All Forum Posts by: Mike Nuss

@Ross Leavitt I don't think property values are a concern with the rent control proposal.  You'll find  some of the lowest cap rates in the country in rent control markets. Portland is probably going to become more and more appealing to institutional $ looking to park capital. Demand will still be there and effective purchasing power will continue to increase as that institutional $ magnet grows. Purchasing properties that make sense, will get more difficult (for properties with below market rent) as you'll have less flexibility with a rent control ordinance. But they will still be out there. That being said, looking out of state is getting more and more appealing though. 

@Patrick Sloan another benefit from getting your license is the education is actually pretty decent. Getting your license teaches you squat about being a broker, building a business and earning $. It does however teach you about the bundle of rights, various types of vesting interests and brokerage laws. 

I took my first "broker" class in 1997....I was focused on appraisal at the time, so I didn't give much effort and didn't get much out of it. However, having to take very similar classes over the years to upgrade my appraisal license, I found that knowing the basics of ownership rights and vesting greatly impacts understanding various investment strategies. I know a lot of ways to work with real estate, simply because I understand vesting and the bundle of rights really well. 

Rent Control is a loaded term. As many have mentioned already, specific laws vary between jurisdictions. 

The proposed Oregon bill is a pretty soft "rent control" bill that stills allows the power of a fixed term lease (where as Portland killed fixed term tenancy with it's relo policy). The tenant advocates in Portland have been very vocal and negative on the proposed bill, because they believe it is very weak. The proposed bill is 180 degrees from HB2004 in 2017. That would've removed the rent control ban statewide (which would've allowed Portland to create a very agressive rent control policy) and eliminated no cause terminations. 

If you're a property owner in Portland, and plan to continue owning in Portland, this is a much better outcome than simply removing Oregon's ban on rent control. 

Thanks for the shout out @Caleb Webster. 

@Charles Han way to get going. This aint easy, but it sure is simple. I suggest don't delaying on anything.....sharpen your sword so it's ready to go when needed. Don't hold off on networking and meeting/deepening relationships with potential team members. I'm glad you'll try to make it to one of our meetings. February's topic will be all about acquisition techniques so that's a great one to start with. Hope to see you there. 

@Mathew Wray kind of both actually. Not the specific buyer that is in contract, but how the "typical" buyer in the market place would consider that property. Some properties will be looked at both by owner occupants and by investors. Some just by owner occ and some just by investors. 

It is frustating that there are no hard guidelines, which is actually a good thing in my opinion as it actually allows for some "art" as context varies. For example, I appraised a sfr w/adu that was right off of mississippi. There was a lot of interest from investors. The actual buyer was an owner occ that was going to rent the adu, but because so many investors were interested, I actually appraised that like a duplex. There were no good "comps" at the time (this was back in 2009 or 2010) so a duplex made much more sense. A contrasting example would be a sfr w/adu further from the city core and in a less walkable part of time. The rent value from the adu isn't nearly as much so the adu is much more of a "mortgage cost offset" than a real "marketability increaser" where it increasd the pool of buyers simply by being there (where as Mississippi's location grew the pool of buyers dramatically). 

@Jesse Aizenstat that last paragraph you talked about was the most important part of your discussion and facts so far. I can talk a lot about how appraisers consider adus in Portland, but it sounds like it's a whole other ball game in Santa Barbara when it comes to the covenant. In my opinion, an owner occupied covenant should completely eliminate the income approach to value or using duplexes as comparables. Comparables are supposed to be properties that a potential buyer of the subject property would've considered purchasing as well, and vice versa. An investor who's looking at income property in Santa Barbara has no reason (unless for a specific investment niche) to be considering sfr w/adu properties as their main motivation is income stream. 

In Portland, when I was appraising, I would consider duplexes. I have appraised a sfr w/adu as a single family home w/adu, utilizing a bank from for a single family home. I've also appraised a sfr w/adu on a 2-4 unit income property form as well. My reasoning for changing, was based on the specific context of the property that was being appraised. How would the market (potential buyers) look at the property? If that answer included, or was dominated by investors, I would really have to consider the income. ADUs are becoming much more common in our market, so it's possible now to complete an appraisal using strictly sfr w/adu properties as comparables. I had lunch with a realtor friend of mine today who lists a lot of infill new construction. We weren't talking about adus at all, but he said that he's seeing new construction with adus having the most success in the market right now. His thoughts are that the new construction market is completely flat and the adu gave builders an advantage on the market place. 

Regarding your specific situation, as an investor minded person, 3K rent on 200K expense, in Santa Barbara seems really dang appealing. 

Oh yeah, a little comment on the "0.50" comments about Santa Barbara....the reason your'e getting such a better return on your adu scenario versus a purchase scenario is because you're not factoring in land value. Land value for your adu is free as you already own the property.....purchases scenarios are having to buy the land as well as the income producing improvements. 

I hope this helps

Oh yeah, @Mathew Wray gave a great recommendation to just contact an appraiser. I would go a step further and say you don't really need to get them out to your property. A good appraiser will know your location and zoning designation in their head and can probably just have a 5 minute conversation of how they would "pull comps" in your given scenario, which would give you a good idea of how they'll be considering the adu's income as it pertains to value adding potential. 

@Mary M. and @Jay Hinrichs we do a live facebook stream that is only available while it's live. So you can catch it there tonight. Please "like" and "follow" us on FB if you do. This is the RareBird Investor Network page (we have others for RareBird so just wanted to add clarity). 

We also post all recordings on our paid member site for additional convenience for our members (Mary, thanks for joining yesterday :) ) 

@George McCleary

@George McCleary glad to see you'll make it tonight. See you in a few hours. 

@Collin Thibodeaux thanks so much for the heads up on this! The 1/8 date in the "event details" is wrong. There is only one meeting and it is on the 10th. I apologize for the confusion. Thanks again for the heads up. 

Join the RareBird Investment Network on January 10 for our first meeting of 2019! I'll be providing my 3rd annual Market Forecast sharing in-depth analysis and insights you need to understand what lies ahead for the Portland real estate market! This is one meeting you don’t want to miss!

Networking begins at 6:15 PM and the presentation begins at 7:00 PM.

The RareBird Investor Network meets on the 2nd Thursday of every month to discuss the topics related to real estate investing. New to the Investor Network? Come and check out a meeting, your first time is always FREE!

@Patti Stone commercial real estate is a whole other arena to work in. Data is not readily available, unless you have a costar subscription which can be very costly or are in contact with commercial brokers. My experience with local commercial brokers is that they don't seem to be good at calling back inquiries. They're focused more on the big fish that they know they'll get good commissions from.

I have experience, personally, with small commercial in Portland and am happy to provide some additional insight on your property if I can. I'm also a licensed property manager, but have not managed commercial properties for clients to date, just my own small commercial stuff.  

Hope this helps!