metro rental housing journal april 2014

WWW.RENTALHOUSINGJOURNAL.COM • PROFESSIONAL PUBLISHING, INC PORTLAND/VANCOUVERPublished in association with: METRO Multifamily Housing Association; Rental Housing Association of Oregon; IREM & Clark County Rental Association

April 2014Rental Housing Journal Metro

Professional Publishing Inc.PO Box 6244Beaverton, OR 97007

PRSRT STD US Postage PAID Portland, OR Permit #5460

Current Resident or

By Marc Courtenay

As property managers, we’re all aware of the multitude of issues that frequently arise

with unreliable tenants. Late rental payments, disturbing the peace, ille-gal activity, and a general disregard for the property are all problems that typically arise in the property man-agement industry.

Many times, we’re so focused on dealing with the problems prevalent in the property management indus-try that we overlook the tenants that always pay on time; the tenants that take good care of their property, the tenants that are considerate of their neighbors. How do we make sure that those tenants are happy? That they feel appreciated? That they know that we want them to remain tenants as long as possible?

Chances are those good tenants are feeling unappreciated right now; which means that they will have no reason to stay at your property if a better opportunity opens elsewhere.

It’s so important to remember that a rental agreement is between two separate parties, and just like any of us, our tenants like to know that they’re appreciated.

continued on page 7

2. MultifamilyNW – Touch Points: Intentional Customer Interactions4. RHAO – Creating Member Value through Education5. Exit Strategy Pt. II: Repositioning Your Real Estate Assets to Simplify Your Life6. IREM – The Power of Volunteering8. Ask the Energy Expert – Now is the Time to Convert to LED Lighting9. Dear Maintenance Men:

10. Shoptalk11. Ernest F. Oriente – Become a Daily Learner…Today! 13. Dryer Vents: Structure and Cleaning of13. The Mortgage Market is about to Get Smaller14. CCRA – Spring Cleanup has Arrived19. Three MoreWays to Fill those Vacancies

Advertise in Rental Housing Journal MetroCirculated to over 6,000 Apartment owners, On-site, and

Maintenance personnel monthly.

Call 503-221-1260 for more info.

New Rules for Raising Capital for Real Estate Investments

By Darrel DicksonApartmentsForSale.com

Crowd funding rules for real estate changed recently and with the available technology

the landscape for raising funds for real estate investments in the future will be changed.

The Jobs act created an entirely new exemption from registration of the securities act which will permit companies to publicly offer and sell up to a million dollars in securities over 12 months without needing to register.

There are restrictions and individ-ual investors annual income or net worth less than one hundred thou-sand dollars may invest no more than the greater of $2000 or 5% of his or her annual income or net worth.

If his or her income or net worth is higher than $100,000 he or she may invest no more than 10% of annual income or net worth and never more than hundred thousand dollars.

A new type of broker known as a funnel portal must be used to facili-tate the sale. The funnel portal will be required to register with the SEC and other organizations and to con-firm the investors satisfy the invest-ment requirements.

Companies that use the crowd funding process will have to file with the SEC. Certain information of the operating companies involved in raising funds will need to be provid-ed to the SEC: such as the business plan description, company’s capital

structure, and intended use of the proceeds, audited financial state-ments will be required for offerings of more than $500,000. The Offering Company will need to file ongoing reports with the SEC based on rules yet to be determined by the SEC

Crowd funding is an interesting new opportunity for syndicators to raise capital for real estate invest-ments. Real estate operators will be able to raise capital online from groups of investors in an automated way

Real estate investments typically have been illiquid. Investors have plenty of opportunities to invest in stocks and bonds but when it comes to actually access private real estate deals the process in the past has been

difficult for private investors to par-ticipate. Crowd funding will change all of that.

Crowd funding eliminates the barriers that are typically associ-ated with real estate investing such as having the time and expertise, and knowledge to invest can make investing in real estate a challenge. But pulling your money together through crowd funding you can ac-cess investment opportunities that otherwise would not be available to a busy professional to manage a property by themselves. You can have others with the knowledge and experience and the time to manage your real estate investments. In the near future, I foresee that you have

continued on page 3

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Touch Points: Intentional Customer Interactions

By Pam McKenna

Do you ever won-der what your cus-tomer really wants? Do you have a plan

for finding out, or does it happen by accident or not at all? The more you engage with customers the clearer things become and the easier it is to determine what you should be do-ing. So, how often do you engage with the customer and are you inten-tional with your interactions?

Setting up a touch point system will help you create a series of in-tentional interactions with your resi-dents which will help you to better understand their expectations. This can be accomplished utilizing the outlook calendar and will involve the entire team. Start it off with a move in orientation led by the leasing team using the opportunity to educate your residents on what your com-munity has to offer. Include where to

find the nearest trash and recycling areas, how to use all the appliances in the apartment and any other spe-cific information that would start them out on a good note.

The next touch point will be with-in 24 hours of move in. Use this as an opportunity for the maintenance team to get involved. Include a move in gift (ie; picture hangers, plunger, laundry detergent) delivered to the resident. Ask the resident if every-thing in the apartment is working properly. Be prepared to respond immediately and make repairs right there on the spot.

One week later have the manager call the resident to welcome them to the community, ask how things are going in their new home and if there is anything they need to make their experience better. Confirm they are clear on the rent payment process and have all the information they need to get set up for auto payments. Provide them with information on all

the local businesses (ie: dry cleaning, pet services, restaurants, car wash).

One month after move in send your resident a personalized hand written card or emailed video card from the entire team to let them know how much you appreciate them liv-ing at your community.

At the 45 day mark invite them to a resident event that includes op-portunities to network with other residents and start to build a sense of community. Hold these events once every three months to maintain com-fort levels and to ensure consistency.

Additionally, there are third party companies you can engage to send out customer surveys as an addi-tional touch point. These can be sent right after the move in and after ev-ery maintenance request is complet-ed. The survey allows you to listen to customer feedback but listen careful-ly and respond fast. If you respond to their comments they will continue to give you more feedback because they

know you are listening and that you care.

The conventional resident experi-ence typically includes focused at-tention during the sales process but once they are handed their keys they are on their own unless something goes wrong. Then forty five days be-fore the lease ends we slap a note on their door with a rent increase.

If you want to want to be in touch with what your residents really want, start by setting up intentional interactions. Don’t wait until it’s too late. With today’s busy schedules we need to plan ahead and be more pur-poseful to stay in touch. The results will provide an improved customer experience, a stronger sense of com-munity and reduce resident turnover. In the end this shows your customer they are truly valued.

April 1, 20148:00 AM - 12:00 PM Understanding Maintenance for Managers (Portland, OR)

April 8, 2014 8:30 AM - 12:30 PM Tax Credit Housing Class Part I (Portland, OR)

9:00 AM - 11:00 AM 10 Common Fair Housing Mistakes to Avoid (Vancouver, WA)

April 9, 2014 8:30 AM - 12:30 PM Tax Credit Housing Class Part II (Portland, OR)

2:00 PM - 4:00 PM Section 8 Procedures Class (Portland, OR)

April 10, 2014 7:00 AM - 4:00 PM EPA Lead-Based Paint Renovation Certification (Portland, OR)

April 11, 2014 12:00 PM - 1:00 PM It's the Law Lunch Time Series: Domestic Violence - Making Sense In Challenging Situations (Portland, OR)

April 14, 2014 8:00 AM - 12:00 PM Mold Awareness & (Portland, OR)

April 15, 2014 8:00 AM - 5:00 PM CAMT: Electrical Repair and Maintenance (Portland, OR)

April 15, 2014 9:00 AM - 5:00 PM CAM: Human Resource Management Part I & II (Portland, OR)

April 16, 2014 7:30 AM - 9:00 AM Spring 2014 Apartment Report Breakfast (Portland, OR)

April 17, 2014 10:00 AM - 12:00 PM Washington County Section 8 Voucher Forums (Hillsboro, OR)

April 18, 2014 9:00 AM - 3:00 PM NALP: Leasing Demonstration and Resolving Objections (Portland, OR)

April 21, 2014 9:00 AM - 5:00 PM CAM: Marketing (Portland, OR)

April 22, 2014 8:00 AM - 5:00 PM CAMT: Electrical Repair and Maintenance, Part II (Portland, OR)

9:00 AM - 1:00 PM CAM: Human Resource Management Part I & II (Portland, OR)

April 23, 2014 1:00 PM - 3:00 PM Roofing Class (Portland, OR)

6:00 PM - 8:00 PM Washington County Section 8 Voucher Forum (Hillsboro, OR)

April 25, 2014 9:00 AM - 1:00 PM New Hire Class (Portland, OR)

April 29, 2014 9:00 AM - 2:00 PM CAM: Research, Analysis and Evaluation (Portland, OR)

Multifamily NW

Events Calendar

Join us on Thursday, May 15th at the Portland Art Museum as we honor the “Best of the Best” in the Multifamily

Industry with our prestigious ACE Awards!

