It’s outside of the crazy I-5 corridor on the western side of the state, Portland on down, and ideally located next to phenomenal outdoor recreation. A true hidden secret.

Which for a population of just under 100,000 (or maybe over by now?), it has 26 breweries! This is a lifestyle city that is aggressively attracting the kinds of companies every city wants – technology, engineering, and financial. In fact, you’ll find Bend near the top of many population and job growth lists. If you’re a work-from-home type and want to escape the city, you can’t do much better. Tech workers from Seattle, Portland, and the San Francisco Bay area make up a big share of the population influx.

Year-round tourism put Bend on the map (skiing, rafting, fishing, golfing, biking, rock climbing) and Covid brought tourism to its knees in 2020, but most of these people didn’t leave. Tourism is coming back but Bend experienced job growth rates of 5-7% annually in years prior to 2020. For those of us looking for around 1 to 1-1/2% jobs growth, Bend will continue to offer multifamily investors a compelling opportunity.

Choosing a market – what to consider
Many of us, myself included, started out investing in our back yard. We know the area, we can do work there ourselves, and we can interview the tenant applicants. Then, with my properties the equity grew, I decided I need to get out of day-to-day management, and I sold them. I bought bigger properties, farther away and in better markets. Mostly better.

I wasn’t thinking about choosing markets with my first properties, and gave it only a little bit of thought after that, but learned quickly that some markets are going to stay down and out for generations to come. I needed a way to decide whether a market was good to invest in multifamily.

There is a lot material available on good criteria for choosing markets and a lot of high-priced research firms – Milken, CBRE, etc. – produce fantastic reports on good markets. All terrific, but I’m going to share my top criteria.

First, the most common criteria:

  • Population growth: your market should be growing, otherwise you have an uphill battle competing for fewer renters. Do a Google search to find out trends over the last 5-10 years.
  • Jobs growth: Jobs beget jobs. It is compounding. Good high-end jobs lead to 2-3 times that number of lower paying but solid jobs. Then companies make big moves into markets where their employees will have services that support quality of life. Use Bureau of Labor Statistics to find jobs growth.
  • Crime: Check crime rates in the sub-market around your target property, not just the city’s crime rate. Use,, or
  • Median income and housing prices – use these to determine if the area is affordable and if there are enough people to pay the rent you need. Find that in

This only scratches the surface but you need to start with these data points.

Here are two more criteria that I consider among the most important:

  • Property management – If your property is too small to support an on-site manager, how many local PMs are there to choose from? Do they manage other multifamily properties? How many properties, how many units? Do they have their own crew or contract out their work? I’ve had bad luck with PMs who have their own crew because where they see a problem, they send a crew to fix it and charge me, even when that’s not the right answer. They have to keep their crew busy. However, when the PM contracts out their projects, make-readies and renovations are way too often delayed.

    After we get the tenant’s notice to vacate the contractor schedules their time to come by and see the unit and bid the project, then tells us when they can start, which is too often days or weeks after the unit became empty. That’s brutal, waiting for the contractor, especially in busy times of year. Like now. Talk to the other owners and ask tough questions. If your market has no PM choices that you can be confident are good, your chance for success is low.

  • Rent upside – first check out the rent growth for the city in general. You would see evidence of low or zero rent growth in the above statistics – population growth, jobs growth – but then you need to confirm this area of the city is seeing demand. Get rent comparables from multiple sources – Costar, Rentometer,, but be sure to do your own survey. Don’t just rely on published materials because it is based on incomplete information, and often dated. An ad on for a similar unit nearby might be a higher rent (good!) but they might have 20-30 units available immediately at that rent (not good). You need to come up with interview questions for your own rent survey. Know which nearby properties to call, ask them the rents for 2BR units, square footage, is it renovated, what amenities, etc. Do these surveys yourself at first, then find a virtual assistant to do them. I’ve always been someone who wanted to do the work myself, until I let go and realized others do this work frequently and are much better at it than me. It’s not just using my time more effectively, it’s accepting that many people have skills that I don’t have. If value-add is your strategy and rent increases are critical after you invest in renovations, confirm the market will return your investment with higher rents.

Who We Are

Cardinal Oak Investments acquires, improves, and manages under-valued commercial apartments. We buy B and C class properties of around 100 units in the Southeast and Midwest. We look for properties whose amenities, aesthetics, and appeal have fallen into obsolescence, whose care reflects tired management, and whose location is where a stable workforce wants to live.

And we partner with like-minded investors looking for stable assets that produce good cash flow and strong appreciation.

Founded and managed by John Todderud, Cardinal Oak Investments has acquired properties on both coasts and in between creating annual double-digit returns.

For more information, schedule time with me or contact us.

Please note: Past performance is no indication of future performance.