Portland, Oregon passes tenant screening criteria

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y

Your subject line and subject do not match. At all.

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  • Steve Milford
    Lender · Vancouver, WA · Member since 2015 · 482 posts · 316 votes
    7y

    @Jeff S.

    I use coxy.co, works great.

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    Your subject line and subject do not match. At all.

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  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    @Nathan Gesner yes I know Nathan. Somehow when I posted it picked up an old posting I started to do but never finished.

    When I figure out how to post a link to a Willamette Week article about just passed ordinances in Portland regarding screening and deposits I will post it.

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  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    https://www.wweek.com/news/city/2019/06/19/portland-city-council-passes-new-tenant-protections-aimed-at-helping-people-with-criminal-histories/

    Here is the link.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jeff S.:

    https://www.wweek.com/news/city/2019/06/19/portland-city-council-passes-new-tenant-protections-aimed-at-helping-people-with-criminal-histories/

    Here is the link.

     this is really wild.  one just needs to look at the demographics of the state or city..  these marginalized people she talks about make up less than 2% or so of the renter pool..  and now you are going to have states hone in on parole dumping.. We saw this in some parts of rural N> CA were rents were cheaper than a lot of the state .. and you ended up with these little cities with crime rates off the charts.. 

    Jeff in another thread I mentioned there is a big hedge fund tape on the market of 150 SFR's in Portland proper.. for sale. And as I shopped it around talking to some of the experts in rentals in the city.. and you know who they are I am sure personally.

    the reply was tape would have to sell at 30% or more back of market to take on that amount of houses and all those tenants.. so what was at the time probably a great buy when they bought they waited a year or so too long to sell.. 

    Most of the new construction probably wont be affected as the initial rent rates will be over what those marginalized and Ex cons can afford.. but if they start to require ( like parts of CA) that new projects have to have a certain % of this type of housing available then investors just may think twice about the PDX market. it will sure make the surrounding cities MF that much more desirable.  

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  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    These are our biggest fears realized @Jay Hinrichs. The problem lies in the multi's because of the havoc a bad tenant can cause. I have been successful because of the way I screen tenants. Guess I will sell if/when I feel forced to rent to someone I don't want. This makes a case for upgrading though; maybe low cost rentals not the way to go anymore?

    This disparate impact thing has some merit from a legal perspective because employers have had to deal with this for a while @Nathan Gesner This is the same thinking that brought banks to their knees in attempting to get everyone to buy a home. Who cares if landlords are brought to their knees though. 

    Certainly anyone who has a large mortgage(s) is at risk.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    Jeff,, maybe being the bank is looking better to many investors.. in the city of Portland. 

    its so funny how regional this stuff is.

    right after Katrina.. I hauled my banker from Portland  down to Biloxi to look at a MF that had taken on 8 feet of water it was 200 units of course vacant.. mold growing like heck etc.

    So this was funny and I will remember it forever.. My banker ask the agent what is the tenant mix from HUD assit and open market..

    Agent kind of looks at him funny and Says Boy its ONE HUNDRED % HUD.. we were floored and the agent was floored that we would not know that..

    there are astounding numbers in Mississippi at the % of the population that is on some sort of assistance.. its over 50%. 

    were as here in our market you have some section 8 but its not with 50 to 60% of the tenants. 

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  • Terrell Garren
    Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
    7y

    I wonder how many of her own properties Commissioner Chloe Eudaly has rented to criminals with a 500 credit score and 2.5x income to rent ratio?  

    4Reply
  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    She is a renter @Terrell Garren as are many on the Rental Services Commission.

    0Reply
  • Terrell Garren
    Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
    7y
    Originally posted by @Jeff S.:

    She is a renter @Terrell Garren as are many on the Rental Services Commission.

     I wish I owned her building. I'd put Albert AxMurderer and Bonnie Burglar on either side of her.

    5Reply
  • Susan Maneck
    Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
    7y

    "Agent kind of looks at him funny and Says Boy its ONE HUNDRED % HUD.. we were floored and the agent was floored that we would not know that.. "

    There are apartment complexes in Mississippi that get tremendous tax breaks because they cater to low income families. But HUD vouchers for SFH have a long waiting list and most people wait years to get them. I should say I've had pretty luck with Section 8 tenants, they do not want to lose those vouchers once they get them. I've had one ex-con (not section-8) he is my oldest tenant and one I can often call on when I need something fixed. He's in his fifties however, and a family man. If he had been a younger man I probably would have been more reluctant to accept him. The fact of the matter is that there are a lot of poor people in Mississippi and if you use the usual criteria you will likely end up with empty property. One thing I do insist on is that they don't have history of evictions and they have an income three times the rent.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Susan Maneck:

    "Agent kind of looks at him funny and Says Boy its ONE HUNDRED % HUD.. we were floored and the agent was floored that we would not know that.. "

    There are apartment complexes in Mississippi that get tremendous tax breaks because they cater to low income families. But HUD vouchers for SFH have a long waiting list and most people wait years to get them. I should say I've had pretty luck with Section 8 tenants, they do not want to lose those vouchers once they get them. I've had one ex-con (not section-8) he is my oldest tenant and one I can often call on when I need something fixed. He's in his fifties however, and a family man. If he had been a younger man I probably would have been more reluctant to accept him. The fact of the matter is that there are a lot of poor people in Mississippi and if you use the usual criteria you will likely end up with empty property. One thing I do insist on is that they don't have history of evictions and they have an income three times the rent.