Individual tickets are $85 each or tables of 10 are available for $800.

Contact Kristen Davies at [email protected] or

800-632-3007 for more information.

Pam McKennaMultifamily NW President

Rental Housing Journal Metro • April 2014 4


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an opportunity to browse different investments from your computer looking at opportunities in different metropolitan markets throughout the country.

Real estate is becoming more effi-cient with sites like Zillow and oth-ers providing incredible amounts of data to real estate investors. You are going to see more efficiency in the private real estate investment mar-ket.

Because of the change in security laws more investors are going to have crowd funding opportunities and it is going to open up opportu-nities for not only accredited inves-tors but also with the jobs act crowd funding rules will see retail investors participating in the future.

Before September 23, 2013 it was illegal for real estate investment op-erators to publicly advertise that the private company was seeking fund-ing. The new rule change allowed operators throughout their fundrais-ing efforts to market to persons on Facebook or twitter or other social media outlets.

Different real estate investment websites will be developed to raise money on line in the near future. It will be fun to watch which compa-nies become the leaders in this new frontier of raising capital for real es-tate investments.

New Rules ...continued from front page

Safety Addendum – M106 OR-WA

The Safety Addendum was created to enhance liability pro-tection for the landlord. Each example is carefully worded to address concerns from actual oc-currences and lawsuits filed. If you don’t already take advantage of this form, make sure to add it to the list of addendums you have every tenant sign at move-in. National Window Safety Week

is April 6th – 12th and the Safety Addendum includes critical lan-guage that reminds tenants that open windows present a poten-tial risk of falling. While many of the statements can seem obvious, having this document in your tenant’s file goes a long way to exhibit your due diligence and protect your assets.



• Elizabeth Carpenter, President • Elaine Elsea, Treasurer • Cari Pierce, Office Manager • Teresa Carlson, Member Services • Suzanne Fullerton, Member Services Asst. • Pam Van Loon, Bookkeeper

10520 NE Weidler Portland, OR 97220 (503) 254-4723 • fax (503) 254-4821 [email protected] • www.rhagp.org

By Liz Carpenter Rental Housing Alliance Oregon President

I’m a cheerleading Mom. In the last 5 years, I’ve hauled 2 teen-age girls to countless games and

cheerleading events all over the Northwest. I love supporting my

daughters Frances and Alexis.The first requirement to being in

high school cheerleading is good grades. In my family, education is al-ways first, cheerleading second.

At RHA Oregon, education is pri-ority one. We create value by teach-ing our members how to make their rental businesses profitable, how to

be a better or even a first time suc-cessful landlord, why something as mundane as building codes are im-portant, turnover technics, and our online tenant screening just to men-tion a few.

When our members make better business decisions, more people are served and our entire industry does better. This month, take an extra moment with the calendar and look for classes that could help you bet-ter your business. Like a cheerlead-er, RHA Oregon is here to serve its members and encourage, make that root for, their victory.

Another victory we are working towards is closing the gap between homelessness and the housing com-munity. Rental Housing Alliance members are volunteering at JOIN; a Portland based non-profit.

“This is a marriage made in heav-en,” said Lynne Whitney, RHA board member. “Filling this need, being part of the community, serving peo-ple who need a hand into housing, is our motivation. It’s who we are. What is so impressive about JOIN is how thorough the organization is in helping people. We came to help serve 60 people, but left with such a warm impression and feeling of gra-ciousness.”

Lynne Whitney and Tony Kava-nagh RHA Community Relations/Donations Chairman got the ball

rolling and now we are inviting all RHA members to join in. Please call the office for more information.

Did you know at the RHA Dinner meetings we highlight a RHA Affili-ate Businesses? It’s a great way for the RHA community to support the businesses that support our industry.

We’ve had a lot of changes at RHA and none of it would have happened without our committed volunteer Board of Directors and our staff. If you see one of them, please thank them for all the extra hours and ex-tra heart they’ve given in the last few months.

RHA Oregon is moving forward, growing, and focused on serving our members through education. We mentor; come along side, and coach. Creating member value, serving our community, and helping businesses grow- we’re your RHA.

Sincerely,

Liz Carpenter, Rental Housing Al-liance Oregon President

Since 1927, the Rental Housing Alliance Oregon has set the stan-dard for community participation by landlords providing affordable and quality housing.

Attend one FREE hour-long class conducted by a credit reporting agency representative at the RHAOregon office and you will be able to retrieve reports on your home computer in minutes

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Creating Member Value through Education

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PROPERTY NAME

NAME

CITY STATE ZIP

Send for your FREE subscription to Professional Publishing, Inc., PO Box 30327, Portland, OR 97294-3327 • (503) 221-1260 • fax (503) 221-1545

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Liz Carpenter RHAOregon President



Cliff Hockley, PresidentBluestone & Hockley Real Estate Services

As Baby Boomers age, they realize that things may need to change with how they

handle their real estate investments. First of all, they may be tired of deal-ing with the details that are involved with the day to day operations of real estate investments; secondly, they start having to come to grips with their mortality and may not want their spouse or family to have to deal with those investments. Finally they may be concerned about the tax im-plications involved with selling their assets; inasmuch as the direct sale of a property could cost forty percent or more of the capital return.

Making decisions regarding the future of existing real estate invest-ments is much like selling a business. Typically, most real estate investors spend a lifetime [40 – 50] years build-ing a retirement vehicle, poured blood, sweat and tears into their in-vestments to build a legacy. They are now faced with decisions on how to maintain a sufficient cash flow dur-ing their lifetime and transitioning their assets either to their spouse, children, grandchildren or charitable organizations.

There are many different direc-tions baby boomers can choose to re-position their real estate investments to prepare for retirement and / or to reduce the time and energy needed to manage them.

These include:

1. Selling their real estate invest-ments

2. Family succession planning

3. Selling to partners

4. Contributing to a charitable orga-nization

5. Repositioning your portfolio

6. Using a 1031 exchange to invest in an UPREIT (Umbrella Partnership Real Estate Investment Trust)

7. Tenant in Common Investments

8. Hiring a property manager

Sale of the real estate investments Typically when investors choose to sell their real estate holdings, they are faced with the following costs, taxes and possible prepayment pen-alties:

1. Federal Taxes Federal capital gains: 20% Federal Medicare tax: 3.8%

2. State capital gains (depends on state) 9.9% (Oregon) 13.3% ( Cali-fornia) RED FLAG: Depending on the

number of 1031exchanges involved with their holdings, the state’s reve-nue departments (tax collectors) will come after the investor to recapture taxes one may have put off paying in the past closings.

Should you die before the the state gets its share, the beneficiaries basis in the properties received from the decedents estate is valued at the properties Fair Market Value at date of death or 6 months later. (The es-tate has an option regarding the val-uation date.)

3. Real Estate Transfer Taxes** (state and county) See below for exam-ples: **Washington State collects 1.28% and Clark County collects .5%, equaling a total of 1.78% of the sale of transfer of owner-ship of real property. **Wash-ington County, Oregon: The cur-rent rate is $1.00 per $1,000.00 of consideration. The transfer tax in

Washington County is customar-ily divided equally between the seller and the purchaser. ** Go to this chart to decode the transfer taxes in California. http:// www.chicagotitletransfertax.c om/

4. Local city and county business tax-es Note: (in the City of Portland, Multnomah County, Oregon, the sale of a property could trigger a 2.2% city tax plus a 1.45% county tax, if one does not reinvest the funds via a 1031 exchange.

