August 2019
A monthly newsletter published by the Rental Housing Alliance Oregon
rha est. 1927
www.rhaoregon.org
In this issue: Annual Picnic ..................... page 2 RHA Calendar of Events ............................. page 2 President’s Message ..... page 3 RHA Annual Picnic............ page 4 Dear Maintenance Men......................................... page 5 1031 Replacement Property Options ............................... page 6 Thank You Starry Night ....................... page 7 Landlording 101................. page 8
RHA Annual Picnic August 7th, see page 2 & 4 for more details
RHA Calendar of Events Annual Picnic Wednesday August 7, 2019 Bring the family and come join RHA Oregon for a fun afternoon at Oaks Amusement Park at our Annual Picnic. Enjoy BINGO, rides, roller skating, dinner, and visit our vendors at the Vendor Fair. A big thank you to all of our sponsors who help keep the cost for this event low for our members. See page 4 for a list of this year’s early sponsors. When: Wednesday, August 7, 2019 at 2:00pm Location: Oaks Amusement Park Picnic Area 1 7805 SE Oaks Park Way Portland, OR 97202 Price: FREE for kids 12 and under $5.00 per person over the age of 12 $12.50 per deluxe ride bracelet Must register with RHA Oregon to attend
Menu: Fried chicken BBQ’d hot dogs Garden salad Macaroni salad Potato salad Chips Watermelon Cookies, cake Pie and so much more! Come see the following Vendor Fair participants; Inkberry Printing & Promotional Apollo Drain & Rooter Services Real Estate Trasition Solutions Bluestone & Hockley Real Estate Services The Garcia Group Junk Away Hauling John’s Waterproofing Rarebird Property Management Willamette HVAC Micro Property Management National Tenant Network Stegmann Agency Farmers Insurance Waterbear Restoration Landlord Solutions Livable US Bank
DATE
EVENT
LOCATION
TIME
8/7
Annual Picnic
Oaks Amusement Park
2:00pm
9/2
Labor Day
RHA Oregon Office
9:00am5:00pm
9/11
Board Meeting
RHA Conference Annex
4:00pm
9/18
Dinner Meeting
St. Irene’s Tualatin
6:00pm
9/21
Mentor Roundtable
RHA Conference Annex
11am
INFORMATION
Closed in Observance of Labor Day
See September newsletter for more details
DATE
CLASSES
LOCATION
TIME
INSTRUCTORS
8/3
Landlording 101
Celebrate Conference Center
9:00am
Ron Garcia w/ The Garcia Group
8/6
Screening Class
RHA Conference Annex
11:00am
Marcia Gohman w/National Tenant Network
8/8
Risk Management-Reduce Liability
RHA Conference Annex
6:30pm
Amber Clark w/ The Garcia Group
8/15
Screening Class
WebEx
7:00pm
Marcia Gohman w/National Tenant Network
8/20
Screening Class
WebEx
7:00pm
Marcia Gohman w/National Tenant Network
9/12
Successful Real Estate Investing
RHA Conference Annex
6:30pm
Cliff Hockley w/Bluestone & Hockley
9/19
Tax-Deferred 1031 Exchanges
RHA Conference Annex
11:30am
Austin & Roger W. Bowlin w/ Real Estate Transition Solutions
9/19
Screening Class
WebEx
7:00pm
Marcia Gohman w/National Tenant Network
9/24
Risk Management Reduce Liability
Standard TV & Appliance Beaverton
6:30pm
Amber Clark w/The Garcia Group
9/24
Screening Class
WebEx
7:00pm
Marcia Gohman w/National Tenant Network
For additional class/event information visit: https://rhaoregon.org/education 2
RENTAL ALLIANCE UPDATE AUGUST 2019
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President’s Message Winter is Coming
I love this time of year here in the Pacific Northwest. The sun is shining, it isn’t too hot, and it isn’t humid. Freshfrom-the-garden fruits and vegetables are ubiquitous. It is easy to get a full day’s work in by 3 PM and still have plenty of daylight to spend some leisure time outdoors in the evenings with friends and family. We know these days won’t last forever; enjoy them while you can. If you are a landlord with rental properties in the City of Portland, I would offer the same advice with respect to how you plan your business. The past year has been marked by a series of legislative and regulatory changes that have made the business of being a housing provider much more challenging than before. In June, the Portland City Council passed new ordinances regulating Security Deposits and how Screening Criteria may be applied when offering a property for rent. The administrative rules are still being worked out, but this ordinance will go into effect on March 1, 2020. You can be sure that RHA will be offering classes to Portland landlords so that they may adapt their business practices to comply with the new regulations. You should also know that the rental registration system put in place by the City of Portland last year is now being reviewed in order to add an annual fee. The City Council held its first reading and heard testimony on July 31. Despite protestations from landlords, it is highly probable that you will need to collect an additional $5 per month from your tenants in order to pay this new annual registration fee of $60 per unit, due April 15 each year along with your annual business tax forms. Keep this in mind as your next round of rent increases comes up on the calendar.
