All Forum Posts by: Account Closed

No animals or people allowed who  are aggressive or destructive to people, animals, or property. There are plenty of aggressive/destructive 20 pound dogs, and many calm well-behaved individuals that happen to belong to a stigmatized/prejudged group. 

If you're going to prejudge an entire group of individuals, the most predictably problematic group are puppies. Puppies chew stuff up and pee on things, and their personalities are still fluid. My dog's temperament changed (to more aggressive) after 10 months. 

Looking forward to finally meeting the infamous Ms. Jensen!

(For the elucidation of all present, Google calendar just aurocorrected Mindy's name to "Money Jensen." Secret identity revealed!)

Whitney, I'd take out of area responses with a grain of salt. I've been a landlord in Portland for a few years and I'm also an interior designer. If you want to message me, I can let you know what you might get in rent, and ways you could add value. For example, it sounds like you've actually got a "4 bedroom." 

OC is only going to appreciate once the waterfall project is done, and more millenials make babies and can't afford Portland/don't want to send their kids to PPS. 

Also, are you sure STRs are *illegal* in OC? In the city of Portland people just need a permit. And depending on zoning, you could convert it to a proper BnB. 

Selling now may not be the best choice for taxes. If you own it for 2 years as your official primary residence (where your driver's license and voting is registered, oh and where you officially live, of course), you'll qualify for the capital gains exemption up to $250k when you sell.

Sometimes just having another pair of eyes helps to uncover your options. Feel free to message me the address and some images. I'm not a PM or Realtor so I've got nothing to gain, just want to help if I can.

@Jonah Geil to add to what @Mathew Wray said, it depends on your risk tolerance. I know a lot of buy and hold investors who wouldn't have a huge problem buying a bootlegged triplex. If you don't plan to sell anytime soon, then you don't necessarily have to worry too much about what happens when you sell it.

That said, the Residential Infill Project is in the works, scheduled to go before City Council in May. It's going to pass in some form or another. In a nutshell, it will allow triplexes or duplexes + one ADU in some areas. The current (a) overlay is completely different from the new RIP (a) overlay. If the house is in the new RIP (a) overlay, then it's in the "housing opportunity" zone and would qualify for [currently] up to a triplex. (Search for "map app Portland to find if that location is in the zone.)

Some small developers and I met with 4 members of the Planning and Sustainability Commission yesterday to urge them to allow up to a 4-plex in R5, expand the housing opportunity zone to all areas of Portland, and to increase the proposed allowable FAR (floor area ratio) to at least 1.0 (current FAR in the RIP would only allow a .5 FAR, or a total of 2,500 square feet of building area for a 5,000 square foot R5 lot). Maybe some of our suggestions will get passed on to Council in the final proposal. Maybe.

In essence, if you're planning on developing RE (which is what you'd be doing if you try to permit an unpermitted triplex) in Portland, you may want to become intimate with the RIP, Better Housing by Design project, and Portland zoning in general.

Lastly, Oregon building code currently considers triplexes to be commercial real estate, meaning they must have sprinklers and more robust firewalls; there's currently some momentum to change that at the state level, but you know how fast/slow these things can be. If you try to permit a triplex now, you'll want to consider those extra building costs.

If it were me, and the deal was too good to pass up, and I was already in contract, I'd bring up the permitting costs (including the extra costs for commercial buildings) with the sellers to negotiate down the price. Then I'd continue to rent it out to existing tenants (assuming it's in good shape), and wait and see what happens at the local and state level re: RIP and Oregon triplex building code.  If the laws change to something that would benefit me (e.g. they increase allowable FAR in the RIP, and the building code allows triplexes without sprinklers), then I might consider permitting it.  

Alternatively, you could convert to a legal SFR + ADU now by merging 2 units. If, for example, you can create a 3/2 instead of 2 one bedroom units, This may actually net you more rent. You'd want to do the math/research. (And it wouldn't necessarily preclude you from turning it back into a triplex later.)

I'd avoid doing anything that could jeopardize safety in any area that the tenants occupy/use (you may also want to check with your insurance company about what's covered if someone gets hurt during renovations).  And @Andrew B. is right; anything you renovate with tenants in place will look worn by the time they move out.  I learned this the hard way by buying inherited tenants all new stainless appliances in 2016.  When they moved out in 2017, those appliances had taken a beating.  

Another unit desperately needs a new shower surround, since someone had tiled on top of drywall.  They also need a new shower valve.  To do this work would take 3-4 days so unless I put them up in a hotel or they go on vacation, I can't do it.  The last time they went on vacation for 4 days, I did a complete kitchen remodel (flooring, cabinets, countertops, paint, etc.).  

Whatever you may save in $$$ by trying to renovate with tenants in place could bite you in the rear in terms of stress, frustration and, possibly, $$$ if they decide to move out.  

Surprised no one has mentioned that you can put a duplex on a corner R5 lot. Also check both Portland maps and the map app (search map app Portland) to see if there happens to be a dashed line and you can do a lot confirmation, and/or whether zoning is changing. 

If you submit plans now, you might be able to squeeze through with current zoning and not be subject to the 2,500 square foot (actually .5 FAR) maximum. Meaning you could permit a 3,500sf SFR and convert existing house to the official ADU (if it's situated on the lot in a certain way).

I've seen builders somehow manage to split a corner 5k sf lot in R5 into two 50x50 lots, each with a large detached SFR. Lot division, not confirmation. My guess is they used a loophole of the duplex rule and instead put 2 houses in.