    Our experience in Jackson with section 8 does not mirror yours.. plenty of those tenants trashed our houses and just took their voucher to the next house.. the housing authority wont pull it for those reasons.. I have been funding south Jackson since 2002 .. and owned a few hundred of them and sold out 5 years ago.. its just a tough go .. and not something I care to do anymore long term.. but I get it for the mom and pop investor.. and I still fund deals there got paid off today on one.. for others I just don't want to own them more than 90 to 120 days take some profit fund the next one for a landlord.  

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  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    Everyone has a niche and this is destroying our ability to do that. There is more money in S8 with cheap apartments if someone wants to work them. I was talking to a guy has units in Rockwood says he doesn’t need security because the cops are there every night and the station is close by. He is a very wealthy individual. My niche has been long-term renters with perfect credit, jobs and no drama. Like a bank that gives lower rates to better customers I don’t raise rents to the max, and there is no drama. It is adopt to survive so will see where this leads. I can do cheap apartments too as people like me will eventually be extinct. Low cost housing will be forced and paid for by taxpayers. Tough on the middle class working renter IMO.

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  • Account Closed
    Rental Property Investor · Portland, OR · Member since 2017 · 26 posts · 16 votes
    7y

    So, that means landlords can't use a minimum income requirement at all? I've had applicants that have a monthly income less than the rent. Would I not be able to reject them based on that?

    Meaning I can choose to not use that criteria as long as I document what my own criteria are? Don't all landlords do that anyway? I'm not sure how this changes anything. Am I missing something?

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jeff S.:

    Everyone has a niche and this is destroying our ability to do that. There is more money in S8 with cheap apartments if someone wants to work them. I was talking to a guy has units in Rockwood says he doesn’t need security because the cops are there every night and the station is close by. He is a very wealthy individual. My niche has been long-term renters with perfect credit, jobs and no drama. Like a bank that gives lower rates to better customers I don’t raise rents to the max, and there is no drama. It is adopt to survive so will see where this leads. I can do cheap apartments too as people like me will eventually be extinct. Low cost housing will be forced and paid for by taxpayers. Tough on the middle class working renter IMO.

     maybe you do long term contract of sales. this would skip the whole renter landlord debate and rules.. give you the long term cash flow you want.. lock in equity which has kind of peaked .. and pay your tax's over long period of time.. if they fail you get it back and do it again. ??? 

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  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    @Account Closed it is very complicated if you choose to not use their criteria. I am sure there have been changes to the original suggested plan and I have not seen the final copy of the ordinance so my understanding is not up to date.

    The last I heard they were going to use a point system so if someone has 2 felony convictions in the last 7 years they might lose 5 points per conviction and end up with 0 points but if they attend a rent well class you can add 5 points. If they have a job you can add some points etc. You must rent if over a certain amount of points like 5. If you deny them then you need to explain why and give them a second chance. All this takes time and ties up your property.

    There is more...yet to be learned from final draft.

    0Reply
  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    @Jay Hinrichs I am not opposed to carrying paper on the right deal. Am a little leery as I still remember my RE broker had notes for wallpaper in his office in the early 80's. Used to take notes for commissions and then discount and guarantee them to pay rent with. Our landlord loved them.

    Funny stuff about Biloxi. Guessing your Portland banker wasn't into the flooded S8. That would take some serious talent to correctly estimate that fix up job.

    The better deal would be to 1031 into something then sell on terms. Taking the upfront tax hit to buy notes painful to say the least.

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  • Susan Maneck
    Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
    7y
    @Jay Hinrichs:

    I don't recommend anyone invest in South Jackson that doesn't live here. And as I understand it most of your houses were north of Mcdowell which is a rougher area. I only own one house there and it is rented by an elderly couple with a voucher. He is blind, she has lupus. I build a ramp for them and for that reason HUD gave me 10% increase in the rent above market value. Blind people don't like to move so I suspect they will stay there a long time. Afterwards I will probably try and get rid of that property because the neighborhood has gone downhill. 
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jeff S.:

    @Jay Hinrichs I am not opposed to carrying paper on the right deal. Am a little leery as I still remember my RE broker had notes for wallpaper in his office in the early 80's. Used to take notes for commissions and then discount and guarantee them to pay rent with. Our landlord loved them.

    Funny stuff about Biloxi. Guessing your Portland banker wasn't into the flooded S8. That would take some serious talent to correctly estimate that fix up job.

    The better deal would be to 1031 into something then sell on terms. Taking the upfront tax hit to buy notes painful to say the least.

