January 2019
In this Issue 1. 2. 4. 5. 7.
FEMA botched it Cool condos and affordable apartments Better appointments Holiday party Arcana
FEMA Botched It: Lawmakers Push Disaster Agency to Sell Flood Insurance During Shutdown Lawmakers are pressuring FEMA to undo a surprise decision that could prevent thousands of home buyers from acquiring flood insurance during the government shutdown. Capitol Hill was caught off guard by the agency's sudden announcement — made the day after Christmas — that the National Flood Insurance Program could no longer issue new flood insurance policies during the funding lapse. The move was jarring because Congress on Friday passed legislation intended to reauthorize the program's operations through May. Millions of homeowners rely on the program to protect themselves from the financial risks of flooding, and coverage is sometimes required to receive a mortgage. House Majority Whip Steve Scalise (RLa.) planned to speak with FEMA Administrator Brock Long on Thursday to seek a reversal of a decision "to blatantly ignore congressional intent," Scalise spokesperson Lauren Fine said. Sen. John Kennedy (R-La.), who wrote the legislation Congress passed to reauthorize the program, said he was working with the Department of Homeland Security and the White House on a solution. He spoke with Long Thursday and urged him to walk back FEMA's controversial move. "President Trump signed my bill to prevent unnecessary chaos like this,” Kenne-
dy said. "FEMA’s decision will cause upheaval for home buyers and sellers across the country." The National Association of Realtors warned that FEMA's decision jeopardized tens of thousands of home sales across America. "I urge FEMA to immediately reconsider this harmful and incorrect interpretation of its authority and resume its important work of providing flood insurance to families across the country," said Rep. Maxine Waters (D-Calif.), who will soon lead oversight efforts of the flood insurance program as chairwoman of the House Financial Services Committee. In a statement Thursday evening, FEMA said it was reviewing all legal authorities with the administration that would allow the flood insurance program to continue operations without interruption. According to FEMA, the issue arose because the program pays a fee to insurers to sell flood insurance policies on behalf of the government, and the fee may be considered "an impermissible funding obligation" during the shutdown. The move may weigh on FEMA's relationship with Congress as lawmakers prepare to draft legislation to overhaul the flood insurance program next year. Continued on page 7
Main Meeting: Toija Beutler Thursday, Jan. 3, 6:30 PM
The DoubleTree Hotel, 1000 NE Multnomah St. Portland Rental Property Investing Tuesday, Jan. 8, 6:30 PM Lake Oswego Adult Comm. Ctr 505 G. Avenue Lake Oswego Financial Freedom for Women Wednesday, Jan. 9, 12-2:00 PM
Beaverton Comm. Ctr., 12350 SW 5th St, Ste 100, Beaverton
Salem Round Table Thursday, Jan. 10, 6:00 PM
Salem First Baptist Church, Room 422, 395 Marion St. NE, Salem
Deal Analysis and Discussion Thursday, Jan. 17, 6:30 PM
Round Table Pizza, 10070 SW Barbur Blvd., Portland
Pre/Post Foreclosure and Legal Discussion Tuesday, Jan. 22 6:30 PM Round Table Pizza, 10070 SW Barbur Blvd., Portland Cashflow 101 Game Night Thursday, Jan. 24, 6:30 PM Round Table Pizza, 10150 SW Beaverton-Hillsdale Hwy Vancouver and North Metro Meeting Monday, Jan. 28, 6:30 PM 13009 NE Hwy 99 Vancouver, WA Main Meeting: Charles Tassell Thursday, Feb. 7, 6:30 PM The DoubleTree Hotel, 1000 NE Multnomah St. Portland
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December January 2018 2019