If you can do that, what I saw this other builder do (in the 500 block of N Morgan St) is make the ground floor its own guest suite with living room, bedroom, and bath, but no kitchen.

It would be rad if you could permit this ASAP, then after the RIP, go back in and permit each guest suite as an ADU. That's 4 units on what was one regular R5 lot. But you'd have to act fast.

Also R2 may confer relatively little advantage after the "Better Housing by Design" zoning is enacted (unless you want a bunch of microunits). BHD will halve allowable FAR in that zone, but eliminate unit maximums. So you'd be able to build up to 5,700 total square feet on the whole lot, as many units as you want, with caveat that a building over 19 units is subject to IZ. 

Still, that's less square footage than R5 would allow today, pre-RIP. 

My opinions about solar on investment properties have "evolved" since I first posted on BP about the topic.

TLDR: Probably not worth it for rental properties, even with tax breaks, because of the cost/payback period, and the complication for tenants. Unless you are doing it for ethical/environmental reasons, then go for it.

MORE: I have 2 separate solar systems that offset 100% of the electricity for each unit of a duplex I own. Systems were "free" to install, but it's a lease, so I still pay the company (SolarCity/Tesla) for use of the panels, just at a lower rate per kWh than what the power company would charge. Essentially, it's the same monthly rate as if I'd purchased the systems and financed them over 20 years.

When the solar was installed in 2016, I lived in one unit and rented out the other. It made sense for me, since I have an electric/gas hybrid car and, well, I was living there. After I moved out, I still paid the solar lease, but I also had to compete for tenants with surrounding rentals that didn't have the added expense of the solar.

I figured out a way to structure tenant leases so that I wasn't simply paying for my tenant's electricity, but . . . it's complicated and tenants don't really understand it at first. You have to sell them on the idea. I keep the electricity bill with the power company in my name (because net metering erases all annual solar credits whenever the bill changes names) and put the monthly connection fee ($10) on autopay. The solar covers all the tenants' electricity (UNLESS the tenants start a grow op or try to get around gas heating costs by using space heaters. More on that later.)

To be marketable in my rental listings, I list the price I'd charge if I weren't paying for electricity, state that tenants pay for electricity, and in the description write, "ask us how the solar works." Then when they've seen the (beautiful!) property in person, I can explain, before solar was installed, the electricity averaged about $75/month, but now solar offsets 100% of their electricity needs. I tell them that I have a solar lease that I pay each month, so their cost for power (e.g. $65/month) reimburses me for that lease and is less expensive than what they'd otherwise have to pay the power company. I tell them, it's a flat rate each month, but if they use more electricity than the panels can produce, they are responsible and will get billed for the grid power ("but that's never happened to any tenant in the past, and unless you have a grow-op in the garage, haha, it's not likely to happen to you" <smile>). That disincentivizes them from wasting energy. Or growing weed.

Anyway, I'm also paying SolarCity each month, so solar isn't exactly saving me any money at this point. There are also laws in Oregon that if you pay for utilities, you can't charge tenants more than what you pay. (This is a gray area with a solar lease, however, since I'm paying a lease, not for power.)

Oh, and yes, I still am eligible for the state and federal tax credits (no more new Oregon state credits for solar effective 2018), but I haven't been able to claim them fully because I didn't have enough taxable income (and the state credits can only carry forward one extra year). So that's something to think about too, if you have a good accountant. ;) 

All that said, if you want to save the planet, and your roof isn't shaded by trees, please get solar.

Portland's own Kol Peterson just wrote the book on this:  

https://accessorydwellingstrategies.com/backdoorre...

In fact, there is a book launch party this Tuesday. 

He also maintains a very informative website: http://accessorydwellings.org

If you attend the book launch (Google the book title on eventbrite), you'll be able to ask Kol about your specific situation. 

Without having read every word of every post above, some quick thoughts: 

You may want to reconsider that R3 zoning. The residential infill project is changing what can be built on individual tax lots this year. Google "map app portland" to find how zoning will change for any particular address. The RIP will not apply in any multi dwelling zones so you may be able to do more in R5 with the RIP overlay than in R3. (R1 or commercial zoning, different story.)

Second, even though all my properties are in Portland proper, I will probably be looking outside of Portland in the future. The political climate is becoming increasingly anti landlord, and I do not want to entrust my assets to the personal whims of any city counsellor. Places I would be looking for are in Milwaukie, Oregon City, Clackamas, Tigard, West Linn, and Beaverton. Google "housing state of emergency," "relocation assistance," and "security deposit reform" along with "Chloe" tacked onto any of those searches. (I'm not putting her last name here because I'm sure she has flying monkeys scouring the internet, looking for their next victim.)

Also, Beaverton is much closer to downtown Portland than is Gresham. Map it out on google and you will see. I'm surprised that more people don't move to Beaverton because the schools are better than Portland and it is literally a 10 minute drive to downtown Portland without traffic.

Anyway, look up the Residential Infill Project and its effects on our zoning. Then look up "Better Housing by Design," the city's multi-dwelling zone sister project to the RIP. 

I'm not a fan of either of these projects because they literally halve the allowable FAR in both the single and multi dwelling zones, which is the opposite of what Portland leaders should be doing as 100 people immigrate to the city each day. 

I've seen some decent modern infill spec construction by Anamic Construction. I don't know them. I've just walked some of their open houses and thought they did a decent job. They have done zero lot line duplexes and ADUs so they seem to know the particulars about Portland zoning. You could get in touch and find out what they've got in the works.