How about the Portland Mandatory Relocation Assistance Ordinance? It is unlikely to become less onerous any time soon. The Portland Housing Bureau (PHB) recently published “Proposed Permanent Administrative Rules for the Mandatory Relocation Assistance Exemption Eligibility and Approval Process” that codifies the rules for exemptions from the ordinance. Suffice it to say that exemptions will rarely be allowed. Combined with the State of Oregon’s restrictions on lease terminations without cause, even if a landlord has a legitimate reason for terminating a lease without cause, it is going to cost more. By the way, PHB is accepting public testimony regarding the proposed permanent rules up until August 31 – they may be sent by FAX, mail, e-mail, or given in person at a public hearing to be held August 8 from 6 – 8 PM at IRCO on NE Glisan. See the PHB website or contact RHA Oregon if you need additional information. To end on a cheerier note, Portland is still a fantastic place to live. The quality of life here, on average, is pretty good. I have lived in San Francisco, Los Angeles, Atlanta, and Nashville. I have also spent time in cities around the world including New York, Paris, Tokyo, Singapore, Shanghai, and Mumbai. I can honestly say that there is no place I’d rather be right now than Portland during these pleasant summer days. Enjoy them while you can – winter is coming. Ken Schriver RHA Oregon President
FIND EVICTIONS STRESSFUL?
503-‐242-‐2312
Full FED Service First Appearances evict@landlord-‐solutions.com Small Claims www.rhaoregon.org
RENTAL ALLIANCE UPDATE AUGUST 2019
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RHA Oregon Annual Picnic
Bring an ageappropriate prize if you want to play Bingo!
at Oaks Park Picnic Area #1 Wednesday August 7
2019 Early Picnic Sponsors
GOLD SPONSOR
Thanks to our sponsors, members pay just $5 per person and children 12 and under eat for free! $12.50 Deluxe ride bracelets include roller skating! Schedule:
THANK YOU!
2:00 Registration Open 4:30 Vendor Fair 5:00 BBQ Dinner BINGO! To follow dinner
Pre-registration IS required! Sign up today at rhaoregon.org, by emailing info@rhaoregon.org, or by calling the office at 503-254-4723. Please note the number of adults, children 12 and under, and ride bracelets.
THANK YOU!
Broer & Passannante John’s Waterproofing Beutler Exchange Group Rarebird Property Management HFO Investment Real Estate Good Affordable Roofing Warren Allen LLP
THANK YOU!