Rundown Motels Are Becoming Cool Condos, Affordable Apartments Luna Lodge, in Albuquerque, NM, is the quintessential Route 66 motel. A kitschy, neon sign with an arrow points to the parking lot that’s lined by three square Pueblo Spanish Revival buildings with flared stucco hoods over the doors. The 1949 property was even placed on the National Register of Historic Places in 1998 “as one of the best examples of a largely unaltered tourist court remaining along New Mexico Route 66.” But despite its iconic status, the motel fell into disrepair over the decades. The dilapidated, boarded-up building became a magnet for criminal activity. Then Luna Lodge got a new lease on life. In 2013, the renovated building once again began welcoming people into its rooms. But they weren't just passing through. The former motel had been converted into 30 affordable apartments for low-income and disabled tenants. As more and more travelers have turned away from classic motor lodges and hotels in favor of spacious Airbnbs with all the comforts of home, many of those old way stations have been left behind. While many have been demolished, others linger on in varying states of neglect. But over the past half-decade, a growing
segment of city governments, nonprofit organizations, and developers have been reclaiming these structures to transform them into apartments and condos to meet a growing need for housing. There were about 16,000 motels open for business in 2012, representing just 27% of the 61,000 operating during their heyday in the 1950s, according to Mark Okrant, author of "No Vacancy: The Rise, Demise and Reprise of America’s Motels." The number has dropped even further over the past six years. "Motels developed a negative reputation that has carried along for the past 40 or 50 years: They are regarded as anything from cheap to honky-tonk, a place to go for a one-night or one-hour stand," says Okrant. In decades past, these properties, many of which are located on prime commercial arteries, would have been turned into shopping spaces. But with the rise of ecommerce (thanks, Amazon), that’s no longer practical. “People are starting to think, 'What do I do with this thing?'”says KC Conway, an economist at the commercial real estate group CCIM Institute. Fading hotels become luxury condos, apartments
The House is a former motel that now houses millennial renters. Converting motels and hotels into residential buildings makes good business sense. After all, they're often located in or near tourist destinations, or places where people live and work—and where there's a shortage of housing. In booming Atlanta, what used to be a Hawthorne Suites extended-stay hotel was completely overhauled into luxury apartments in late 2016. The Metro, as it's called, features 200 units topping out at $1,550 for 1,154-square-foot, twobedrooms with new HVAC systems, stainless-steel appliances, and quartz countertops. Plus, the property has a pool, tennis court, and multiple fitness centers. “It was totally renovated inside and out,” says manager Montecchia Walker. The complex has maintained about a 93% occupancy rate since it debuted. Some properties that don’t boast the larger, apartmentlike units typical of an extended-stay hotel are getting upgraded to attract younger renters. In Eagle, CO, a bedroom community on the outskirts of the infamously expensive ski resorts of Vail and Beaver Creek, K Continued on page 6
Patrick Hurley patrick@raincitycapital.com www.raincitycapital.com
Ty Rothenberger 503-319-2620 tyr@veristonecapital.com
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January 2019 December 2018
February’s Main Meeting with Charles Tassell
Brandon McGraw—President bmcgraw@equitypropertysolutions.org Trevor Kitchen—VP of Operations tkitchen@equitypropertysolutions.org Donna McGraw—VP of Customer Relations dmcgraw@equitypropertysolutions.org
National REIA’s Chief Operating Officer Charles Tassell is presenting at this month’s Main Meeting. Thursday, February 7, 6:30 pm (networking) 7 pm (program begins | The DoubleTree Hotel | 1000 NE Multnomah St., Portland
Northwest REIA Volunteers Property management Eviction services Residential and commercial real estate sales Contact Christian Bryant: Christian@ircenterprises.com, 503-999-0477
We appreciate our dedicated volunteers, and we’re always looking for additional volunteers. If you’re interested, please contact our office at members@northwestreia.com
• • Ryan Hawthorne rhawthorne@financeofamerica.com (360) 553-3127
• • •
Steve Otos | steve.otos@civicfs.com Toby Newhouse | toby.newhouse@civicfs.com
• • •
Alan Davis Marty Sockolov Grady Radford Al Bullard Janel Page Carl Royer Tom Stutzman Richard Schacht
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December January 2018 2019