     I get it on tax hit.. but sometimes you make the money back in a few years and your not forced into a deal you maybe don't like.. but with the way OR and WA are going vis a vi pinning down landlords you maybe forced to out of state and that my friend is a different animal altogether..  Notes today on Portland homes with owner occ will be about as solid a note as U can get and keep in mind foreclosure here are 7 months or less. 

    Yes my Banker and I have been all over.. when I launched in Detroit I took him a long.. as a lifelong Porlander it was a culture shock to say the least.. we pull into the PM's office south of 8 mile.. parking area is fenced in with razor wire..  walk through the mud room and there is a wall with pistols the PM's check out.. then the front of the office had a bankers teller type situation for rent with bullet proof glass no less and then of course the front window was busted out  happens weekly he tells me .. disgruntled tenants.

    When doing rehab he had to have retired police officers on site they checked ID and sign in for any subs coming in to work.. they determined if it was not the neighbors stripping the house it was the workers that worked for the subs.. made sense they knew what they put in that day Knew the lock box code came back at night and poof. 

    its another world out there it aint portlandia..

    I also took my banker a few times to Jackson MS where we were the largest HML in the market at the time.. down to south Jackson through west Jackson.. there was a church there and the church van was in the middle of about a 2 acre parking lot surrounded by chain-link with razor wire on top of it and flood lights so the thieves had to be out in the open and then deal with the razor wire big Baptist church LOL..

    in the mid 80s I lived on my commission notes.. I will say mine paid.. but our market at that time in the Bay area was quite a bit better than the PNW.. many don't realize how bad it was mid 80s seattle Portland.. if Boeing got a cold the economy tanked.. timber was in the dull  drums all pre tech..   any way this is your thread so hopefully its enjoyable to go down memory lane.. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Susan Maneck:
    @Jay Hinrichs:

    I don't recommend anyone invest in South Jackson that doesn't live here. And as I understand it most of your houses were north of Mcdowell which is a rougher area. I only own one house there and it is rented by an elderly couple with a voucher. He is blind, she has lupus. I build a ramp for them and for that reason HUD gave me 10% increase in the rent above market value. Blind people don't like to move so I suspect they will stay there a long time. Afterwards I will probably try and get rid of that property because the neighborhood has gone downhill. 


    Susan when I started lending early 2000s in Jackson 100% of my loans were to retail flippers.. IE buy house sell it to homeowner.. and it was all Sojack north and south of mc dowell  cooper road all through there .. then financing got tougher and investor started buying for rentals then Katrina happened and you got a bunch of the low end tenants from New Oreleans and the locals moved out.. they moved up to north east Jackson if they could .. etc.. its a rental area now..
    I just got paid off on one that was out in the queens this week.. that area was not as good but it seems to have come back a little I fear though those areas given the quality of the buildings will just keep deteriorating over time.. there literally is almost zero activity for homeowners.. so that's just an issue.. now granted there are nice pockets of So jack nice ranchers on slabs etc.. but a lot of perimeter foundation cheap little houses as well.
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  • Susan Maneck
    Investor · Jackson, MS · Member since 2014 · 1k+ posts · 769 votes
    7y

    Actually property values went way up in my neighborhood due to Katrina because New Orleans doesn't fit here. People (mostly locals) got in over their heads buying those houses. The market crashed during the Great Recession but much later in South Jackson than it did in say Madison County. I bought my principle residence on Wooddell from HUD for 72K. After Katrina it appraised at $113K. During the Recession I would have had trouble selling it for 60K. That's when I decided I could either cry over being under water or buy up the neighborhood. I chose the later, and yes these are mostly ranchers on slab floors (which personally I hate.) My former principle residence is now barely returned to the price I originally bought it for, but since it rents for $950 I'm not losing much. I now life in a house about three blocks away which I bought for 30K. It appraised last year for 70K.

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  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    @Jay Hinrichs you have Portland notes?

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jeff S.:

    @Jay Hinrichs you have Portland notes?

    Nope we sell our houses for cash and carry.. no need to carry notes.. when I was doing land and timber in the 90s I carried quite a bit of paper on dirt.. and a few lease options on larger tracks with houses on them out in Yamhill  county and above Molalla 

    those larger tracks back in those days with nice homes on them were very hard to sell through conventional financing.

    IE banks would only lend on the house like it sat on 1 acre.. the rest of the 79 acres ( if it was an 80) they gave no value to.. 

    this is the niche we worked in.. lender wont lend on the land and timber.. buyers need financing to buy ( back then 300 to 600k props) only so many crazy Californians with a trunk full of cash right ? 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    Jeff my wife and I were talking about this on our drive out to sandy to take a lock box of one of her listings that just sold.

    she thinks its going to be a problem

    she thinks those are just the people who will sue.. or file complaints against landlords

    I said well its going to clog up the court system then or how ever or whoever looks into complaints and who has aurthority to administer justice ??? any Idea how they enforce this.

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  • Jeff S.
    OP
    Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
    7y

    @Jay Hinrichs however they enforce ordinances. They were nice enough to suggest the tenants bring lawsuits. Discrimination. Chomping at the bits to set case law. 

    Probably better to rent to whoever then evict.

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