2019 Early Picnic Sponsors
2019 Early Picnic Sponsors
SILVER SPONSOR
BRONZE SPONSOR
Real Estate Transition Solutions From Here 2 There Bluestone & Hockley Real Estate Real Estate Mold Solutions Services Willametter HVAC Frost Integrated Pest Mgmt. Kaady Appliances The Garcia Group National Tenant Network Stegmann Agency Farmers Gateway Property Management Insurance Andreson & Associates LizC Real Estate Investments O’Meara Carpet Cleaning 4
RENTAL ALLIANCE UPDATE AUGUST 2019
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Dear Maintenance Men by Jerry L’Ecuyer & Frank Alvarez
Dear Maintenance Men: My tenants are complaining of too many false alarms from their smoke alarms. This often happens when they are cooking or there is a lot of steam present from a humid bathroom. How far away should a smoke alarm be from both a kitchen and bathroom? Lisa Dear Lisa: The general census is that a smoke detector should be placed about 20 feet from the kitchen and stove area and about 10 feet from a bathroom door that contains a shower or bath. However, all this might change soon. There is a new generation of smoke alarms on the horizon that will detect smoke signatures and determine a cooking or steam event from a fire event or smoldering synthetic material fire. The UL Laboratories are currently testing this new generation smoke detector and have rules in place that after 2020, they will only list and recommend the new “Smart” smoke detectors. Hopefully that will be the end of standing on a chair and fanning your smoke detector to stop it from screaming. Keep in mind, regardless of type of the detectors; they should be placed inside the bedrooms, in the hallway and in the living rooms. Both up and downstairs including a basement if you have one. Keep wall mounted smoke detectors about 12 inches below the ceiling. If you have pitched ceilings, keep the detectors within three feet of the peak, but not in the peak. Dear Maintenance Men: I have a main sewer line that is causing me a lot of trouble. The plumber is suggesting I have the pipe replaced using a “trenchless” pipe replacement method. Is this a good idea? Will it work? It’s not cheap either! Ben Dear Ben: It really depends on the pipe and where it is on the property. Keep in mind replacing a sewer line using the traditional method of digging it up and trenching is not easy and may cause major disruption to your property’s landscape. Not to mention if the pipe goes under driveways, walkways and other obstacles; making the job even more difficult. Trenchless pipe replacement is now a tried and true method of pipe replacement. It typically involves a thorough cleaning of your existing pipe making sure there are no roots, breaks or disruptions along the pipe. The trenchless system involves the use of a flexible liner coated with resin that is blown or pulled into the damaged pipe and inflated. The resin then www.rhaoregon.org
hardens, creating a pipe within a pipe that is joint less and corrosion resistant. From a cost point of view, trenching, the more traditional way of replacing the sewer pipe may be less expensive. However from a headache point of view, the slightly higher cost of using the Trenchless pipe replacement method is well worth the extra expense of not tearing up the landscaping. Dear Maintenance Men: My property has dry wood termites. Do you recommend doing a spot treatment or fumigation tenting? Mike Dear Mike: There are good arguments for both methods, depending on extent of the infestation. If the termites are isolated to one or two areas of the structure with a high degree of certainty they have not spread. Spot treatment is a great option. If the termites are found in many areas of the property, they may be in hidden areas where spot treatment is not effective. In that case tent fumigation will be the only way to insure the termites are eradicated. If you are in a real estate transaction, we would almost always go with fumigation, just for peace of mind. WE NEED Maintenance Questions!!! If you would like to see your maintenance question in the “Dear Maintenance Men:” column, please send in your questions to: DearMaintenanceMen@ gmail.com
IMMEDIATE
RESPONSE Sean & Shelby Goforth 503-517-9027
junkawayhauling@gmail.com Your items picked up are recycled and/or donated Shelby Cell: 971.998.4654 Sean Cell: 971.808.6387 PORTLAND
VANCOUVER
RENTAL ALLIANCE UPDATE AUGUST 2019
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Understanding 1031 Exchange Replacement Property Options
by Roger W. Bowlin, Real Estate Transition Solutions For many real estate property owners, the tenant. the most frustrating component of a tax- Tenant-In-Common Property: deferred 1031 Exchange is the IRS mandated timeline. A quick refresh for Tenant-in-common (“TIC”) property is a form of those who may be unfamiliar with ownership that allows for “fractional ownership” via 1031 1031 exchanges – upon the sale of an investment exchanges. This ownership form is relatively unstable and property in which an exchange is to be performed, the requires a strong operating agreement should an individual sales proceeds must move directly from escrow to a consider it. The three main advantages of the TIC are their “qualified intermediary.” Once the property has closed, ability to pool investor capital to acquire larger properties, the exchanger has 45 calendar days to identify their the lack of restrictions around what type of property can replacement properties and 180 calendar days to close be acquired (e.g. heavy value-add opportunities) and on the properties. Without proper planning, the 45 day the ability to leverage the expertise of an experienced “identification period” can be the fastest 45 days of your operator. life. Delaware Statutory Trust Property: At Real Estate Transition Solutions, we encourage Lastly, Delaware