5. Federal depreciation recapture, which is 25% of the depreciation written down over the life of the ownership of the property. RED FLAG This could be a huge num-ber depending on the number of

1031 exchanges one has closed to get to the final exit sale since with each 1031 the property basis is typ-ically adjusted , though you can avoid those taxes at death. Upon death, property basis is “stepped up” to Fair Market Value at date of death or 6 months later.

6. Prepayment Penalties: Many prop-erties have underlying financing issues the most important being the prepayment penalty. With Commercial Mortgage Backed Securities (CMBS) loans, an inves-tor may have yield maintenance clauses and with other loans there may be percentage payoff between 1 and 5 percent of the outstanding loan balance, which might last over ten years. These penalties are a significant is-

sue and need to be calculated into the costs of sale as one makes the critical decisions to sell and exit the real es-tate investment marketplace. These significant expense hits (Tax and pre-payment penalties) frequently make real estate investors uneasy, so they tend to look at other ways to exit or reposition their real estate holdings.

Family Succession Many investors dream of leaving

Exit Strategy Pt. II: Repositioning Your Real Estate Assets to Simplify Your Life

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EXIT

... continued on page 15



IREM Chapter #29 11575 SW Pacific Hwy Suite 210 Tigard, OR 97223 (503) 228-0002 (503) 406-2003 fax

President - Cammie Allie, CPM • President Elect - David Genrich, CPM • Treasurer - Stephanie MacPherson • Additional Officers - Julie Muir, CPM, Traci McCauley, CPM, Kathi Pearce, CPM, Tammy Mills, ARM, Kathi Pearce, CPM, Jeanna Rae Petty, CPM, Jennifer Gerritz, CPM, Chris Pasteur, ARM • CPM Admissions Contact - Traci McConley, CPM • ARM/ACoM Admissions Contact - Tammy Mills, ARM AMO Admissions

Contact - Cliff Hockley, CPM • Education Contact - Kathi Pierce, CPM • Income/Expense Contact - Nutan Engels, CPM and Michelle Schiffer, CPM

By: Julie L. Muir, CPM®

Some say when

there’s disconnect be-tween fulfillment and

satisfaction in ones’ life, that people will naturally drift to volunteering. Others say that when boredom sets in, the mind craves stimulus and varying perspectives, and that these are the true drivers behind volun-teerism. Whatever the reason push-ing us to join and “drink the Cool-aid”, the effects and outcomes of that choice can be quite powerful. While the beneficiary of that service or work is definitely provided a “gift” in some manner or another, the giver is likewise “gifted” and sometimes even more profoundly.

We don’t just wake up one day and say “I think I’m going to volun-teer for something today”. No, the shift (to volunteer) happens more gradually…curiosity takes hold and then directs our intentions and ac-tions. Once the waters have been

tested and that first burst of energy and strength is felt, volunteering be-comes a quest (an obsession even), to feel even higher energy-bursts with each act of kindness. Soon, the volunteer realizes they’re receiving benefits. Benefits such as a sense of satisfaction, a renewed purpose and quite simply...feeling happier!

In their book “The Healing Pow-er of Doing Good”, authors Peggy Payne and Allan Luks provide medi-cal documentation that volunteer-ing strengthens the sense of identity, improves insomnia and strengthens the immune system. Further, im-provements in self-esteem, com-munication skills, empathy—even transforming our own insecurities or phobias—can be an unintended but welcome consequence of our good deeds.

And, there are different kinds of volunteering altogether. For instance, when we volunteer for IREM, it’s referred to as “skills-based volunteering” which stems from our specialized knowledge

of real estate management. And when many ban together for the same cause, collectively, our abili-ties strengthen the infrastructure and governance of the association which in turn, bonds us even more closely while we enhance and meet IREM’s mission. And, while we oftentimes begin with the intent of helping oth-ers meet some unfulfilled need, even when we decide to take a back seat and let others take over, the effects of our experiences linger long after.

Yes, the old cliché is accurate: “you get more out of volunteering than you put into it”. I should know because I’ve been volunteering since the mid-1990’s. And, I can’t even be-gin to quantify how much volunteer-ing for IREM has enriched my life. It’s transformed this once shy, insecure and cautious person, into an author, instructor, mentor, public speaker and artist (to name a few). Powerful...to say the least!

If you’re contemplating dip-ping that toe in the water but aren’t quite sure where or when to do so,

let your curiosity, boredom or inse-curities give you a little nudge. Or, call a current volunteer in your circle and listen to their excitement as they describe the many rewards they’ve experienced in their volunteerism. Pretty soon, you’ll want to dive in head-first without any water-wings...because of the mere joy it can pro-vide. Dual benefits.

You don’t have to be an expert or have special skills...you just need enthusiasm, a good heart, the will-ingness to do the right thing and the ability to spend just a little bit of your time to better a worthy-cause. Enrich someone’s life and grab that POWER while enriching your own life expo-nentially. I’ll be waiting to say “I told you so!”

Julie L. Muir, CPM® is a Senior

Real Estate Manager with CBRE, Inc. and a Senior Vice President of IREM®

The Power of Volunteering

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Here are just a few ways to show your tenants that they are appreci-ated:

Be sure to take their concerns seri-ously. If your tenant calls to complain about loud music at midnight, or un-authorized vehicles in their parking spot, take prompt action and make sure that you advise them of both the action and the outcome; don’t make them complain more than once about the same issue.

Fulfill the promises that you make. If you promise a tenant a new dish-washer or new carpeting, be sure to fulfill that promise. Don’t make them ask you about it. Just schedule a time

and do it.Respond promptly to any and all

maintenance requests. If a tenant is responsible and takes good care of the property, they shouldn’t have to wait three months to have their stove repaired.

Bend the rules – just a little. Should you wave a late fee – due to a mix-up with the post office for a reliable ten-ant that is never late with their rent? While opinions vary, remember that a good tenant is like a good custom-er, and it may be appropriate to bend the rules now and then. That’s not discrimination; that’s good business sense.

Give them a gift. A gift card to a local store at lease renewal time, or a card on their birthday will make a tenant feel appreciated, and build loyalty in the process.

There are many ways to make a good tenant feel appreciated, with tenant stability and timely rent pay-ments the ultimate payoff. What more could a property manager want?

from PropertyManager.com a Ser-vice of AppFolio

Appreciate your Tenants ...continued from front page

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Now is the Time to Convert to LED Lighting

By Mark Whitney, PGE lighting expert

Q: My lighting supplier keeps men-tioning LED light-ing? Is this technol-

ogy cost-effective for upgrading my common area lighting?

A: You bet it is. Energy-efficient and long-lasting LED lighting is ideal for common areas where lights remain on for long periods. Thanks to improved technology and lower costs, LED lighting is rapidly taking over the retrofit market. Factor in all the benefits of LEDs, and you’ve got a lot of reasons to switch.

Here’s one more: Sign up for an energy-efficiency consultation with PGE in April or May, you could win up to $1,000 toward a lighting up-grade. Sign up and watch our new LED video at PortlandGeneral.com/LightSavings.

Five reasons LED lighting makes sense†1. Reduces maintenance costs and

hassles. LED lamps last up to 25 times longer than halogens and

other incandescent lighting. You could go years without replacing a light.

2. Boosts curb appeal. LEDs make your property more attractive, drawing potential residents in the door. LEDs also increase the prop-erty value.

3. Increases tenant retention: Attrac-tive lighting upgrades make your property more inviting, which can reduce turnover.

4. Improves safety: LEDs provide truer color and more even light in common areas, exterior walkways and parking lots.

5. Controls energy costs: Save up to 75 percent on lighting compared to current technology.

The best areas to switch and save†

These are among the most effec-tive places to upgrade to LED light-ing. Many qualify for Energy Trust of Oregon cash incentives, which can significantly decrease the final cost of your upgrade.

