July 2019
A monthly newsletter published by the Rental Housing Alliance Oregon
rha est. 1927
www.rhaoregon.org
In this issue: Dinner Meeting ............... page 2 RHA Calendar of Events ............................. page 2 President’s Message ..... page 3 RHA Annual Picnic............ page 4 Dear Maintenance Men......................................... page 5 Property Performance Metrics................................... page 6 Landlording 101................. page 8
RHA Calendar of Events
DATE
EVENT
LOCATION
TIME
INFORMATION
7/10
Board Meeting
RHA Conference Annex
4:00pm
7/17
Under a Starry Night
RHA Conference Annex
6:00pm
7/20
Mentor Round Table
RHA Conference Annex
11:00am
8/7
Annual Picnic
Oaks Amusement Park
2:00pm
8/22
Mentor Round Table
RHA Conference Annex
6:00pm
DATE
CLASSES
LOCATION
TIME
INSTRUCTORS
7/9
Screening Class
RHA Conference Annex
11:00am
Marcia Gohman w/National Tenant Network
7/12
Screening Class
WebEx
11:00am
Marcia Gohman w/National Tenant Network
7/18
Screening Class
WebEx
7:00pm
Marcia Gohman w/National Tenant Network
7/23
Screening Class
WebEx
7:00pm
Marcia Gohman w/National Tenant Network
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
See above for details See page 4 for more details
For additional class/event information visit: https://rhaoregon.org/education 2
RENTAL ALLIANCE UPDATE JULY 2019
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President’s Message Summer Traditions
My wife attended several scientific conferences in Italy this year, with the last one held on the Amalfi Coast in June, where I joined her for a little R&R. We arrived at the train station in Vietri sul Mare on a Monday evening, but when we stepped off the platform there wasn’t a taxi to be found. Nor a station attendant. As she gave me one of those looks, I said, “it’s a small town, the hotel can’t be that far;” we picked up our bags and started hiking down the stairs that cut between multiple levels of the serpentine roadway leading from the station down the hill into the town center. As we came into the main piazza, we realized why nobody was at the station. The town was holding its annual Festival of its patron San Giovanni Battista (John the Baptist). As we tried to navigate with our baggage through the narrow streets crowded with tourists, citizens, families, and a 40-piece brass band, I felt like a salmon swimming upstream. Reflecting on the situation, I was struck by how familiar the town festival felt, even though it was a modern version of a centuries-old Catholic celebration. Summer is a time of celebration in communities all over the world, including dozens of cities and towns here in Oregon. Every week there are pancake breakfasts, main street parades, carnivals, car shows, and more somewhere in the area. Some are large events, like the Portland Rose Festival or the St. Paul Rodeo; others are more small-town affairs like Prineville’s Western Days or McMinnville’s Turkey Rama. All these events are opportunities for people to gather and celebrate being part of a community, something most of us greatly enjoy. Rental Housing Alliance Oregon has its own summer traditions, providing our members an opportunity
to celebrate being part of our community of housing providers. Our annual Under a Starry Night fundraiser will be held on Wednesday July 17 at our offices on NE Weidler in Portland. We hold this event in lieu of our monthly dinner in July, and it is a wonderful opportunity to help raise funds for supporting local housing agencies in our community, a longstanding tradition at RHA. If you are a supplier to our industry, this is a great way to connect with the membership of RHA and support our community. I encourage you to donate products or services that may be auctioned off at this event. If you are a regular (landlord) member of RHA, please come out and support our organization, our affiliate members, and our charities. As we have for dozens of years, RHA will be holding its Annual Picnic on Wednesday August 7 at Oaks Amusement Park in Sellwood, and the price can’t be beat! RHA members can purchase an adult dinner ticket for $5; children 12 and under eat free. We are also providing Deluxe Ride Bracelets for $12.50, which is more than 40% below the single-bracelet price at Oaks Park! This is another great opportunity for all our members and their families to connect with one another in the environment of a “company picnic.” If you or your organization are not yet a member of RHA, join now to take advantage of this benefit! We are still signing up sponsors at all levels for this event. More information about both Under a Starry Night and our Annual Picnic may be found on the Calendar/Event page of the RHA website. I hope to see you at both! 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 JULY 2019
3
RHA Oregon Annual Picnic
Bring an ageappropriate prize if you want to play Bingo!
at Oaks Park Picnic Area #1 Wednesday August 7
THANK YOU!
2019 Early Picnic Sponsors
GOLD SPONSOR Broer & Passannante 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:
2:00 Registration Open 4:30 Vendor Fair 5:00 BBQ Dinner BINGO! To follow dinner
John’s Waterproofing Beutler Exchange Group
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.
Save the date for the
THANK YOU!