Want Better Appointment Results? Use These Words Marko Rubel To maximize your possibility of a successful outcome in any area of your life, it’s important to choose your words carefully. Words are powerful and when you can use them to steer people in the direction you’re after, you’ll find yourself landing more appointment AND more deals. How You Address Motivated Sellers In my courses and workshops, I spend a good bit of time teaching people how to converse with motivated sellers. I understand the way some words can help you build momentum, and some words may cause others to put up a fence around their heart. You want to use words that will help the sellers want to take action. You want to pay attention to how the words you’re using are causing the sellers to feel. You’d be surprised how just a few key words can cause a seller to desire to do business with you. As you move forward making appointments with motivated sellers, pay attention to what I’m going to share with you concerning words to use and words to avoid. As you do, you’ll get better appointment results, a potentially more deals too. Avoid Asking Why? Avoid using the word “why” when you’re conversing with a motivated seller. You may generally want to know the reason why, but sometimes asking this question can cause someone to feel as if you’re questioning their intelligence. Rather than
ask them “why”, ask them “how”. For example, instead of saying, “Why have you priced your house so far above others in the neighborhood?”, ask them, “How did you come up with the price that you wanted to sell your home for?” As you can see, when you ask them the “why” question, it could make them defensive or feel like you’re attacking their intelligence. But when you ask them “how” they came up with that number, you come across as sincerer and allow the seller to share with you essentially how they came up with that number. Don’t Use The Word “But” If you’re talking to a seller about something, and then use the word “but”, that tends to negate everything you said before that. Surely, you’ve been in conversations in your life where you did not like to hear that word “but”. (I’d like to date you, but…. I’d like to offer you the job, but….) So, rather than say “but”, use the word “and”. For example, instead of saying, “I’d really love to purchase your home for that price, but….”, say, “I know you really want to sell this house as fast as possible, “and” here’s what needs to happen for that to occur. You see the “and” is a connecting word and it doesn’t negate anything you said before that. It comes across as positive to the seller. Avoid Saying “Might”
It’s also a good idea to refrain from using the word “might”, because it is not a powerful word. Rather, it’s a weak word and can cause you to come across as indecisive or lacking assertiveness. For example, instead of saying something like, “Do you think we might be able to talk tomorrow?” say, “Let’s meet tomorrow at a time that works for the both of us.” The latter sentence is direct and shows initiative and assertiveness. It also shows confidence, which can go a long way when you are talking to sellers who want to sell their property ASAP. Avoid The Word “If” Do your best not to use the word “if”, as this is another word that can point to you as being doubtful or lacking confidence. Rather than use the word “if”, use the word “when”. For example, if talking to a motivated seller about getting the contract signed, rather than say, “If you decide to work with me”, say “When you decide to work with me”. Do you see the difference in that latter statement? You are using one simple word that can subconsciously affect that seller in a big way, in a way that benefits both of you. Even if you’re a newbie investor, you can come across as more confident when you use power words. Keep these tips in mind as you make appointments with sellers and meet with them face to face. Remember that you are a problem solver for those sellers, and your business is a service that can benefit them greatly. Credit: Marko Rubel, https:// bit.ly/2ERXNnk 4
January 20192018 December
Photos from our annual Holiday Party for our members.
Dave Metsker thanking our members.