1. Track lighting. Replace incandes-cent/halogen track lights with LED directional lamps. You’ll save

energy without sacrificing light quality. See a full payback in one to two years.

2. Recessed cans. LED recessed can lights use one-fourth the energy of incandescent or halogen lamps. Plus, “dim-to-warm” options shift warm like a sunset as they dim to create an inviting atmosphere.

3. Exterior lighting. Compared to metal halide or high-pressure so-dium lights, LEDs use 50 to 70 percent less energy and last up to four times longer.

4. Overhead fluorescents. In many cases, LEDs can offer better per-formance and appearance than fluorescent ceiling fixtures while

using 25 to 50 percent less energy. Retrofit kits and new fixtures have very long lifetimes.

Get a free consultation, plus a chance to win $1,000!

Turn to the experts – the PGE Energy Experts. We offer a free, no-ob-ligation energy-efficiency consultation

that will help shine some light on where and how you might save. You’ll receive practical information on how to quickly cut lighting waste and control your bot-tom line. Request a consultation by May

31 and you’ll automatically be entered for a chance to win one of 10 lighting

upgrades valued at up to $1,000 each. Request your consultation at Port-

landGeneral.com/LightSavings or call 800-822-1077. If you’ve already had a consultation, you can still simply

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† Source: EnergySavers.gov

If you have questions you’d like to have answered in future “Ask the

Energy Expert” columns, please e-mail [email protected].



Dear Maintenance Men:

How can I add more storage to my utilitar-

ian type bathrooms? The residents com-plain that they need to store their toilet paper in the hallway! Please list a few suggestions on what to do?

Robert

Dear Robert:It does seem bathrooms are some-

times designed as an afterthought. Sink, toilet, bath and that is it. A modern bathroom will take into consideration the need for storage, electrical devises, personal hygiene etc. The first item that comes to mind is installing a bath sink cabinet. An old style cabinet might only have a set of doors under the sink. We find this is not adequate and a cabinet should have drawers along with ac-cess to under the sink. The drawers can store hair dryers, and all man-ner of personal bath items. A unique system we like utilizes the space be-tween the studs in the wall. Cabinet doors or mirrors can be used to cover storage in the walls. The wall storage is perfect for toilet paper, rolled up towels, tooth brushes, and most oth-er small items. Install multiple towel racks on the back of the bathroom

door for additional towel storage. The space above the toilet can easily accommodate an overhead cabinet for larger items. Reversing the swing of the bathroom door from inward to outward will greatly increase the usable room and make the bathroom appear larger.

Dear Maintenance Men:My building is clad in aluminum sid-

ing and it is looking very dull. The siding has its original finish and I was wonder-ing if it can be painted? If so what is the procedure to insure a long lasting finish?

Joann

Dear Joann:Painting aluminum siding is not

a problem. Good prep work will be time well spent for a long lasting finish. The biggest issue with old aluminum siding is the chalking of the surface. To check for chalking, rub the siding with your hand and if your hand picks up any color, that is chalking. Paint will not stick to the chalk. Check at any home improve-ment center for aluminum siding cleaner or use TSP Cleaner and scrub the siding using a soap bucket and a brush. Don’t forget to remove any mold or mildew as well. An alterna-tive is to use a pressure washer to

clean the siding. The pressure wash-er is much faster, but be careful about water intrusion. Be sure to rinse the siding with clear water to remove any cleaning chemicals before paint-ing. We recommend using a good quality oil based primer if the siding is bare aluminum. (Acrylic primers may react with bare aluminum over time.) After priming or if the siding has been previously painted, top coat with an acrylic paint and only primer

the bald spots. Use a satin finish for best results.

Dear Maintenance Men: I hear the term “Aging in Place” and

wondered as an apartment owner, what I could do to market to this growing seg-ment of our population? What should I do to make my property more “Aging in Place” friendly?

Sanford

By Jerry L'Ecuyer & Frank AlvarezDear Maintenance Men:

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... continued on page 12



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The value of setting up ap-pointments from telephone inquiries has been clearly es-

tablished. Yet, it seems that the num-ber of callers being converted into visitors is not always producing a high percentage of rentals. A recent question submitted by a manager of a large apartment community may shed some light on this subject:

Q: I know it’s important to set ap-pointments from my phone contacts, but does it really matter who ends up giving a tour when the client ar-rives? I manage and lease out of a busy office and we all work together, but sometimes I wonder if we would

have a higher closing ratio if each of us helped our own clients. What do you think?

I think there is a lot to be said for the environment of “teamwork” that you have created. Those managers who work side by side with their leasing staffs, will keep them mo-tivated and excited about renting apartments. However, in working too closely as a team when it comes to leasing, some of the “personal-ized” service can be lost. If a prospec-tive renter is helped by someone else when they arrive for an appointment, it can give them the impression that their initial contact wasn’t genuinely

interested in helping them. Also, any “rapport” that was personally created by you, or another member of your staff over the phone, is lost if they have to “start from scratch” with someone else. - Not to mention the inconvenience to the client if they have to repeat their needs and prefer-ences all over again to someone else.

Many times it’s the personality, sales skills and knowledge of the em-ployee on the phone that “sells” the client on making an appointment in the first place. Once a relationship is established in the initial phone con-tact, the prospective renter is expect-ing to meet with the same person when they arrive at the community. It can be a real let down to learn that the employee they connected with from the phone contact is unavail-able. Worse yet, no one else in the of-fice even knew they were coming in.

For leasing consultants whose primary role is renting apartments, careful planning and scheduling can make it possible to keep most of the appointments they set. For manag-ers and other office staff who end up answering the phone, but who are not available to keep appointments, it might be best to resist answering the phone on the days you are un-

available. This will give your leas-ing staff the ultimate opportunity to sell and close the deal. Remember: Working as a team means some play-ers will spend time “on the bench” while other members of the team are out on the field. If you assemble your team before the day begins, then you can decide which employ-ees are best equipped and available to lease apartments that day. With your strongest players on the front line and everyone “passing the ball” (clients) to them, you will score more rentals every time!

If you have a question or concern that you would like to see addressed next month, please ASK THE SE-CRET SHOPPER by making contact via e-mail. Your questions, com-ments and suggestions are ALWAYS welcome!

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Our economy and your suc-cess in the property manage-ment industry is based on

knowledge. Gone are the days when you could graduate from high school or college and never again pick up a textbook or attend another class. Ready or not, your lifetime of learn-ing has already begun, no matter how reluctant or scared you might be. In addition, sophisticated tech-nology, business acquisitions, new products and significant regional or national competitors will continue to require your full attention. Ready to become a daily learner? Let’s get started!

Staying current with your profes-sion: Begin your learning journey by subscribing and reading the industry publications, E-newsletters, blogs and LinkedIn groups that serve the property management industry, such as your local apartment association magazine, UNITS Magazine, The Journal of Property Management and Multi-Housing News…just to name a few. These are great way-sfor keeping you in touch with local, state, regional and national trends. Next, consider investing the time and money to upgrade your profes-sional certifications as this says to your peers and colleagues that you are serious about your property

management career. In addition, re-search the one day seminars deliv-ered by Career Track {800-780-8476} or SkillPath {800-873-7545}, as their programs can advance your specific business skills in a short amount of time and with minimal investment. Lastly, search the Internet for indus-try websites such as MultifamilyBiz [ http://www.multifamilybiz.com ] that serve the property management industry and register for their E-mail newsletters, read their industry news or participate in one of their live and dynamic webcasts, to experience an engaging form of distance learning.

Tip From The Coach: Start each year by reserving the

property management seminars and trade show workshops you will be attending. Then, schedule your com-pany meetings and training that is planned and budgeted. Now, look at your calendar and reserve the time and dates you are going to sched-ule for the professional and person-al learning that will best serve you. More specifically, consider budget-ing $50-$150 per month for your con-tinued education. This small invest-ment today will pay large dividends in the near and distant future…The Coach says so!