7TH ANNUAL RHA OREGON VENDOR FAIR
SILVER SPONSOR
Come visit with Apollo Drain & Rooter Services, Real Estate Roofing & Mold Solutions, Inkberry Printing & Promotional, Real Estate Transition Solutions, Bluestone & Hockley, The Garcia Group and more!
2019 Early Picnic Sponsors
Real Estate Transition Solutions Bluestone & Hockley Real Estate Services Frost Integrated Pest Mgmt. The Garcia Group
BRONZE SPONSOR From Here 2 There Real Estate Roofing & Mold Solutions 4
RENTAL ALLIANCE UPDATE JULY 2019
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Dear Maintenance Men by Jerry L’Ecuyer & Frank Alvarez
Dear Maintenance Men: Two years ago we installed in our single family home rental an AO Smith Proline GUC-50 400 50 gallon commercial grade water heater. It was installed by a licensed plumber with whom we have always had good experience. From the get go the water heater would make a loud humming noise several minutes after the hot water is used for any long period of time, such as when the shower runs. It isn’t just a low humming noise; the volume is similar to someone playing one note on a clarinet down in the basement! When I asked the plumber, he didn’t seem to know why it did that. By the way, we have a whole house salt-free softener water filter system. Can you please tell me if there is any solution to this? Shari Dear Shari: Thankfully, your issue is not unique and not costly. The water heater was being gas starved (if it is what we think it is.) Most likely the plumber did not replace the existing gas line with a larger diameter “gas appliance, flex supply line” which is why it whistles during the “fire up” and burner function. Dear Maintenance Men: I have had rental properties most of my life and I’m continually plagued with dry rot damage on my fascia boards. Almost without exception, the rot occurs on the corners where two fascia boards meet. I’ve resorted to cutting and replacing the damaged wood with new wood but would like an easier solution. Everyone I talk to has a different suggestion. The products on the market for treatment and repair of dry rot range from inexpensive to very costly. This brings me to my questions. First, why do I keep getting dry rot? What can I do to prevent it from happening again? And finally, what is the best way to repair wood that is damaged by dry rot. John Dear John: Sounds like dry-rot is setting into the joints. Surprisingly dry-rot is caused by damp conditions that encourages the growth of a fungus that eats the wood and results in a cracking and powdering of the lumber. Look for causes of wet or damp wood around the structure. Some causes may be sprinklers wetting the area compounded by a lack of air circulation caused by bushes or trees. Another issue might be poorly placed or installed drip rails allowing water to accumulate or drip down onto the fascia boards. A simple solution will be to seal any wood end pieces to inhibit water www.rhaoregon.org
intrusion into the end grain of the lumber. Any corners or joints should be caulked to keep water out of the joints. Best to caulk both the front and back side of the joint if possible. Keep the paint fresh on any exposed wood. Dry or chalky paint will also allow moisture to penetrate and contribute to dry-rot. Dear Maintenance Men: I’m starting a rehab in my unit’s bathroom and thinking of replacing the shower curtain as part of the work. A shower curtain is a fast and easy job. What are the pros and cons of a shower door versus a shower curtain in my rental unit’s bathtub? How do you install a shower door? I don’t want to poke holes in the bathtub. Bryan Dear Bryan: While appearing as a guest on “The Tonight Show” one evening many, many years ago, famed hotelier Conrad Hilton was asked by his host (Johnny Carson) whether he had a “message” for the American people. With great gravity, Hilton paused momentarily before turning to the camera. “Please,” he pleaded, “put the shower curtain inside the tub!” Keeping with Mr. Hilton’s thoughts, we are big fans of shower doors as opposed to shower curtains, because residents also leave the shower curtain outside the tub. Shower door installations are a great do-it-yourself project, because it is easy to do and the results looks great. After removing the existing shower curtain, clean the tub and walls to remove any accumulated soap scum. Measure the tub ledge wall to wall and subtract 3/16th of an inch (to leave room for the wall channels) and transfer the measurement to the bottom rail track of the shower enclosure. After measuring twice and cutting once, temporally set the bottom track on the tub ledge and tape it in place. Next, set the wall channels in place, use a level to make sure it is plumb with the wall. Mark the mounting holes of the wall channel with your pencil. Do the same thing for the other side. Remove the channels and before drilling, center punch the hole to keep the drill bit centered. If drilling through tile, use a ceramic drill bit. (Do not center punch tile.) Once you have made your holes, insert wall anchors. Now you are ready to set the bottom track. Use adhesive caulk and if you feel the track may be abused, also use some Liquid Nails adhesive at several spots under the track. Remove any excess caulk and then use painter’s tape to temporally hold the track in place. Before fitting the side channels, run a bead of adhesive caulk on the backside of the channel. Install the channel, use the supplied screws and bumper to fasten the channel to the wall, repeat on the other side. Wipe away any excess caulk. To install the top rail channel, measure from wall to wall at the top of the wall
(continued on page 7)
RENTAL ALLIANCE UPDATE JULY 2019
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Property Performance Metrics: Return of Investment vs. Return on Equity
