Why a Slow Market Is an Investor's Market
Right now there are significantly more sellers than buyers in the market. For every ten buyers, there are roughly sixteen sellers. That imbalance means sellers need us — and many of them know it. Higher rates have scared off a large portion of the buyer pool, but for investors who run the numbers carefully, that fear creates room to negotiate deals that simply weren't available a few years ago.
At our most recent COIN meetup, Suzanne and Sarah sat down with local lenders Ren and Tom to walk through exactly how to take advantage of this environment — from structuring offers to using the tax code to recover your down payment.
What the Bend Market Looks Like Right Now
Homes priced in the three and four hundred thousand dollar range in Bend are moving quickly. First-time buyers, cash investors, and people less sensitive to interest rates are competing hard for those properties. But homes above that range are sitting — longer than we've seen in quite a while for this point in the real estate cycle. That's where the opportunity lives.
One strategy discussed at the meetup: targeting properties that have been on the market for a hundred days or more and submitting offers well below asking. Sellers who are still listed after that long are often the ones who genuinely need to sell. You won't win every negotiation, but you only need a few to go your way.
"Tell us what does work. Come to us with the number that pencils for you. Sellers are willing to have creative conversations right now — but buyers have to start them."
How to Use Seller Credits on Investment Properties
On a conventional investment property loan, the seller credit cap is 2%. That's tighter than the 6% available on a primary residence with more than ten percent down, but it's still a meaningful lever. On a six hundred thousand dollar purchase with twenty-five percent down, a 2% seller credit can be applied to:
- Buying down your interest rate to lower your monthly payment
- Covering closing costs to reduce cash out of pocket at closing
- A combination of both
Portfolio loans — loans held in-house rather than sold to the secondary market — can allow seller credits up to 6% on investment properties. The rate will carry a small premium, but if you're negotiating a large credit, that premium gets absorbed quickly.
Down Payment Sources Investors Often Overlook
Coming up with a larger down payment improves your rate and your monthly cash flow. Here are the sources the group discussed:
- HELOC on your primary residence — typically cheaper than borrowing against an investment property, though the new monthly payment counts toward your debt-to-income ratio on future loans
- 401k loan — you can generally borrow up to fifty thousand dollars or fifty percent of your balance, whichever is lower, pay interest back to yourself, and the payment does not count against your debt-to-income qualification
- Seasoned gift funds — family can gift money for a purchase, but for investment properties it needs to be in your account for at least sixty days before closing so underwriting doesn't flag it as a large deposit
One additional option worth a conversation with your CPA: borrowing against the cash value of a whole life insurance policy. Guidelines vary, so get specifics before you count on it.
Loan Types Worth Knowing
Beyond conventional financing, the meetup covered a few loan structures that open doors for investors:
- High-LTV investment loans — some portfolio programs allow as little as ten percent down on an investment property with no mortgage insurance, provided you have strong credit and already own your primary home
- DSCR loans — if your personal income on paper doesn't qualify you, a debt service coverage ratio loan looks only at whether the rent covers the mortgage; some programs now allow a ratio below one-to-one for borrowers with strong credit and a solid down payment
- Second home financing — if you genuinely plan to use a property for at least fourteen days a year and maintain access to the calendar, second home financing offers seller credit flexibility much closer to a primary residence; this requires honest qualification and the property must be a reasonable distance from your primary home
- House hacking — buying a two-, three-, or four-unit property and living in one unit allows five percent down on a conventional loan and lets you use expected rental income from the other units to help qualify
The Bonus Depreciation Play: One Real Example
Ren, one of our lending partners, shared what happened after he purchased his first short-term rental last October. He used the STR loophole combined with a cost segregation study to generate a six-figure tax refund — enough to recover his entire down payment and a significant portion of his renovation costs.
The key steps he followed:
- Purchased in the second half of the year to make the hour-documentation requirements manageable
- Ordered a cost segregation study within days of closing
- Documented his personal hours working on the property using a tracking app, logging more hours than anyone else associated with the rental
- Worked closely with a CPA experienced in cost segregation before the deal closed, not after
- Tracked every dollar spent on renovations and furnishings, most of which also qualified for bonus depreciation
The property was originally listed well above what the numbers supported. It had sat for a long time, the marketing was poor, and the seller was motivated. Suzanne and Sarah identified the gap between asking price and actual value, negotiated a significant discount plus a seller credit that covered closing costs, and the deal closed with the seller also completing about ten thousand dollars in repairs.
In its first full year, the property is projected to cash flow — ahead of even conservative early estimates.
The Bottom Line for Central Oregon Investors
This market rewards investors who do the work: running real numbers, writing offers that reflect what actually pencils, and building a team that includes a knowledgeable agent, a lender who understands investment financing, and a CPA who knows cost segregation. The sellers who need to move are out there. The deals that work are findable. The financing structures exist. You just have to be willing to start the conversation.
If you want to go deeper on any of this — private money, creative financing, or how to analyze your first or next deal — check out the PRIMO Private Money Academy. And join us at the next monthly COIN investor meetup in Bend, where we work through real deal scenarios together. Details are on our site and in the weekly Real Deal email. If you're not on that list yet, get on it.