Using technology:Technology has created many new time saving, cost-efficient ways to enhance our professional and per-sonal lives. But of course, you need to learn how to best maximize your technology tools to receive the high-est return on your learning invest-ment. Let’s start with the basics. Learn and master the software used by your property management com-pany. Learn the shortcuts for creat-ing professional looking correspon-dence, presentations or proposals. Understand the power techniques for using a spreadsheet or preparing your property budgets. Research so-cial media websites and related soft-ware as powerful marketing engines.

Tip From The Coach: Start with what you already know

about technology tools and take it one step further. Not 10 or 100 steps further…just one step at a time. If you push yourself too far or too fast, you might be in a situation where you will not have the resources to succeed. Instead, take one step at a time, master your new skill, then take another step. For many, hiring a private business trainer or coach, can rapidly accelerate your learning curve around technology. For others, just reading two or three pages of

their software user manual each day, is enough to gain incremental knowl-edge with technology tools.

Helping your team to learn: In ad-dition to your daily learning, it will be equally important that your prop-erty management team continues to grow and learn at a comfortable pace. Property management compa-nies around the world are finding a direct connection between learning and company performance. In fact, many companies are now measuring both performance goals and learning goals on an individual basis. These learning goals are focused on areas such as: resident satisfaction, in-creased asset performance, maximiz-ing technology and team-building skills.

Tip From The Coach: When helping your team with their learning skills, ask them to help you answer this question, “Learning __________ will help me __________ so that I can __________.” Asking this question is key, because the people that work for your property manage-ment company will be eager to learn if they have a hand in structuring their own industry and professional training. Remember, whenever you include your team in the planning of

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continued on page 12

Become a Daily Learner…Today! by Ernest F. Oriente, The Coach {Article #213…since 1995}



Maintenance Men ...continued from page 9 Daily Leader ...continued from page 11

PROFESSIONAL PUBLISHING, INC

April 25th from 12:00 pm to 3:00 pm at Ernesto’s Italian Restaurant 8544 SW Apple Way Portland, OR 97225

PAROA Monthly Membership Luncheons!

Medical Marijuana

As a landlord, are you confused about medical marijuana? What problems may you encounter and how can you reduce the risks? This workshop will cover all the questions you might have and the differences in federal and state laws on medical marijuana, including possible future changes.

April 29th – How to Handle the Eviction Process From posting the 72-hour notice to hiring the sheriff to remove the tenants. Lunch and Live Landlord Helpline Q&A Session will be from 11:30-12:00pm. Presentation/training from 12:00pm-1:00pm. Most trainings will qualify for 1 hour of CE credit towards real estate and property management licenses.Cost is $14.30 and includes a delicious Italian lunch buffet with non-alcoholic drink. Must be a member to attend.Contact Maren at: (503) 364-5468 or [email protected]

Held on the last Tuesday of every monthat Ernesto’s Italian Restaurant 8544 SW Apple Way • Portland, OR 97225

• 3 Real Estate Continuing Education Credit Hours available for this class!

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• Contact Maren at: (503) 364-5468 or [email protected]

With Speaker Violet Wilson

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Dear Sanford:Baby Boomers are 25 percent of

the population and the first of the Boomers turned 65 in 2011 and the last will turn 65 in 2029. We heard on the radio the other day that 85 is now the new 75 and so on down the line. That is a large healthy aging group! They are not going to go quietly into a nursing home which means as apartment owners & managers; we need to prepare for this group. Ag-ing in place means bigger showers with wider doors, taller toilets, grab bars and bath sinks that will accom-modate wheelchairs. This does not mean turning our units into institu-tions; there are many stylish accom-modations to fit a number of needs. For example a grab bar capable of supporting 250 pounds does not need to look like it came out of a hos-pital. Grab bars come in a variety col-ors and designs. Many will double as towel bars and be virtually invis-ible to their primary purpose unless needed. A larger shower stall also will look opulent and practical at the same time. Replace old two handle faucets in the kitchen and bathroom for single handle or touch faucets. Consider installing anti-skid floor-ing in the bathroom and tub/shower area. A few other items might be con-trasting color edging for the counter tops along with rounded edge and corners. Replace all door knobs with lever handles for ease of use. This is

a small sample of the things you can do to stay competitive in a growing market while not making changes that younger generations would ob-jectionable.

QUESTIONS? QUESTIONS? QUESTIONS?

We need more Maintenance Questions!!!

To see your maintenance question in the “Dear Maintenance Men:” column, please send submission to: [email protected] Please “Like”

us on Facebook.com/BuffaloMainte-nance

Bio:Please call: Buffalo Maintenance, Inc

for maintenance work or consultation. JLE Property Management, Inc for

management service or consultationFrankie Alvarez at 714 956-8371

Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA

Real Estate lic. #: 01460075Certified Renovation Company

Websites: www.BuffaloMaintenance.com & www.ContactJLE.com

www.Facebook.com/BuffaloMainte-nance

their future, you raise their motiva-tion to succeed and reduce turnover at the same time.

In closing, today’s success comes from yesterday’s learning, while to-morrow’s success comes from what we learn today. Want to hear more about this important topic or ask some additional questions? Send an E-mail to [email protected] and The Coach will E-mail you a free invitation to be on a PowerHour con-ference call.

Author’s note: Ernest F. Oriente, a business coach/trainer since 1995

[31,800 hours], serving property man-agement industry professional since

1988--the author of SmartMatch Alli-ances™, the founder of PowerHour® [ www.powerhour.com ], the founder of

PowerHour SEO [ www.powerhourseo.com ], the live weekly PowerHour

Leadership Academy [ www.power-hourleadershipacademy.com/pm ] and

Power Insurance & Risk Management Group [ www.pirmg.com ], has a pas-sion for coaching his clients on execu-tive leadership, hiring and motivating

property management SuperStars, traditional and Internet SEO/SEM

marketing, competitive sales strategies, and high leverage alliances for property

management teams and their leaders. He provides private and group coaching

for property management companies around North America, executive re-

cruiting, investment banking, national utility bill auditing, national real estate

and apartment building insurance, SEO/SEM web strategies, national

WiFi solutions [ www.powerhour.com/propertymanagement/nationalwifi.html

], powerful tools for hiring property management SuperStars and build-ing dynamic teams, employee policy

manuals [ www.powerhour.com/prop-ertymanagement/employeepolicymanu-

als.html ] and social media strategic solutions [ http://www.powerhour.

com/propertymanagement/socialme-dialeadership.html ]. Ernest worked for

Motorola, Primedia and is certified in the Xerox sales methodologies. Recent interviews and articles have appeared

more than 8000+ times in business and trade publications and in a wide variety

of leading magazines and newspapers, including Smart Money, Inc., Business

2.0, The New York Times, Fast Com-pany, The LA Times, Fortune, Business Week, Self Employed America and The

Financial Times. Since 1995, Ernest has written 225+ articles for the property

management industry and created 400+ property management forms, business and marketing checklists, sales letters

and presentation tools. To subscribe to his free property management newslet-

ter go to: www.powerhour.com. Pow-erHour® is based in Olympic-town…Park City, Utah, at 435-615-8486, by

E-mail [email protected] or visit their website: www.powerhour.com



• How often do my fire extinguishers have to be serviced? Annually. A trained and certified person who has undergone the instructions necessary to reliably perform maintenance and has the manufacturer’s service manual shall service the fire extinguishers not more than 1 year apart, as outlined in section 7.3.(7.1.2.1) of NFPA 10 2007 Edition.

• How much is it going to cost? There are several variables that determine pricing such as the extinguisher size, type (dry chemical, CO2, halotron) and internal inspection dates. On average, your fire extinguisher (all types) only needs an “annual service”. • How should payment be made? Payment is due at time of service unless a credit application has been filled out to open a charge account. The process for setting up a charge account takes 1-5 business days depending on the charge limit requested.

• How do I set up an appointment? Once the necessary information has been gathered and approved, a technician will contact you to set up a service appointment. On average you should be able to obtain service within 1 week unless special circumstances apply.