by Roger W. Bowlin, Real Estate Transition Solutions Quality data is the cornerstone of transition of the property through either a sale and tax effective decision making. While it is deferred 1031 Exchange or a sale and payment of the rarely possible to have perfect associated tax liability, this metric falls short because information, especially regarding the appreciation many Oregon investment properties future projections such as how long our current market have enjoyed over the past 5, 10, and 20+ years is not cycle will last, owners can and should have a firm grasp considered. To capture the property’s appreciation and of both their properties’ current and historic operating compare replacement property options, we must turn to data. the Return on Equity metric. We work regularly with owners who are considering transitioning their properties for a myriad of reasons. In today’s market many owners are motivated to transition due to: the market cycle, the increasingly difficult regulatory environment, their own personal lifestyle choices, elimination of active management, and/or a desire to improve current cash flow. All these factors are legitimate considerations that we take into account when developing a transition plan. However, many of these
Return on Equity is calculated by comparing the earlier defined net cash flow to the implied equity held within the property. Determining the implied equity of a property requires the owner have a good pulse on the current fair market value of their property. There are multiple ways to determine this value, an overview of which warrants an article on its own. Once a value has been determined, the outstanding mortgage balance and projected closing costs are deducted to arrive at implied
factors are personal decisions and others, such as what new rental regulation may be passed in the coming 2-5 years, are difficult to predict with any level of certainty. That being said, property performance metrics are grounded in verifiable data and should be given sufficient attention.
equity. The current net cash flow is expressed as a percentage of the implied net equity, resulting in the property’s ROE. This metric is critical for comparing the cash flow to what could be achieved were the property to be sold and 1031 exchanged.
Cash flow metrics can be viewed in two ways: the first is as a Return on Investment or “ROI”, the second is as a Return on Equity or “ROE”. Return on Investment tells an owner how well their original investment performed during its life. Calculation of this metric is done by comparing the net cash flow (rental income, less operating expenses and debt servicing costs) over the years to the original investment made in the asset (often the down payment on the property plus any large capital expenditures that improved the property). ROI is the metric an owner wants to use when asking themselves, “Was this a good investment?” When considering a 6
RENTAL ALLIANCE UPDATE JULY 2019
Since many rental properties in Oregon have appreciated at a faster rate than the properties’ rents and net cash flow, it is not uncommon for Oregon rental properties to produce ROEs ranging from 2.5% - 3.5%.* If cash flow is a priority to an owner, they may want to consider 1031 Exchange replacement property options that improve their current potential income such as Delaware Statutory Trusts (for an overview of Delaware Statutory Trusts, visit our website and download our FREE Guide: Investing in Delaware Statutory Trusts). If you are interested in learning more about these important property performance metrics as they relate to your property and what other options are (continued on page 7)
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Dear Maintenance Men CONTINUED FROM PAGE 5
Bio:
channels. Subtract 1/16 of an inch and cut the top channel to that length. Again, measure twice. The top channel should fit snug between top of the wall channels. Lastly it is time to hang the doors and adjust the fit. Most doors come with good instructions, read them, as there may be details not included in our explanation.
contact us. We are available throughout Southern California. For an appointment please call
If you need maintenance work or consultation for your building or project, please feel free to
Buffalo Maintenance, Inc. at 714 956-8371 Frank Alvarez is licensed contractor and the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 20 years. He is also a lecturer & educational instructor and Co-Chair of the Education Committee of the Apartment Association of Orange County as well as being Chairman of the Product Service Counsel. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance.com For more info please go to: www.BuffaloMaintenance.com
WE NEED Maintenance Questions!!! If you would like to see your maintenance question in the
Jerry L’Ecuyer is a real estate broker. He is currently on the Board of Directors and Past President
“Dear Maintenance Men:” column, please send in your questions to: DearMaintenanceMen@
of the Apartment Association of Orange County .and past Chairman of the association’s Education
gmail.com
Committee. Jerry has been involved with apartments as a professional since 1988.
iInvestors & 1031 Exchanges CONTINUED FROM PAGE 6
available that may improve the current cash flow you receive, feel free to contact us. For more information on 1031 Exchanges and Delaware Statutory Trusts, visit our website at www.re-transition. com and download our FREE Guide: Understanding 1031 Exchanges. Roger W. Bowlin, Founding Partner at Real Estate Transition Solutions, provides exit strategy analysis, execution, income and equity replacement options for investment property owners. If you have questions relating to your investment property ownership, you can reach Real Estate Transition Solutions via email at info@ re-transition.com or by calling (206) 686-2211. *As of June 2019. The information herein has been prepared for educational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. 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 three years) 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. 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 www.rhaoregon.org
situation. Real Estate Transition Solutions offers securities through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Real Estate Transition Solutions is independent of CIS and CAM.
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 JULY 2019
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