Some of the donations our members gathered for the Oregon Food Bank. Thank you! 5
January 2019 December 2018
Continued from page 2 Real Estate nity spaces. HamOn the New Jersey shore, savvy developDevelopment mocks and exercise ers have been buying up old motels from picked up a equipment now sit owners who want to retire. These properstruggling over what was once ties are now being reimagined as condos AmericInn an indoor pool, and for urbanites who’d like a summer right off Inthere are plans to house—but can’t fork over the $1 million terstate Highstart group yoga needed to get a single-family house on the way 70. It and fitness classes. beach. then turned The old sauna now “Developers are finding that it’s easier to the inn into a offers a station to find 10 buyers who want to spend millennial wash dogs or moun$200,000 on a condo than one buyer who haven called tain bikes. And the wants to spend millions on a large motel The House. former check-in they’d have to operate,” says RealUnits start at area has been conFormer motel converted into condos | Van Dyk tor® Nathan Colmer, who's $1,360 a Group with the Van Dyk Group in month, a couLong Beach Island, NJ. ple hundred more than the going rate for verted into a lounge with a one-bedroom in the housing-strapped comfy couches. For as little as $129,000, area. The first 10 tenants moved in in beach-home seekers can pick “The idea is you only December. up a small one-bedroom with sleep in your room and pool access just blocks from While the basic configuration of the you have all this other the famous dunes in Seaside rooms was untouched (concrete walls space to hang out,” says Heights, NJ. They boast low and precast concrete floor decking made co-owner Kelly Herzog. homeowners association fees big changes nearly impossible), the stu“It’s a built-in communiand few restrictions on owndios and one-bedroom units come fully ty.” ers renting out the units. furnished. They even have new kitchenFormer motels can make ettes featuring a sink, fridge, and hot “A single-family in the same great vacation homes. A plate. Former motel room turned location would cost $2 milformer Long Beach Islion,” says Colmer. Areas that formerly catered to hotel land, NJ, motel that was into apartment. guests have been converted into commu-
converted into condos | Van Dyk Group
But while these beachside retreats are a Continued on next page...
Northwest REIA has a Facebook Group
Brady Regier brady@riverbendlending.com | 503-754-8760
See what members are up to and post questions at our Facebook Group. The purpose of this group is to provide a members-only forum where info can be shared and questions asked. https://www.facebook.com/groups/ NorthwestREIA/ 6
January 2019 December 2018
“FEMA” Continued from page 1
We welcome our newest Northwest REIA members! December 2018
Jonathan Walls Patricia Lulay Hang Trinh Keith Robbins Eric Koelling Wendell Smith Thomas Shadrick Maritza Garcia Kathleen Nelson David Millot
Congressional aides said FEMA did not warn lawmakers beforehand that the partial government shutdown would curtail its ability to sell insurance contracts. FEMA did not reveal the decision until Wednesday, when it also confirmed the program can still pay claims for flood damage. Lawmakers believe the agency has the power to circumvent the lapse in appropriations and continue selling flood insurance contracts. Sen. Bill Cassidy (R-La.) and Reps. Bill Pascrell (D-N.J.) and Frank Pallone (DN.J.) sent letters to Long Thursday urging FEMA to take advantage of an exception in the Antideficiency Act, which sets restrictions on government spending, to avoid economic disruption. They also cited funding the program receives from premiums and fees outside of discretionary congressional appropriations. "Awful," one congressional aide said of the agency's decision. "FEMA botched it." Credit: Politico, Zachary Warmbrodt, Dec. 27, 2018, https:// politi.co/2TaVTB8
“Cool Condos, Affordable apartments” continued from page 6 relative steal, the vast majority of them are not designed for folks who want to live in them year-round. They tend to have kitchenettes, and most are open to residents only from April through the fall. “For the most part, these are strictly summer destinations," says Colmer. Motel conversions can add some muchneeded housing stockThe House is a former motel that became apartments designed for millennials. Photo provided by Kelly Herzog Turning old motels into housing can also add inventory to markets where there simply aren't enough homes to meet demand. In Eagle, The House's co-owner, Herzog, had learned that the surrounding Vail Valley is about 4,000 housing units short of what's needed to accommodate its workforce. So when a friend in real estate told her an underused lodge would be coming onto the market, she jumped on it. What’s happening in Vail Valley is similar to many other desirable real estate markets. The share of renters considered severely rent-burdened—spending 50% or more of their monthly income on rent—increased by 42% between 2001 and 2015, according to a 2018 study by the Pew Charitable Trusts. For the full article, go to https:// bit.ly/2A851iK Credit: Realtor.com, Sara Ventiera, 20 Dec 2018, https://bit.ly/2A851iK
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January 2019 December 2018
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January 2019
Northwest REIA Board Members President: Christian Bryant, Legislative Committee Treasurer: Sam Wong Bob Thomas | 503-828-4340 bthomas@merchantsmtg.com
Ingrid Chavez
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