All Forum Posts by: Todd Powell

The Oregon House and Senate have now signed off on Oregon state wide rent control, and the bill awaits the governor signature so it’s a done deal. Any Oregon property owners or property managers know the status of leases moving forward

I do yearly leases with many student rentals and the new law says after 12 month leases they convert to month to months. Do I have any control over this to renew them again for another full year? It is very hard to rent to quality students mid year so this is why I ask ? I don’t mind the 7% yearly rent increase cap plus CPI, but I need to know how to protect myself with tenants gaining more control than myself. The bill takes away all 60 NO CAUSE evictions which I have done several times. It also states you can cannot discriminate against evictions older than 12 months and taking felons I heard. So, what is my legal recourse to protect my investments?

Can anyone shed light on this in Oregon fully understanding these soon to be laws ? Government is now taking over in Oregon! Thanks in advance for any help you can give. 

@Diana Johnson  I tend to be a really nice guy but I have been burned by taking chances.  Sounds like I would pass. I have a former tenant that I finally got out and she sold me with a song and dance. It cost me $6000 to learn the lesson. There is a reason she had these issues. There is always a better tenant if you keep looking. Just my two cents.  

On the tenth day of christmas, my renter told me

“Please get an electrican in my unit by christmas day’”

My question for this panel is this a widely accepted practice among investors, or a lower percentage of people who see this as a wise thing to do. I have always heard of investors wanting the 27 1/2 years to get the building depreciation.  Also, if this building gets traded up on a 1031 exchange does this hurt anything ?

In other words, is this a smart thing to do or not. Pros and Cons greatly appreciated !

@Richard Sherman One of my deals I actually have 9 more years, but the other one I have only 4 years left on the owner carry. I guess the 4 year call or sooner is my first order of business and at 4.75% there is no real rush other than if rates were headed upward quite a bit. I am always looking to deleverage or pay down debt. Of course, interest rates are a piece of that puzzle.

@Matthew Scott I have not heard the term baseboard radiator, is that just a regular baseboard old school heating that runs along the bottom of the wall or something different?  I have replaced the old baseboards with either Cadats systems, or ductless systems. The ductless were a lot more money up front, but I get to advertise AC in the unit which is a competitive advantage in the market. I also got rebates from my local city as well as state wide rebates on the ductless. In Oregon, those have dried up a bit now though. No matter what you do, I would for sure get rid of baseboard heaters as they take up room and tenants do not like them. Best of luck! Todd

@Brendan Lyons I think one hand can wash the other, of course, you will pay taxes on any gains in your LLC, but in the end its all your pot of money, right? I have taken funds from my LLC checkbook to use on other projects, but the money has to be accounted for.

@Richard Sherman  that's what I am trying to figure out... no one has the crystal ball, but I wish I could know for sure as I kind of wanted to see if we were having a RE shake the next couple of years. I would definitely do some refi's if I felt these rates were surging upwards. Maybe I am being too hopeful?  I am sorry, I have been busy on days off but lets get together sometime. Cheers   Todd

@Brendan Lyons I have done both scenarios. I would consider doing the minimum down using your HELOC as they are interest only typically and we are in a rising interest rate environment. I have used up to $550,000 of HELOC debt to use for rehab and down payments and now owe $421k and working hard to pay down my debt. I also have millions of dollars of RE equity and a $13,000 of positive cash flow and my HELOC is how I leveraged my way up time and time again. I have flipped many homes starting back in 2001 and eventually pushed my limit up. I found Keybank two years ago at 90% LTV with a 15 year draw period at prime rate minus -.25% rate. Hope this helps ! Lock in debt with cheapest money

@Michael Bouzaglou if you can afford it you can vacate them all and rehab them to sell for maximize prices, but if you can’t afford it you can raise rents and then sell.  I am cuirious though with longer term tenants and the way they are managed that they may be outdated quite a bit.  

I am assuming they may be paid for and I would be inclined to look at the risk vs the reward with updating all of them and getting max rents out of them as it might be easier to sell. But if you really don’t want that hassle then just raised rents to market levels and then sell.