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FIRE EXTINGUISHER TRAININGClassroom Power Point Presentation: $125.00 - Session is at your facility, for as many participants as you would like to have involved. Class lasts approximately 30-45 minutes and covers: what to do in the event of a fire, types of combustibles, types of extinguishing agents, hazards involved with incipient stage fires and proper extinguisher use. Class will finish with a question and answer session. Hands-On: $150.00 (up to ten participants) $10/person for each additional participant - Our hands-on training is where it gets exciting! We bring the fire to you! The confidence gained by using an extinguisher on a real fire is invaluable. Knowing when to use an extinguisher is just as important as knowing when not to use one. This training will give your employees the confidence to make that important decision when it matters most. Classroom & Hands-On: Only $199.00!* - If you are serious about safety in your workplace and want to ensure that your employees will make wise decisions in an emergency situation, this training session is for you! Technical information from the classroom session is combined with practical hands-on training to create a well rounded, informative, and exciting class that won’t soon be forgotten. * Meets OSHA’s requirement for annual extinguisher training. * Classroom session includes as many participants as you would like. The hands-on portion includes up to ten people. A rate of $10/person will be charged for any additional hands-on participants.

COMMONLY ASKED QUESTIONS AND ANSWERS

By Portland Chimney & Masonry Inc.

The vents of dryers serve the same purpose as the chimney of a fireplace: a way for ex-

haust to be allowed to get out of the building.

Usually these vents are vented through the roof or out the side of your buildings. Either way, there must be a clear passage for the ex-haust to get out.

Structural: Under no circumstanc-es should these vents be allowed to vent anywhere inside the building, such as an attic or the like. This is simply allowing the exhaust and flammable lint to be vented into an enclosed, often unattended area. This is a fire waiting to happen.

Cleaning: The lint that is built up in these vents is highly flammable and must be cleaned out on a regu-lar basis, as should the chimneys for fireplaces. If this lint were to catch on

fire, it could cause severe damage to your property. Plus the more these vents clog, the more time is needed to dry the clothes in the dryers.

This can waste a great deal of money on electricity and is why these vents should be cleaned out on a regular basis. Also, extremely clogged vents are harder to clean and may require extensive measures to gain access to the clog, which can be quite costly. Multiunit dryer vent cleanings done regularly prevents these issues.

So protect your property, protect your tenants. Ensure your dryer vents are properly vented, inspect-ed & cleaned for maximum safety and efficiency. You can always call a Chimney Professional to inspect the dryer venting and to clean the vents when needed.

Dryer Vents: Structure and Cleaning of

By by Marc Courtenay

As 2014 begins a bureau cre-ated by the Dodd-Frank Wall Street Reform and Consum-

er Protection Act of 2010, The Con-sumer Financial Protection Bureau (CFPB), will set new rules concerning mortgages. Lenders will be required to verify and inspect borrowers’ fi-nancial records. The rules discour-age lenders from allowing borrowers to carry total debt payments totaling more than 43 percent of the person’s annual income.

That debt also includes existing debts like credit cards and student loans. Starting January 10th the CFPB will put into force a nation-al standard for issuing mortgages that could help prevent the housing crash of 2008 and 2009. Earlier in 2013 CFPB director Richard Cordray called the new rules “the true es-sence of ‘responsible lending.”

All kinds of consumer advocates and mortgage professionals are lauding the new CFPB requirements.

The new rules not only provide more responsibility for lenders, but it also protects them from lawsuits. “Lend-ers are going to be crossing their t’s and dotting their i’s like never before” said Bob Walters, the chief economist for Quicken Loans.

On the downside, there will be a big number of people who should have been able to qualify for mort-gages that won’t be able to and will be shut out of the home-buying mar-ket. If you add to that the fact that mortgage rates have risen in the past 6 month and are predicted to gradu-ally move up to the mid 5 percent range by the end of 2014, you can see that the mortgage market will be shrinking.

Others have commented that there’s a good chance that limits on the size of some popular mortgages will be lowered during 2014. CFPB director Corday noted that in the years leading up to the 2008 finan-cial crisis, consumers could easily obtain mortgages that they could not afford to repay. In contrast, in subse-

The Mortgage Market is about to

Get Smaller

continued on page 14

48-HOUR NOTICE OF ENTRYTENANT(S): ____________________________________________________ DATE:________ADDRESS: ____________________________________________________ UNIT: _________CITY: _________________________________________ STATE: __________ ZIP: _________48-HOUR NOTICE OF ENTRYPursuant to RCW 59.18.150, this is your 48 hour notice that your landlord or their agents will be

entering the dwelling unit and premises located at (Address)______________________________________________________________________________on between the hours of and . (Date) (Time) (Time)The entry will occur for the following purpose:______________________________________________________________________________

______________________________________________________________________________ Landlord Phone

Method of Service: Personal Service: Post and Mail: ** Add one additional day for compliance if served by post and mail.

WA-RTG-40 Washington

©2009 NO PORTION of this form may be reproduced without written permission.

CHECK-IN/CHECK-OUT CONDITION REPORTTENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNIT: ______________CITY: ___________________________________ STATE: ________ ZIP: _________________Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor IN Out In Out In OutLIVING AREAS KITCHEN BEDROOM 3Walls Walls Walls

Windows Stove/Racks WindowsBlinds/Drapes Refrigerator Blinds/DrapesRods Ice Trays RodsFloor Shelves/Drawer FloorCarpet/Vinyl/Wood Disposal Light FixturesLight Fixtures Dishwasher Doors/WoodworkDoors/Woodwork Counter Tops LocksLocks Cabinets CeilingsCeilings Sink Electric OutletsElectrical Outlets FloorGarbage Cans WindowsTV Antenna/Cable Blinds/Drapes BATH ROOMFireplace

Towel BarsCleanlinessSink & Vanity

ToiletBEDROOM 1 BEDROOM 2 Tub/ShowerWalls Walls Fan (Exhaust)Windows Windows FloorBlinds/Drapes Blinds/Drapes Electric OutletsRods Rods Light FixturesFloor FloorLight Fixtures Light Fixtures Essential ServicesEssential ServicesDoors/Woodwork Doors/Woodwork PlumbingLocks Locks HeatingCeilings Ceilings ElectricityElectrical Outlets Electric Outlets Hot Water

Smoke Detectors

OR-RTG-20 Oregon

PET AGREEMENTTENANT INFORMATION

TENANT(S): ____________________________________________________ DATE:________ADDRESS: ____________________________________________________ UNIT: _________CITY: _________________________________________ STATE: __________ ZIP: _________

DESCRIPTION OF PET(S)

1) Type _______________ Breed _______________ Size ______ Age __ Weight ___ Color ____ Name ________ Vaccinations: Yes____ No____ License Number: ______________



Additional Security Deposit Required:$

AGREEMENTTenant(s) certify that the above pet(s) are the only pet(s) on the premises. Tenant(s) understands that the additional pet(s) are not permitted unless the landlord gives tenant(s) written permission. Tenant(s) agree to keep the above-listed pets in the premises subject to the following terms and conditions:

1) The pet(s) shall be on a leash or otherwise under tenant’s control when it is outside the tenant’s dwelling unit. 2) Tenant(s) shall promptly pick up all pet waste from the premises promptly. 3) Tenant(s) are responsible for the conduct of their pet(s) at all times. 4) Tenant(s) are liable for all damages caused by their pet(s). 5) Tenant(s) shall pay the additional security deposit listed above and/or their rental agreement as a condition to keeping the pet(s) listed above. 6) Tenant(s) shall not allow their pets to cause any sort of disturbance or injury to the other tenants, guests, landlord or any other persons lawfully on the premises. 7) Tenant(s) shall immediately report to landlord any type of damage or injury caused by their pet. 8) This agreement is incorporated into and shall become part of the rental agreement exe -cuted between the parties. Failure by tenant to comply with any part of this agreement shall constitute a material breach of the rental agreement.

_____________________________ ______________________________Landlord Tenant ______________________________ Tenant

nogerO 42-GTR-RO

©2011 NO PORTION of this form may be reproduced without written permission.

