All Forum Posts by: Zach Davis

My understanding of the new Portland "Fair Access" odinance is that felonies can only be held against them for 7 years from the date of sentencing. However, I'll admit I'm avoiding reading up on the topic in order to keep my blood pressure somewhat near the levels of the living. 🙄

@Brad Hammond It seemed like a well cared for property from the quick drive by I did. I didn't want to disturb anybody since its back off the street a ways so I kind of just did a quick pull in and turn around. I think the biggest issue you'll have selling that place is it backing up to Lombard and the fact that its a 5plex. Not that its not doable but you may have to entice people into it given the reduced interest in the market. IMO 5-6 units are the most difficult to sell (and buy) because most people that have the ability to finance a commercial property are looking for something with more units and most looking in that size range probably can't or don't know how to get anything but a standard mortgage which generally won't cover anything over a 4plex. That issue alone substantially limits your marketing pool. The location issue is also one that smaller landlords, I include myself in this, deal with since they tend to be more attached and look at their investments through the lens of "would I want to live here" instead of "does it make money". I don't think either of these can't be overcome, but some head scratching may be in order to find the best market and marketing for the property.

There are still a surprising amount of people buying right now. After talking it over with my agent we decided to list that duplex for about 5% under what the comps showed it was worth hoping for a bidding war. We also waited for a vacancy so at least one side could be viewed without an offer hoping to expand our marketing to first timers, small holding and owner occupied in addition to the usual suspects. It was on the market for 2 1/2 days and we ended up with 10 offers, only two were for asking price, the rest were 6%-10% over and two were 15% over asking.

I think you can sell your property, and maybe even sell it for what you are asking, but you may need to think over a way to expand the amount of people that you can successfully market it to.

@Brad Hammond Any update on the sale of your 5plex? I'm in the process of finalizing the sale of the duplex I mentioned before and somehow ended up driving right past your place while on the job today. How goes the battle?

You'll most likely have to drop the price to get an offer in this market. I personally know people dropping everything from sfh, plexes and up to 250 units in multiple complexes due to the recent law changes. Its not like it was 2-3 years ago. People are scared to buy in this market. Anyone that will take the chance is looking for a deal and banking on decreased investment causing long term market inflation.

Also, i'm sure you know this being a broker but properties that sit with multiple price drops seems to make people think there are issues with it without even looking. You might be able to pull it, take new pics and relist with a lower price. With any luck it could get some new interest.

Just for reference I have a duplex i'm getting ready to sell. Its a 3/1 and a 2/1 with garages, fenced 1/4 acre yards, fully updated, as well as new exterior paint and a new roof. You're probably in a "higher rent" area but right now all of Portland is a no go to most investors. After a quick look at the recent sales, I'll most likely only get $170k-185k a door, probably with concessions. And that's with a vacant unit buyers can view that also appeals to the owner occupied crowd. Rethinking the price is probably the biggest factor in my opinion. Right now people have to have a reason to push through the uncertainty of the market. 

Good luck!

I want out and will likely start to liquidate but will probably do it over time or wait until this becomes the new norm and values stabilize. No sense in running around like my hair is on fire. I self manage so I have a wider margin to absorb the inevitable losses. I have also probably wasted more money on my properties than this will cost me with my over improving tendencies. That is one thing I will say for these laws, they've forced me to actually treat it like a business instead of overdoing everything. 😐🤪

@tyler combs

For the moment I'm funding IRAs, saving for a future opportunity and paying down the mortgage on my personal home. 

I was and I stopped about a year ago. Money can still be made but the market is too hostile for me to want to deal with. I'm looking for semi-passive income, not a full time job keeping up on the ever changing laws or dealing with the new breed of entitled tenants it's creating. 

Yes, the police were well aware of the issues with many of the residents at the time we purchased those properties. They were as helpful as they could be in this day and age but the reality is their hands are tied from a lot of different sides. Unless your tenant is a fairly large distributor worth the DA building a case against its unlikely they will really be able to do anything to make a difference. 

As far as the letters go, I don't think it would hurt as long as its done according to the law but there too I doubt it will make a substantial difference. In my experience these people have been through this before and know the protections and freebies they can get to fight you. Even if it does make a difference it will be very short term. I've found when you have tenants with issues like that they will either continue to do it knowing they will most likely loose and eventually have to move (big deal, they can always find a slumlord to rent to them), or continue and hide it better which makes it harder on you or your PM to document. 

Even with the pay out it can still be more cost effective to give a no cause. The other way would be to document and give them a with cause, which they will most likely "cure", then you can continue to document their unlawful activities and serve a repeat violation notice when they slip up again. Which one you use really depends on your individual  circumstances. 

Sorry to here about your issues Kelvin. I've been there myself with inherited tenants. We issued them a no cause and 2 months later the relocation ordinance was passed and made retroactive. We ended up recending the notice, installing a surveillance system on the property and documenting any activities that we could write them up for. We were also fortunate that we also had tenants that we could rely on to write up anything they were doing in addition to our surveillance. It took us 4 months and thousands of dollars in lawyer fees (he got a free lawyer), lost rent and damages but we did get him out. In hindsight it would have been cheaper to pay him to move but that would be depedant on whether he actually moved or just took the money and made me go to court anyway. If documentation and with cause isn't an option for you it may just be cheaper to give them the money to get out. Its better than loosing the good tenants you do have. 

Credit unions are great but keep in mind that they carry very little cash on hand. I recently switched back to US Bank because I couldn't get more than 5k out without ordering it a week in advance. From what I understand most credit unions operate this way. Makes it hard to jump on a deal of any sort when you can't get your own money out of the account.