Summary: Jordan Tietz started as a CPA with no real estate background. A decade later he's permitted and developed over 120 units right here in Portland - ADUs, fourplexes, sixplexes, apartment buildings, and cottage clusters. At a recent Portland real estate investor meetup, he shared the unfiltered lessons he's learned through trial, error, and a few expensive mistakes. This article captures the most practical insights from that conversation.

⏱ 7-minute read

ADUs, Cottage Clusters & Portland Development: Real Lessons from a Local Investor Who's Done 120+ Units

Jordan Tietz didn't start as a developer. He was a CPA who got tired of calling his realtor every time he wanted to see a property - so he got his real estate license. Then he started building. Over the past decade he's permitted and developed more than 120 units in Portland, working through the city's infamously complex permitting process, surviving a brutal market cycle, and coming out the other side with a clear-eyed view of what works and what doesn't.

At a recent Portland real estate investor meetup, Jordan shared the lessons he's learned - openly and without the polish of someone trying to sell you something. What follows is a distillation of that conversation, presented here by the team at Uptown Properties because we think it's exactly the kind of ground-level knowledge that's hard to find anywhere else.

Start With Zoning - Everything Else Follows

Jordan's first principle is deceptively simple: learn the zoning before you evaluate any deal.

"If you know the rules, if you know the zoning, then you start seeing opportunities everywhere," he said. "Deals that don't make sense for other people start to suddenly make sense to you."

In Portland, residential zoning determines how many units a lot can support, what setbacks apply, and what types of structures are permitted. The city has been upzoning steadily over the past decade — zones like R20 and R10 that once limited density to one unit per 20,000 or 10,000 square feet of lot have been liberalized significantly. Today, virtually any lot in Portland can accommodate up to four units, and certain lot sizes can support a house plus two ADUs.

The key lot size thresholds for ADUs in Portland:

• Smaller lots support a house and one ADU
• Larger lots (depending on zone) support a house and two ADUs
• At the most dense zone (R2.5), a 1,500 square foot lot can support a house and potentially two ADUs if the rules are met

"If you can take any site and see there's actually a lot of creativity - a million things you can do - that's where the opportunity is," Jordan said.

The Four Ways to Add an ADU in Portland

Portland allows ADUs in four configurations:

1. Conversion of existing space - turning a basement or portion of the house into a separate unit
2. Attached addition - adding onto the house to create an ADU that shares a wall
3. Accessory structure conversion - converting an existing garage or outbuilding into a livable unit
4. New detached construction - building a brand new standalone structure on the property

Jordan's recommendation for most people right now, particularly in a tighter market: start with the lowest-hanging fruit.

"The cheapest and least complicated thing is to convert something that already exists," he said. "Maybe the basement already has a half bath. Maybe it's already insulated. You might not have the same margins, but it's probably the safest thing."

New detached construction offers better margins but comes with more complexity, more cost, and a longer permitting timeline. Jordan's rule of thumb: if you're building to sell and building for profit, new construction is likely the path. If you're building to cash flow or offset your mortgage, converting existing space is usually the smarter starting point.

The Numbers: What to Expect

Jordan was candid that construction costs vary widely and that anyone quoting you a firm number without seeing your specific site and plans is just talking.

His current build cost with his established builder: approximately $175 per square foot. His general guidance: if you're in the $200s for new construction, you're probably in reasonable territory. If someone's quoting you $400 per square foot, "they probably have a really nice website," but the numbers may not work.

He gave a straightforward example of the investment math on a typical ADU:

• Cost to build: $250,000
• Monthly rent: $1,800
• Annual return on cash: approximately 8–10%

"And it'll also improve the value of your house," he added. "It's not like that money disappears."

For basement conversions with lower upfront costs - say $50,000 to convert an existing space - the return can be significantly stronger. At $1,500 per month in rent, you're recovering your investment in roughly three years.

ADUs vs. Cottage Clusters: Understanding the Key Difference

One of the most valuable parts of Jordan's presentation was his explanation of why he's shifted away from ADUs toward cottage clusters as his primary development strategy.

ADUs are capped at 800 square feet in Portland and are subject to a 40-foot setback from the street. If you want to sell an ADU separately from the main house, you can't formally subdivide the lot through the city - the only option is a condo registration through the state of Oregon, which works but carries a stigma with buyers, requires a homeowners association, and can reduce resale value and buyer financing options.

Cottage clusters change the equation. They can be up to 1,400 square feet per unit, can be built on their own subdivided lots using Portland's Middle Housing Land Division process, and don't require condo registration. The result is individual units with their own lots, their own water meters, and no HOA - which means comps to single-family homes rather than condos, and significantly stronger resale values and financing options.

"Had they been condos, they probably would have sold for $50K less," Jordan said of a recent fourplex he completed. "We'd have had to have a $300 HOA and it would have hurt people's buying power."

