All Forum Posts by: Tony W.

Quote from @Tony W.:

Quote from @Jeff S.:

Attorneys suggest and most property managers use what they call low barrier screening which allows people in who can barely afford  your place and they want to house people with criminal backgrounds suggesting you are discriminating if you don't give offenders a chance. There is a movement within business that is giving offenders second chances. Much of this is adopted statewide so there is that. I have turned 2 properties over to management one with good luck and one a little less so.

 Would you say there are no ways around resolving the issues you had with the low barrier screening with rentals in Portland in general

 @Jeff S., I'm curious why your attorney recommends the low barrier screening? 

The landlord choice option seems like the obvious one.  The main drawback being that you have to document, pretty extensively, why you have denied a tenant in writing, if they do not meet your criteria.  Multifamily NW has a good form for this:  https://www.rentalformscenter.com/preview?form=8358

Tony, Definitely look into the screening process for the City of Portland as it is very specific how you address it even down to how you advertise your property.

The State of Oregon has limitations on how much you can raise rent on existing tenants each year.  The City of Portland has provisions where the tenant can request relocation assistance if your rent increase is 10% or more.  I have never felt like I needed to come close to either of those maximums and just raise it to market rate between tenants.  Of course, I only have 1 rental property and don't operate it like some landlords would.

I rented my former house out when landlords were selling in the City due to the new laws that came about.  Most small landlords did not like the new requirements, so there are fewer of them operating here.  I think due to that, rents went up and kind of worked against what the City was trying to do.

Currently it seems like the market here is softening a bit.  I'm not saying rents are going down, but rather, they seem to be leveling off.  Also the pool of quality tenants appears to be smaller.  I think the ones that could afford to buy a couple of years ago, did so, leaving fewer potential tenants with good credit and income.  There are still good ones out there, but its not like it was.

In terms of what neighborhoods to invest in . . . take a look at the property taxes and keep in mind that the valuation will go up by 3% every year.    There are some neighborhoods that were valued really low when the measure to lock in the 3% increase was put in place, they were bad neighborhoods then (1997-ish), but now doing a lot better as they've attracted young, hip home buyers due to their affordability and the taxes are locked in at a lower rate for the 3% increase in valuation.  Some neighborhoods in North and Northeast Portland fall into this category, maybe somewhere like Brentwood-Darlington too.

People have missed a few big items.  First you can only remove tenants for very specific reasons.  So for example you can have a lease, but at the end of the lease you can't ask them to leave.  If you sell and the person buying wants to live there you must write the tenant a $4500 check to relocate and then give them 90 days.  If they don't leave you have to go to court to get them out .

Etc..

@Tony W.I have 2 rental properties left in Portland, OR. One a duplex and one a SF. I keep them because I gave good super long term tenants. I sold a favorite during the pandemic a duplex because when I was able to get it vacant I rehabbed it and was concerned with the way the city of Portland was treating landlords.

The Hawthorne district has always been a favorite with lots of younger folks. I have owned there and I have owned in Lents. Lents not so great.

I did a 1031 out of Portland into Hillsboro and am having a good experience.

Attorneys suggest and most property managers use what they call low barrier screening which allows people in who can barely afford  your place and they want to house people with criminal backgrounds suggesting you are discriminating if you don't give offenders a chance. There is a movement within business that is giving offenders second chances. Much of this is adopted statewide so there is that. I have turned 2 properties over to management one with good luck and one a little less so.

Again I recommend Investors Lab to find like minded investors who have and are doing well in Portland. It is a very dynamic group. I would start there.

Not sure what I will do when I get a vacancy. Many are putting lots of money in places to max out the rent in hopes of getting good tenants. Portland has been good to me appreciation wise and long term may but questionable politics...??

Just wanted to say hi, my primary residence is in West Linn, and thinking of buying my first investment property, probably sticking close, like OC, Gladstone, Tualatin or Wilsonville.

@Tony W.in regard to how "do I feel". Me personally, I feel a 4plex with as low down as possible, that still has a suitable debt service in relation to the income makes sense to me. I mentioned 4plex because it's probably the highest amount of leverage one can get on their first investment. It's still essentially "newbie" investing, management is pretty simple, maintenance isn't at a scale that's too difficult and you'll get the best economies of scale. So it's purely a mathematical opinion, which is why I mentioned it. I think you should do what's best for you. I would say, an existing 4plex would be much simpler than ground up duplex. Ground up, expecially in our area, is not for the faint of heart. It takes skill, expertise, time and most importantly, liquidity. Also, getting the construction loan once permits are approved requires experience, from most lenders. So that should be factored in as well. 

@Tony W. tertiary markets have been strong for a long time, like 9 yearsish time. Demographics are a cycle, almost every demographic (economic and population) has seen the tertiary markets of Portland outpace Portland the past year or so. So yeah, if you want to house hack in a tertiary market, that's a solid option. 

My 2 cents on house hacking

1) Find a property where you want to live short term and rent out long term. If you really want to be a real estate investor (buyer), be where you get excited. Make relationships in that area and go buy some real estate. 

2) The tertiary markets are most likely going to have a higher property tax per unit because of the way our property taxes work. It's a big factor for me and why I invest almost exclusively in the **** hole neighborhoods of the 90's. Way better tax to purchase/rent ratio. 

3) Small plexes are a great way to maximize leverage, lower cost of debt and maximize economies of scale. That's one thing I would go back and teach myself if I could.....my first purchase would've been a 4plex and would've signifcantly changed the route I went and experience I earned my first 8 years. 

@Corby Goade man, I know, it's insane. Just drive around Portland. Yep, no one's making millions of $'s anywhere around here. Can't do it. Not possible. 

It's better just to cChange your entire life and learn about a market you've never even been to, have no relationships in and would literally be starting from scratch. 

As everyone else states, I think the first question would be "what kind of real estate investing suits me?". I have one client that is looking for a live-in flip and hates the idea of ever being a landlord. If you're open to house hacking, a duplex in Oregon City or the surrounding areas might be a nice way to start. 

Depending on your finances and goals you'll be able to narrow down location. If you are looking for a flip and have a good budget, Lake Oswego might be a good choice for you (homes tend to be pretty pricey there) - if you're looking for a more affordable long-term hold, Oregon City, Clackamas, Milwaukie, Tigard may have something that suits you. 

If you need any help looking in those markets, let me know! I'm a realtor that works out of Clackamas (Sunnyside), but lives in West Linn. I spend a lot of time in these areas. :)

Good luck!