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All Forum Posts by: Mike Meerschaert

Mike Meerschaert has started 5 posts and replied 14 times.

Post: Mold detected in basement

Mike MeerschaertPosted
  • Portland, Or
  • Posts 14
  • Votes 8

Thank you for all the replies, I'm sorry I didn't see them show up for some reason and was just notified about them! The situation resolved itself because they decided to move out, and as a precaution I took up the new flooring, installed a vapor barrier, and installed new flooring on top (painful since I had installed it all a year before, but in the end it really just came out to a few months profit).

The whole experience with these tenants also motivated me to find a good property manager, who is now managing the place. They got it fully leased up and everything has been running smoothly with $2k net income after expenses and mortgage per mo. on a property I put $180k into (rehab + down payment), so I'm very happy with the resolution. Onward to the next one!

Post: Mold detected in basement

Mike MeerschaertPosted
  • Portland, Or
  • Posts 14
  • Votes 8

Hi,

I'm looking for some advice from my fellow landlords. I have a rental property in Portland with a finished basement - I managed the remodel myself, everything is up to code, and it was completed in May 2022. 

There was recently a water intrusion event caused by a clogged drain outside which caused some hydrostatic pressure in the soil and some water came up through the slab, which the tenants promptly cleaned up and I ran a dehumidifier I rented from home depot for 24 hours. The tenants were understandably concentered about the possibility of mold growth resulting from the water intrusion, so I had a test done which detected some mold. They had a separate test done by another company which also detected some mold. I had a remediation contractor come out, and he told me the levels on the report is what he'd expect from a basement in Portland, and any amount of washing / bleaching wouldn't reduce the levels much long term as more moisture would enter the space up from the slab because concrete will always give off some moisture, and he couldn't really recommend much remediation. Also, there is no visible mold and no mold smell in the basement (there is a little on the caulking beneath a single pane picture window upstairs which I'll deal with).

That didn't sit too well with the tenants as they have been looking online and finding information about how dangerous it might be, and it didn't help that the first report that I had done the inspector attached a boilerplate message recommending a full HVAC cleaning (ducting is 1 year old) HEPA vacuum, air scrubbers, double washing everything in the unit with bleach, etc. so now the tenants are being fairly combative and insisting that more needs to be done. When the contractor was there they even came downstairs and started demanding to know exactly what steps would be taken (hands on hips, scrunched up face to give this some color). My issue is that in the opinion of the remediation contractor (who has a financial incentive to recommend as much remediation as possible) all that wouldn't reduce mold levels long term, due to the fact that it's a basement in Portland, and the levels on the report are extremely common in basements in the area where no water intrusion had happened. He even went so far as to say it's one of the cleanest finished basements he's seen. For reference, both tests detected an average of 20-30 spores per test of Aspergillus Penicillium and about 4 spores of Cladosporium if that means anything to anyone.

They also said their children have asthma and are concerned about flare ups this winter, which is really concerning to me, given that maybe my property isn't the best fit for them due to the fact that it has a finished basement and single pane windows upstairs (it was built in 1956). I decided to give them the option to break their lease and leave, if they so choose, which they haven't responded to yet.

My question is, has anyone dealt with a similar situation who may be able to give some advice on this? Would you allow a tenant to break a lease given the circumstances? And would you invest the money to do the performative deep cleaning knowing that subsequent tests would likely show  the same levels after all was said and done?

Thanks for the invite @Robert Laird I should be able to make it!

Thanks all for the recommendations, I've purchased The Real Estate Game and added Confessions of a Real Estate Entrepreneur to my list. I was also looking around today and came across Ken Rosen's Investing in Income Properties, which seems like a pretty good overview of how to invest in all the various CRE asset classes. I really appreciate the suggestions!

Hi,

I was wondering if anyone here has some good book recommendations for non-multifamily commercial real estate investing. 