Portland's Middle Housing Land Division - introduced a couple of years ago - was described by Jordan as "revolutionary" because it allows land division to happen in conjunction with the building permit process rather than sequentially, which used to add years to project timelines.

Cottage clusters can go up to 16 units per project, though lot size is the practical limiting factor. On a 5,000 square foot lot you might add two. On a 12,000 square foot lot, Jordan is currently building nine.

Finding a Builder - The Most Important Relationship in Your Project

Jordan was emphatic on this point: the builder is the central relationship in any development project, and finding the right one takes time and shouldn't be rushed.

"Without the builder, it's kind of like a chicken and the egg," he said. "But it's also kind of hard - a builder won't really meet with you until you have plans."

His advice:

• Start with an architect before you approach builders - the architect is your due diligence partner and should be helping you screen deals, not just yes-ing everything you bring them
• Look for builders through referrals from hard money lenders, who have seen multiple builders perform under pressure
• Ask to visit an active job site and speak to previous clients
• Prioritize character and integrity over price - the quality of the person matters more than the quote

"My architect is my teacher," Jordan said. "Without my architect, I wouldn't be here at all."

He also noted that the City of Portland has published pre-approved ADU plans on their website - designs sourced from the City of Eugene - that have already passed design review and can accelerate the permitting process for those who don't need a fully custom design.

Financing: Match the Money to the Timeline

Jordan walked through several financing options for ADU and small development projects:

• HELOC - his top recommendation for owner-occupied properties. Lower interest, no immediate repayment pressure, and the rental income from the ADU can often service the debt comfortably.
• Private money - viable but comes with short payoff windows that can become stressful if the project takes longer than planned or the market shifts.
• Hard money loans - common in development, typically used for acquisition with the ADU or construction financed separately.
• FHA 203(k) rehab loans - available for certain owner-occupied renovation and ADU projects.
• Unsecured personal loans - Jordan admitted he used a $25,000 personal loan from LightStream to fund his first ADU, applied for just before leaving his job. "There's no shame in it. You do whatever you want. It worked out."

His core advice: prioritize money that doesn't require fast repayment. "The only real question is - if everything went sideways, can the project cover itself? That's the only question that really matters."

The Critical Technical Details Landlords Often Miss

For those converting existing spaces into ADUs, Jordan flagged several technical requirements that regularly catch people off guard:

Electrical: Separate panels or sub-panels are required for each unit. You cannot run the house and the ADU off the same panel.

Heating: Each unit must have its own heating system. A single furnace serving both the house and the basement ADU is not permitted. Jordan's practical solution: "Demo the whole furnace and put mini splits everywhere. Call it a day."

Fire safety: If the furnace is in the basement and you're converting the basement into an ADU, access to that furnace becomes a problem. This is a major planning consideration before buying a property with ADU conversion in mind.

Separate addresses and utilities: Units that have separate addresses and utility accounts are significantly more desirable to tenants and cleaner to manage as a landlord.

Verify the ADU is legal before buying: Jordan warned that many properties are marketed with ADUs that aren't formally permitted. On PortlandMaps, a legal ADU will show a separate building permit, a separate address, or appear listed as a separate unit. "A lot of realtors might not know how to double-check that, and the city's slow to get back to you, so you might not find out during your inspection period."

What Jordan Wouldn't Do Over

When asked directly what he'd do differently, his answer was unfiltered.

"I probably wouldn't do any more apartment buildings," he said. "I'm holding the bag on two. Interest rates went up, expenses went up, and now it just doesn't work. When you own apartments, everyone values them by NOI. You can't hide from the truth of the numbers."

His current philosophy: build products that can be sold to consumers, not just investors. Cottage clusters and well-located small units with quality finishes appeal to buyers based on lifestyle and emotion, not just capitalization rates - and that gives you more exit options when the market gets difficult.

"If you can move into the realm of real estate that's not about the math for your exit, I think it protects you a lot," he said.

His other key lessons:

• Don't rush the team - the right builder is worth a year of searching
• Always start with the end in mind - know your exit before you start
• Cash flow should be able to cover the project on its own; equity is a bonus, not the plan
• In this market, location matters more than it ever has - be extremely picky

The Bottom Line

Jordan Tietz built a portfolio of over 120 units in Portland by going deep on one market, learning the rules thoroughly enough to see opportunities others missed, and building relationships with the right people - particularly his architect and builder. He's made expensive mistakes and learned from them. His current conviction: ADUs remain one of the most accessible and practical ways for regular Portland property owners to add density, generate income, and build long-term wealth - and cottage clusters are the more sophisticated version of that same thesis for those ready to go further.

"I think ADUs are kind of the great equalizer," he said. "It's a good way for a lot of people to start and not risk as much money or as much complexity."

This article is based on a presentation by Jordan Tietz of Jasmine Investments at a Portland real estate investor meetup. Content has been edited for clarity and length. Nothing in this article constitutes legal, financial, or construction advice. Always consult with a licensed architect, contractor, and financial advisor before undertaking a development project.

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