CHECK-IN/CHECK-OUT CONDITION REPORTTENANT(S): __________________________________________________________________ADDRESS: ________________________________________________UNIT: ______________CITY: ___________________________________ STATE: ________ ZIP: _________________Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor

Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor







Rating Scale = (E)Excellent (VG) Very Good (G)Good (F)Fair (P)Poor IN Out In Out In OutLIVING AREAS

KITCHENBEDROOM 3

WallsWalls

WallsWindowsStove/Racks

WindowsBlinds/Drapes

RefrigeratorBlinds/Drapes

RodsIce Trays

RodsFloorShelves/Drawer

FloorCarpet/Vinyl/WoodDisposal

Light FixturesLight Fixtures

DishwasherDoors/Woodwork

Doors/WoodworkCounter Tops

LocksLocksCabinets

CeilingsCeilings

SinkElectric Outlets

Electrical OutletsFloor

Smoke DetectorsGarbage Cans

WindowsTV Antenna/CableBlinds/Drapes

BATH ROOMFireplace

Towel BarsCleanliness

Sink & Vanity

ToiletBEDROOM 1BEDROOM 2

Tub/ShowerWalls

WallsWindows

WA-RTG-20 Washington

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Winter is finally over—at least according to the cal-endar! We can surely be

thankful for our mild winter espe-cially when we hear and see what the rest of the country has experienced. Now that spring is here, it is time to consider the yards surrounding our properties and the exteriors of our buildings. Are the bushes out of control? Do tree branches hang over roofs? Are the beds overgrown? It is time to do a drive-by inspection and evaluate the status of your yards.

Stop and consider curb-appeal from the street. Do the building and yard look inviting? While you are at

it, recall the mild moist winter we have experienced. Moss and mil-dew have prospered and grown as well. Check out your driveways and sidewalks. Do they look black from moss? Are they slick? Remove the moss by pressure washing. By do-ing so, you increase the attraction of clean sidewalks, demonstrate that you are a landlord that cares, and eliminate any dangerous mossy sur-faces. If tree roots are lifting sections, make sure to minimize the possibil-ity that tenants and visitors might trip on the joints.

While you are conducting these inspections, check the condition of

your roofs and gutters. When was the last time you had the roofs and gutters cleaned? Now that spring rains have begun, make sure the downspouts drain easily. When was the last time your roof was inspect-ed? Is the time approaching when it needs to be replaced? If it’s 3-tab, are the edges beginning to curl? When you clean the gutters, do they have a lot of sand in the bottoms? These are indicators it might be time to replace the roof before big problems show up inside the building.

Washington State’s short legisla-tive session will be finished by the time you read this. We (the Wash-ington rental housing coalition) had successes and failures. None of the bills we supported made it through although a couple got farther than in previous years. We successfully op-posed all but one bill which had to do with sealing juvenile records. This law will make it more challenging to protect our tenant communities if ap-plicants had juvenile problems with the law.

Our April dinner meeting will

depart from tradition. We are chang-ing the date from Tuesday April 29 to Friday May 2nd. It will consist of two different topics. Blain Cowley will present a how-to repair work-shop and WAA will review what happened in Olympia this year.

Last month we mentioned our up-coming Landlord Training 101 that is scheduled for Saturday May 31st at Club Green Meadows. We are lining up topics of importance and knowl-edgeable speakers. We are targeting both new members and those that have been around a while. Mark the date on your calendar!

Yes, the time for spring cleanup has arrived. Many of us have ignored the outsides of our units during the winter. Now it’s time to check them out and clean them up. We want our current tenants to feel proud to live there, and we want to be attractive to new tenants. After all, this impacts our finances and our rental commu-nity.

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quent years banks tightened lending so much that few could qualify for a home loan.

The new rules seek out a middle ground by protecting consumers from bad loans while giving banks the legal assurances they need to in-crease lending, he said in a press con-ference at the start of 2013. The new rules will limit offers like teaser rates that adjust upwards and large “bal-loon payments” that must be made at the end of the loan period.

They include several exceptions aimed at ensuring a smooth phase-in and protecting access to credit for underserved groups. For example, the strict cap on how much debt con-sumers may take on will not apply immediately. Loans that meet sepa-rate federal standards also would be permitted for the first seven years.

Balloon payments would be al-lowed for certain small lenders that operate in rural or underserved com-munities, because other loans may not be available in those areas. The bureau also proposed amendments that would exempt from the rules some loans made by community banks, credit unions and nonprofit

lenders that work with low- and moderate-income consumers.

You can learn more about the de-tails that the CFPB’s website which is a great source of information on new laws that govern the use of credit and consumer rights. Property man-agers, here’s an idea for you. Why not send a link to this article to your owner-clients and your prospective client list as a “heads-up” for the year ahead.

As I often like to remind us, being a font of information and the latest insights can separate you from your peers, leading to more referrals and a bigger book of business. On sec-ond thought, if you send this article to your owner-clients and your pro-spective client list, maybe it would be more prudent to copy and paste sections and leave off the last 3 para-graphs.

from PropertyManager.com a Ser-vice of AppFolio

Storm Damage ...continued from page 13

Vis it us at www.RentalHousingJournal .com



their hard built real estate “nest egg” to their families. Unfortunately there are many challenges with this plan.

Most important is that one will need to find a family member who is mature enough, has an interest and wants to learn about the family’s ex-isting real estate investments. This typically proves very difficult to do.

Real estate investors tend to forget that they made many mistakes build-ing their portfolios. They expect the next generation to make the “right” decisions, just like they did. This is an unrealistic expectation. The next generation needs to be mentored and educated; patiently, over time. Deci-sions need to be discussed.

An investor might request their successor(s) to take real estate and/or finance classes to prepare them for their future decision making. They should be involved in the ba-sics: Property inspections, financial reviews, attorney meetings, refinanc-ing and purchasing decisions. Final-ly they should draft long and short term plans on paper to insure a re-cord of their plans.

Use this process as a road map for family leadership. Remember that over time one needs to relinquish control, if the transition is going to be successful. This does not mean re-linquishing control of your income, just planning and decision making. Yes, mistakes will be made. Consider relinquishing control a small step at a time so that your successor(s) can learn in a controlled environment.

At the same time, if there are nu-merous “stakeholders”, children, grandchildren, nieces and nephews, create a reporting relationship that is reasonable. Decide who is going to make the decisions. Create dispute resolution processes. Don’t let dis-agreements in the family ruin your investments.

Have a plan B in place in case your next generation manager gets ill and can no longer serve in his or her role.

Most important is that you, as the owner of the investments, under-stand the next generation’s needs. In every generation there is most likely one of the following:

• A thrifty spender

• A very conservative investor

• A very risk oriented investor

• A very sophisticated investor

• Someone that does not get along with the others

• Someone who needs cash to pay for the kids college

• Someone who needs cash to re-tire or make their house payment

• A child with a disability or a men-tal illness (a conservator needs to be appointed to protect their in-terest)

• Someone that has no interest in real estate at all and is willing to opt out of all decision making

• A son or daughter in law that have different ideas from the rest of the family.

One needs to plan ahead with your estate and real estate attorney to

build a Trust structure that addresses the needs of the next generation. Re-member also that at some point in time (with the exception of those of you that have property in Alaska) that these real estate trusts that you build, will not last into perpetuity.

Note: Whichever option you choose, have a designated person to manage your real estate in case you are hit by a car or suddenly become incapacitated.]

Sale to partners This is the easiest one to accom-

plish, if you planned ahead. In other words you added a buy sell agree-ment into your other partnership agreements. Of course this is depen-dent on how your partnership was formed.

If one has planned this in advance, you most likely crafted a partnership agreement or more likely formed an LLC. In that agreement you ad-dressed the terms of your partner-ship. If on the other hand you had been operating on love and trust

alone, now is the time to draft those agreements and spell out everything, including how to value the real estate assets once you exit. You will want to sit down with your CPA and attorney to review the tax implications of this decision and plan out if it is possible to defer or avoid some of the income taxes on the sale of your shares of the property.

