All Forum Posts by: Mike Nuss

@Laura Young you must be in the Cully neighborhood to have R7 in the vicinity of R2.5 and R3. One of my brokers is working on a plan amendment (zoning change) in that area right now. The city advised him to try and change from R10 to R2.5 (instead of the R5 his early assistance meeting was based on) because of the existence of R2.5 in the area. 

A couple thoughts come to mind from the limited info on your post. 

- 25' wide lots are not allowed in R5 zone. Minimum lot width is 36' (unless you're working with underlying lots of record). Do you have underlying lots of record?

 - @Jay Hinrichs is correct. R2.5 is a pain in the butt zoning for Portland. However, they are making some big changes to the R2.5 zoning as part of the RIP project.....so it may not be difficult if/when that ever gets finished. Although, new requirements may make your project difficult. 

- flag lot requirements are going to change dramatically, possibly, with the passing of RIP, so a flag lot may be a good way to go. Or maybe you do both. 

I'm happy to chime in more thoughts if you want to dm me and give more specific info about your property. 

Good luck!

@Jay Hinrichs I don't know how you keep up with this stuff across the entire mainland. Kudos for sure!

I see condo conversions coming back really strong over the next 5 years, especially after our Residential Infill Project finally moves forward. I think builders will be building utilizing the RIP project to build "affordable" condos. They'll permit as multi family and then condo convert for the resale. I don't think those projects will pencil very well as rentals, but they'll work great for condos. 

Portland currently allows for Planned Developments on sites that land division doesn't make sense, but yet density can be increased. Are you familiar with Eli Spevak of Orange Splot....he's the main developer I know of right now that is combing PD/Condo as a way to build cottage clusters. 

@Kelvin Lee this right here...."If I were to blame someone, it would be the PM who allowed the drug lord moving in at the first hand.". 

It comes down to management and control. The property manager needs to screen well and then enforce the lease/landlord tenant law well. Tenants that don't care for other tenants (or the property, or the neighborhood, or...) won't want to stay in a well managed complex. Since that management hasn't been present. There are really two ways to go. Like Mathew and Zach said, install cameras, begin documenting what can be documented and send non compliant notices when appropriate and often. Or you can give no cause notice, pay relocation and move on. It'll probably cost you less in the long run, but more importantly, be better for your other tenants and their well being. After serving notice, you could even negotiate a reward based move out plan with a higher payout to get them out sooner, while helping your other tenants out sooner as well.

Market conditions are changing here in the Portland, OR market. Supply levels are increasing, which quickly gets framed  as "increasing supply". However, in reality, we're really seeing a slow down in demand and not much increase in actual supply. In my opinion, we won't really tell where the market is at until next year, after the seasonal change Portland has gone back to over the past couple of winters. 

Man, so many hidden nuggets of national markets and valuation knowledge in this silly little post  @Jay Hinrichs ; which probably wasn't even meant for knowledge or education. We need to get you back to a RareBird Investor Network meeting. You and I can just chat it out with a room full of hungry, question asking, real estate folk.....talk about how the underlying fundamentals of investment, capital, valuation, and flow/cycle of markets. Of course we would buy you beer :)

@Brett Barton I stand corrected. It's only about 1.5 months old with an update one month ago. I thought it was an older article as it is basically a rerun of past articles, with the same "news". The articles are arguing that enforcement of the airbnb ordinance passed a few years ago isn't happening. Which is kind of true, kind of not. I know many people who have received fines. One builder was fined an exorbitant amount. But there are also a ton of people that do not have permits that are renting out on nightly basis. 

Brett, I apologize if my post came off as condescending to you. I hate it when people spew negativity on here....that wasn't my intent. 

@Brett Barton that's a pretty old article. Yes, there are definitely a lot of airbnbs that are not "legal" airbnbs, but that doesn't mean Portland has not adopted code for them. Portland has a pretty strict code for airbnbs in residential zones, requiring a long term resident to live there for 275 days per year. This is a special "conditional use" that allows you to operate a nightly rental (which is an R2 use,......long term rentals are R1) which is not an use that is allowed in our residential zoning designations. 

