All Forum Posts by: Kelvin Lee

I had the similar idea building an ADU in my Irvington primary. Several reasons I abandoned this project. 1) The construction cost 2) Property tax 3) The resale value and exist strategy. Last time I checked with my architect, the construction cost in Portland metro including labor and materials, architecture fee and permits costs about $150 to $250 per sq ft depends on the finishing. Check with the zoning coz you might be limited by the density. Adding ADU will trigger your property value evaluation by the county which usually ends up increasing the property tax for next year. Calculate if the rental income can sustain the mortgage, insurance and the new property tax yet generating positive cash flow at the same time. Consider how easy to find a buyer if you want to sell it or do 1031 exchange. Not all buyers enjoy sharing same space with tenant non do they want to become a landlord. Is it going to be a long term investment or you will sell it in few years?

I have used Sleepsound property management over 3 yrs on SFH and Multi. Good reputation and the owner of biz is young, up-to-date on tenancy law and pro-active.

Go talk to Andrew Holowetzki at JosephBernard (http://www.josephbernard.net/_) I have been using him for deals and mentor over 3 yrs. Very motivate, outstanding client services and smart young gentleman.

Just purchased the earthquake insurance thru FaXXers which covers up to $2.6 mil with 10% deductible at $3000 premium yearly. It also comes with $320k loss of income protection for one yr. I decided not to increase the coverage to 100% of currently property value as I probably won't survive at 9.0 

Talk to multi-family agencies ( don't think I can disclose their business name here ) and they have pocket listing that doesn't published publicly. By that, you can avoid bidding wars and take your time negotiating with the inactive sellers. I got the a sweet deal last year via pocketing listing and very much enjoyed the process. The two issues I had which had nothing to do with the pocket listing were the lender and the 45 days nomination of 1031 exchange. 

Any one here covers there properties with earthquake insurance? Will any one consider getting one in the coming year?

I have a lot in Forest Grove that I can build a 10 plex on it. Compare to buy an existing property which per unit price is about the same as building a new one myself, should I build instead of buying an existing property? 

Things that I have already considered are 

PROS

• Compare to City of Portland, City of Forest Grove is much developer friendly in term of building new apartment

• There will be less hidden physical issues compare to buying an existing property. 

• No existing tenant issue you need to deal with up front

• You create an opportunity yourself VS praying for the right deal to show up every nite

• Higher rent

CONS

• Zero income during the construction which would be about 9 months and another 3 - 6 months to fill the vacancy

• I need to pay out of pocket to cover the interest during the development

• Anything could happen during the construction phase...find an oil well 6 ft under during excavation

• I have enough knowledge to operate an apartment business but never build an apartment before 

Let me know if I missed anything.

I attended the NE Multi-Family breakfast weeks ago and there were 5 speakers gave speeches on the coming years in Portland market. Overall, investors either sellers or buyers are on the fence until the smoke is cleared on both rent control and no cause eviction subjects. One of the speakers mentioned Portland market is heading towards to the end of the 10 years cycle. That being said the property price will be going soft after 2017 when the market saturated with the new luxury units while these properties are still in development as I speak. 

My take is the City of Portland, the biggest landlord in Multnomah County, is the root cause of rent spiking drama. First, they refused to expand the urban boundary. Second, they raise property tax on everyone at a rate of over 10% plus. Third, the permits cost developer a fortune on new development. Now tell me who caused the Homeless crisis in Portland Oregon? 

I am for sure trying to avoid Multnomah county or tri- county at the moment and possibly consider moving my target to the upcoming area in Washington state. 

I am interesting in how investors in Portland Oregon respond to Tina Kotek and Ted Wheeler proposal. Will you be selling and moving the investment outside of tri-county or even out of Oregon if these legislation got passed State wise? What would be the worst impact to the current investors and property value in Portland OR and how are we going to cope with it as an investor? 

A short note of my background: I started a single family rental business in Portland OR in 2009, have done 2-times of 1031 exchange, and currently owning a property in Washington county.