I live in Portland, Oregon and I currently just own one duplex as a house hack, but my 3 year goal is to get into commercial properties. I've read Bryan Murray's Crushing it in Commercial Real Estate and Ken McElroy's The ABCs of Real Estate Investing, and while these books have some amazing advice on Commercial financing that I think can be carried over to other asset classes, the rest of the operations advice is for Multifamily investing.

I am starting with small multifamily investments to start building wealth, since I really don't have much capital beyond what I can put away with my day job, but I really want to focus on Non-multifamily investments in the long term. My primary concern is the fact that I'm investing in the Pacific Northwest which is somewhat hostile toward landlords and makes it difficult to do business, meaning there is a high level of regulatory risk in my region.

I'm not sure exactly what asset class to focus on, I just heard the BP Podcast #416 with Matt Onofrio which got me really intrigued about industrial warehouses, and I've also watched a couple of youtubers who have had success with Self-storage, but I'm really just looking for books that others have found helpful for getting started in any non-multifamily CRE asset classes.

I was really inspired by Matt's story and would like to start learning more about warehouse investing, I'm in Portland and we have an Ocean connected port, River barges, intercontinental railroad connections, an International airport and of course a large interstate highway intersection, so that sounds like a good place to start, but I don't know the first thing about this asset class.

I get the things to be aware of for multifamily investing to forecast income and expenses and evaluate a deal, but I have a feeling Industrial is a whole different ball game, and I'm looking for resources to get started.

Thanks,

-Mike

Post: Convert a duplex into 4plex in R5 zone

Mike MeerschaertPosted
  • Portland, Or
  • Posts 14
  • Votes 8

So I was wrong they weren't doing a final vote that day, but I did get in touch with Morgan Tracy who is heading up the infill project and he told me that the new law will come into effect in August of 2021. It'll be a year because it'll likely get appealed so the plans might change slightly, but due to the state mandate in House Bill 2001 it will definately be happening one way or another.

Post: Convert a duplex into 4plex in R5 zone

Mike MeerschaertPosted
  • Portland, Or
  • Posts 14
  • Votes 8

@Sharon Beatty sure I'll update this thread with my progress! I have a long term tenant who is on a 2 year lease on one side of the duplex, so I'm going to add a unit on my side for now, and do the other side when she moves out in about 18 months.

As for the infill project vote, from that website it looks like they are voting on it this wednesday at 2pm. I believe you can watch the vote on their youtube channel here: https://www.youtube.com/channel/UCcPIUh7CWwtBXisMPHWG65g

Post: Convert a duplex into 4plex in R5 zone

Mike MeerschaertPosted
  • Portland, Or
  • Posts 14
  • Votes 8

That's perfect thanks @Bruce Bingham! It looks like fourplexes will be allowed in R5 zones once this passes.

My building is 4104 sq feet and the lot is 5,000 sq ft so looks like It'll work. Thanks again!

Post: Convert a duplex into 4plex in R5 zone

Mike MeerschaertPosted
  • Portland, Or
  • Posts 14
  • Votes 8

Hi,

I own a Duplex in North portland, and each side has a finished upstairs with 1026 sq feet, a 726 sq foot unfinished basement, and a 300 sq foot garage. I'm considering finishing the basements on both sides, and turning them into 1br units, so building out a bathroom / bedroom / kitchen downstairs on each side.

Does anyone know if it's legal to convert a duplex into a 4-plex in an R5 zone? House Bill 2001 makes me think it might be possible, but I don't know for sure. I reached out to Portland BDS but haven't heard anything back yet (been about a week) so i was hoping someone on these forums might know.

As for the numbers, I've spoken with a local property manager and they think it'd add between $31k - $38k in annual rent, and I've spoken to a contractor they estimate it'd cost around $180k, so that'd be between 17% - 21% ROI, so it's kind of a no brainer if it's legal and I can secure funding.

As for financing the construction, I have excellent credit, and some equity built up, so I'm considering using a HELOC with a 95% LTV, Does that sound like a good idea? Anything I should be aware of? Or should I consider something else? It's my first investment property so I'm kind of figuring this all out for the first time.