@Jim P., as @Neal Collins stated, the "hotel occupancy", which is allowed in the "retail and sales", which is part of the CM2 zone, would allow for nightly rentals. To fully be legal though, it requires to convert the building to an actual hotel. I've been through the process, it's doable, but likely not feasible for a project of small scale. You can always just throw it on airbnb, but you risk $5,000 per night fines.....not to mention the costs to furnish, manage and operate the unit.

In my opinion, airbnb from an ownership standpoint isn't much better than just a good old normal long term rental, unless there are unique/niche like features that allow your building to stand apart from all of the other (and we're talking thousands) airbnb units on the market. 

Brett is right though, that part of town has a ton of demand. Putting your property to a higher and better use is definitely possible. We're hitting the end of this current development cycle, with construction costs, lowering rents and lending changes making new build projects less feasible, but the next building cycle shouldn't be too far down the road. 

@Mathew Wray apparently the policy is getting some big changes in the next few weeks. The city council meeting for this topic has now been moved to October. That's the only way for public testimony at this point. 

Both of these policies have been coming out of Chloe Eudaly's office. Jamey Duhamel has been meeting with lots of "stakeholders" on both sides of the table.....so the time to give input has really come and gone (unless they view you as an important opinion, which property owners are not). You can still email the mayor and the other 3 commissioners. There will be no changing Chloe's mind, but she is only 1/5 of the vote.....so contacting the other commissioners is the best way to go at this point. I will testify when it goes to council. 

@Kelvin Lee my portfolio is mostly fully renovated historic rentals in great neighborhoods. We do get great tenants, but we're also competing with vacant new buildings offering 6 weeks of no rent....so there are definitely trade offs...just like you've pointed out in different asset classes. Bottom line is, be up to date and know the pros and cons of each. 

Join the RareBird Investment Network on September 13, as Brad Kraus, Attorney with Warren Allen LLP speaks to us about helpful landlord strategies, and how to best protect yourself through ever-changing tenant/landlord laws. Networking begins at 6:15 PM and the presentation begins at 7:00 PM.

The members of Warren Allen are experienced trial attorneys and respected litigators. With their courtroom experience, Warren Allen attorneys possess a keen awareness of current legal philosophies and trends. They use this experience in many areas of law, including Business, Construction Law, Condominiums, Planned Communities and HOA's, Real Estate, Real Estate Licensing and Regulation, Divorce and Family Law, Personal Injury, Debtor and Creditor Law, Landlord's Rights, Estate Planning and Probate.

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I know this really well as I'm on the RSC and have gone to verbal battle with Chloe's policy advisory multiple times. Here's a little more background. 

@Kelvin Lee you're not forced to accept criminal background records. You just cannot out flat deny a criminal record with certain time frames and circumstances. This is part of the "individualized assessment" portion of the proposed ordinance. This section alone is multiple pages and has a lot "if this, then this" scenarios. It is difficult for even attorneys to make sense of (this played out by an attorney at our last RSC meeting) and so complicated I haven't even really had a chance to wrap my head around it. The ordinance will make your head spin trying to figure it out. 

@Mathew Wray part of the ordinance is to cap the income to rent ratio requirement to 2X....and part of that income has to include other benefits (food/snap program benefits, family benefits, etc..), but also can include average cost of utilities for the rent side. 

I whole heartedly agree with @Thomas S. that you don't let policies keep you from operating your business. However, business won't ever "be as usual" again in Portland. For example, when this new ordinance goes into play (I believe it will pass), we will have to completely overhaul our "screening criteria". You won't simply be able to just raise credit requirements either.....there are more "if this, then this" scenario steps you have to go through if someone doesn't have perfect credit or enough income (like allowing co signers). 

Most small landlords won't be able to keep up with all of the "notices of rights" that will be required and like @Account Closed said it will force others to sell. It will also take a lot of property out of personal management and put into professional management, which probably means the self managed rent subsidy will dissipate. Unlike the relocation policy, this policy does have a lot of real unintended consequences that will come in to play.