Statutory Trust (“DST”) property preparation in advance of the exchange to alleviate the is a form of ownership that also allows individuals timing pressure. Preparation begins with determining to exchange into “fractional ownership” of property, an owner’s objectives for their replacement property, however, the biggest difference between the DST and followed by assessing all the available options to select TICs is that the properties owned within a DST must be replacement properties that best meet the owner’s financial and lifestyle objectives. In an attempt to provide fully stabilized and secured at the time of exchange. This requirement, put forward by the IRS and SEC, shifts the some preliminary exposure to the available replacement property categories, the following is a high-level overview focus of the DST toward stable potential cash flow. In addition to the emphasis on stability, DSTs can have up to of the main categories of exchangeable replacement 1,999 investors. Therefore, the DST minimum investments properties: can be as low as $100,000. The low minimums enable Fee-Simple Property: exchangers to acquire multiple DSTs with their exchange proceeds, effectively creating their own diversified Fee-simple property is a broad category consisting of all portfolio of institutional real estate. property types (residential, multi-family, commercial, industrial, etc.) owned outright either by a sole individual/ This overview of replacement property categories is by couple or through a legal entity such as an LLC or Partno means exhaustive. If you are interested in learning nership. Generally, fee-simple property presents all the more about tax-deferred 1031 Exchanges and the various opportunities and demands of owning and controlling options available to you, I invite you to attend our FREE your property, including the ability to buy, sell, refinance, Fall 2019 Investment Property Owner Education Lunch: and improve as you please, as well as the effort required 1031 Exchange Basics in Portland. This complimento manage and often guarantee the property. tary, informative education lunch will provide you with an overview of 1031 Exchanges, why they are used and Net-Lease Property: how they work, the benefits vs. risks, and what property Net-lease property is a sub-category of fee-simple in that types qualify. If you are interested in attending our FREE the property is often owned “fee-simple” however the 1031 Exchange education lunch and would like for more tenant is on a “net-lease.” Net-lease means the tenant is information, please email Nancy Duckett at nduckett@ responsible for bearing some, if not all, of the operating re-transition.com. costs. Generally, these tenants are commercial entities For a more on 1031 Exchanges and Real Estate Transition who enter in to longer-term leases ranging from 3-30 Solutions, visit our website at www.re-transition.com. years. The tenant may be responsible for property taxes, insurance, and maintenance thus reducing the amount of Roger W. Bowlin, Founding Partner of Real Estate effort required by the owner. Net-lease properties tend to Transition Solutions, provides exit strategy analysis, be more expensive, depending on the size and quality of (continued on page 7) 6
RENTAL ALLIANCE UPDATE AUGUST 2019
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1031 Replacement Property Options CONTINUED FROM PAGE 6
execution, income and equity replacement options for investment property owners. If you have questions relating to your investment property ownership, please email him at rwbowlin@re-transition.com or call (206) 686-2211. This is for information purposes only and does not constitute an offer to purchase or sell securitized real estate investments. Such offers are only made through the sponsors Private Placement Memorandum (PPM). DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last two years, and reasonably expects the same for the current year) and accredited entities only. If you are unsure if you are an accredited investor and/ or an accredited entity, please verify with your CPA and Attorney. There are risks associated with investing in real estate and Delaware Statutory Trust (DST) properties including, but not limited to, loss of entire investment principal, declining market values, tenant vacancies and illiquidity. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated. Diversification does not guarantee profits or protection against losses. Because investors situations and objectives vary this information is not intended to indicate suitability for any particular investor. This material is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation. Securities through Concorde Investment services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Real Estate Transition Solutions is independent of CIS and CAM.
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A Big Thanks to those who donated to our Under A Starry Night Event Acorn Property Management From Here 2 There Alita Dougherty The Garcia Group National Tenant Network John’s Waterproofing Sealcoat Specialties Elaine Elsea Stegmann Agency Real Estate Roofing Phil & Sue Owen Advantaclean Layna’s Cleaning Diana Lindemann Lynn Peterson Apollo Drain & Rooter Services Northwest Pest Control Kennedy Restoration Warren Allen LLP Broer & Passannante Contract Furnishings Mart Ken Schriver Cindy Robert Beutler Exchange Junk Away Hauling Deborah & Gary Schneider Rarebird Property Management Gateway Property Management Charles Kovas Law Frost Pest Management Pacific Office Automation Livable This years Auction and Raffle earned $5,040.00, which will go to support Snow Cap and RHA’s community relations committee in supporting housing agencies in our community. RENTAL ALLIANCE UPDATE AUGUST 2019
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