All Forum Posts by: Scott Smith

Congrats on becoming a housing provider in Eugene, Oregon.  The state of Oregon and the city of Eugene both have complex and unforgiving regulations that most often favor the tenant, so it is important that you learn about these laws so that you can make strategic choices now that avoid pitfalls later.

Fortunately,  the Oregon Rental Housing Association at the state level and the Rental Owners Association of Lane county at the local level can provide you with excellent resources.  I highly recommend you join up!

Thanks for sharing all the details.....and I agree, great record keeping!.....595 hours, wow!  I think this will be a great investment in the long term.

Did you do most of the work yourself or did you use contractors?   (A bit of self-interest here....I am in the Eugene (Springfield) market and always looking for references for reliable, quality maintenance people!)

Thanks for the reply Andrew!   Interesting concept.  

Curious about the potential advantages to a seller for doing a "subject to" sale where existing financing stays with the property after sale.  Specifically, for a duplex with market value of $450,000.  Existing loan of $225,000 at 3.625%, 30 year fixed with 28 years left on the loan would stay with the property.

As the seller, what premium or benefit could I expect for allowing the loan to be "assumed" by the buyer?   As opposed to doing a standard sale where the buyer pays cash or obtains their own financing.

I am in the Springfield, Oregon rental market.....shooting-from-the-hip analysis:  $500K owner-financed triplex sounds like it is likely a good deal.   Perhaps, try to figure out why the seller is stuck on $80k for a down, what is he trying to accomplish, then figure out an alternative way for him to get what he wants.

Is the property in Eugene or Springfield?  This is important, Eugene just enacted some restrictive regulations that will increase the cost of operating rental property and risk.  Also, Oregon state rent control rules limit to less than 10% per year for rent increases so the under-market unit may end up being under-market for a few years due to legal restrictions.

Why are two of the three units vacant?  Are they ready to rent, or will it take your time and money to get them ready?

Area of town can make a big difference on the type of residents that the property will attract and the level of work and risk involved in operating it over time.

Sounds like it is an older property, which is okay, but increasingly lead paint, asbestos, etc. are concerns to residents and government regulators.  This translates into increased costs and risks for the owner-manager.

That said, keep checking it out and underwriting the deal, it sounds like there is potential there.  If you want to have a cup of coffee sometime and discuss, let me know.

I am "mom & pop" owner-manager in Springfield, Oregon just east of I-5 from Eugene.  I have been seeing rents increase substantially and demand for rentals remains high.  I personally feel like rent growth will continue to increase but perhaps at a slower pace...just a hunch.

I would caution incoming investors in Eugene to get educated on the Eugene Rental Housing Code/Program as it is here to stay and it is growing.  Some long-term investors that are used to the good old days of 72 hour notices for nonpayment of rent and no-cause termination notices are hanging it up and selling out.   This is not to say that Eugene is a bad place to invest.  It simply means that your models and expectations need to reflect the reality of extra costs and time related to dealing with new rental laws.   Statewide in Oregon the laws have just changed to effectively increase the likely rent loss for a non-payment eviction from one month to two+ months of rent while traversing the court processes.  Eugene is close to adding relocation assistance (cash payout to tenant) that is over and above state requirements. Eugene has very specific requirements for security deposit accounting that have some owners wondering whether the hassle is worth charging deposits.

If you plan to invest and have  quality outside management, these rules will affect you less directly except for potential increased costs or increased losses for non-payment or damages that are not covered by deposits. If you are planning to self-manage, these rules will be a significant new burden to deal with and increase the risk of having to hire an attorney down the line.   

The local Lane County Rental Owners Association chapter of Oregon Rental Housing Association is very active and a good resource for investors.  

A significant faction of Eugene, Oregon government (and voters) see themselves at the vanguard of any progressive movement.  Frequently to the the disadvantage of the other citizens of Eugene who are too busy going to work or school to have time  to be an activist.  

Eugene is also in the process of enacting its own city-wide rental home regulations which are not at all friendly to landlords.

And at the same time, Eugene is in a rental supply shortage.

Congratulations on the duplex purchase.  Eugene-Springfield, Oregon has had a strong rental market for the past few years and in my opinion, it will continue to be strong for the forseeable future due to short supply.

I highly recommend that you consider connecting with the Rental Owners Association of Lane County.  This local non-profit organization has been very helpful to me over the years as a small landlord.  Lots of good Oregon law compliant forms as well as education about the ever changing landlord-tenant laws in the area.

Best of luck with your new investment!