Note: Minority partner discount (fractional interest): Sales or partner-ship interests are generally valued at Fair Market Value (FMV). The FMV of a third party arms-length trans-action may include a discount for owning a non-controlling minority interest. That is a matter between the buyer and seller. The IRS has accept-ed up to 30% value discounts in the valuation of fractional interests.

Transfers to trusts for estate plan-ning purposes may also be valued at a lesser amount – minority discount. The issue here is reduction of the gift/estate tax upon demise of the property owner. Contribute to Chari-table Organization You can always

donate all or part of your properties to a charity via a charitable remain-der trust (CRT). The advantage to doing this is that the size of the tax deduction is based on the then cur-rent market value of the property, not its cost basis. If structured properly, the CRT can pay you an annuity (in-come for the balance of your life, or for a specified term, and then distrib-utes what is left over to the charity.) As a tax exempt entity, the CRT can sell the real estate donated tax free and reinvest the proceeds in income producing assets (that are typically more liquid than real estate). You do have to pay income taxes on the distributions you receive, but each payment may include a combination of ordinary income, capital gain and tax free return of principal. The char-ity can also buy an annuity in your name from the proceeds of the sale of the real estate investment. Critical tax potholes you need to sidestep:

1. Substantiate the value with an appraisal as part of the donation pro-

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cess. Don’t just estimate a value; the IRS might disallow the donation. For properties over $500,000 you must at-tach an appraisal to your tax return.

2. If the charity sells the property within three years of the donation ( most do in the first year), and the property sells for less than the ap-praised value, the IRS will most like-ly challenge your deduction.

3. Donating properties that are free and clear is a cleaner process than donating one with a mortgage still in place. According to Attorney Peter Lennington of the Lennington Law firm PLLC, St Paul Minnesota, you might end up recognizing taxable income for some of the outstanding mortgage’s value.

4. Don’t prearrange the sale of the property before it is donated to the charity. If you do the IRS will disal-low the donation and you will have to pay capital gains taxes.

A simple summary on charitable real estate donations is available at: http://lennington.com/global_pic-tures/ Shouldyoudonaterealesta-tetocharity. pdf or go to the Oregon Community Foundation’s Website at http:// www.oregoncf.org/donors/give.

Giving real estate to a charity is not easy. Many charities are not geared to accepting real estate; they want cash or stocks etc. If they take real estate they have to figure out how to manage it and sell it, not al-

ways an easy task. Most charities prefer donations without a mortgage because of the complicated tax im-plications. It is not unusual to have a home donated to charity with a life estate attached also known as a “Gift of a Remainder Interest with a Life Estate”. This donation process takes time and has to be planned in advance. For more info see this link: http:// www.weikellaw.com/news-story/ should-i-donate-my-house-charitypart- 4-donating-your-house-andreserving- life-estate.

Repositioning your real estate portfolio One way to simplify your real estate portfolio is to reposition your assets. Assuming you have a multifamily portfolio, you might want to transition out of those as-sets and trade into quality triple net (NNN) investments, with longer term leases. There are tradeoffs in making this decision, primarily as the market changes you can typical-ly adjust your rents with multifam-ily tenancies. Commercial long-term leases don’t have the same flexibility and the rents with national AAA ten-ant leased properties, which typically only increase 10% over a five year pe-riod with adjustments coming at the lease anniversary mark. On the other hand they are triple net leases and the tenants are picking up almost all of the costs in taking care of their build-ings. Though it bears remembering

that critical to a successful invest-ment in a NNN property are a great location and a financially strong ten-ant. This may mean that you trade a higher yield for a lower yield but the benefit is a long term tenant and an easy monthly check with no mid-night calls for maintenance. Note: Single tenant investments exist with medical, retail, industrial and of-fice tenancies. It pays to do some re-search before you decide on a tenant and an industry group. Use of 1031 exchange to an invest in an UPREIT (Umbrella Partnership Real Estate In-vestment Trust) Basically to take ad-vantage of an UPREIT, you sell your property on the open market using a 1031 exchange and then using your 1031 proceeds you invest in a REIT. Then, by virtue of a 721 exchange, the assets are traded into shares of the REIT. It is possible to just trade your investment into a REIT, but that rarely happens because UPREITs want to be able to choose their own property focus.

It looks like this: The first step is selling the relin-

quished property and structuring a 1031 Exchange. However, instead of searching for suitable replacement property, the investor identifies and acquires a fractional interest (tenant-in-common interest) in real estate that the REIT has already designated. This completes the 1031 Exchange

portion of the transaction. The sec-ond step is to contribute the fraction-al interest into the operating partner-ship after a holding period of 12 to 24 months as part of a 721 Exchange (tax deferred contribution into a partnership). The investor receives an interest in the operating partner-ship (OP) in exchange for his or her contribution of the real estate and is now effectively part of the REIT.

http://www.exeter1031.com/ ar-ticle_upREIT_1031_721.aspx

Benefits of an UPREIT The ben-efits of an UPREIT are numerous, most importantly they deliver a tax deferral strategy to the holder of the real estate. In trade for your property, you receive a return on your invest-ment and someone else is managing it for you. The real estate investor just has to cash the quarterly check and does not have to pay capital gains on the sale of the real estate asset.

To summarize an UPREIT:

• Provides a viable tax deferral/ avoidance exit strategy to proper-ty owners facing significant capi-tal gain tax liabilities on the sale of appreciated property with a low tax basis.

• Allows diversification of real es-tate holdings (i.e., OP Unit Hold-ers have an interest in a portfolio of properties instead of just one).

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• Gives one potential to convert liquid‚ long-term assets (i.e.‚ real estate) into more saleable securi-ties (i.e., OP Units REIT Share Cash).

• Eliminates or reduces property management responsibilities or concerns.

• Provides quarterly income distri-butions.

• Provides potential to recognize unrealized gains as earnings.

• Can provide professional man-agement and expertise in capital markets.

• Avoids risk of negative cash flow.

• Establishes estate simplification.

• Allows the owner to dispose of property in a way that maximizes its value.

• Can improve cash position through potential leveraging of OP Units.

More information through this link: http://www.broadstone.com/realestate- services/upreit/ UPREITs can help you restructure your real es-tate assets and make it easier to give away or inherit after your death. If structured correctly, ownership in

UPREITS might not result in a tax-able event until the shares are sold; however when doing business with another company you must carefully

vet the strength of the company, its history and its future goals, as well as the experience of the officers run-ning the REIT.

Additionally, remember they are trying to make a buck as well. It is very important to understand all of the costs that are involved with in-vesting with an UPREIT and the ups and downs of the stock market as well.

Note: Fore more details regard-ing the definition of an UPREIT, see (http://www.exeter1031.com/ arti-cle_upREIT_1031_721.aspx) from the Exeter 1031 website

TIC investments:Tenant in common investments

were a common real estate invest-ment vehicle before the market downturn in 2008. Then the short term mortgages that many of them were financed with needed to be re-financed and financial institutions were loath to refinance, because va-cancy rates had increased and in-come had declined. Many investors lost significant assets due to the so called “TIC Meltdown”. All was not as advertised and the SEC decided that these were securities and needed to be sold by stock brokers with secu-rities licenses vs real estate agents.

On the other hand, out of this challenge a few companies in Utah, Rockwell and Realty Net Advisors, decided that they could mitigate in-

vestment risk by taking investors 1031 returns and place then into NNN investments where no loan was needed. In other words 100 % of the purchase price for a single tenant investment came from 1031 proceeds that investors placed in the pool. They also focused on very small in-vestments in the $1,000,000 range, possibly to avoid securities regula-tions. This means less risk for the investors, because the worst thing that could happen to the investors is the loss of the tenant, resulting in an empty building they have to re-tenant. They cannot lose the building to a financial institution since there is no loan in place. In addition, the TIC sponsors mitigate this risk, by only choosing high quality national ten-ants. They keep it simple. They col-lect the rent, charge a management fee, inspect the property and then send a check to the investor, {Note* There is no loan in this scenario so no mortgage to pay off, this helps with upside on the yield for the property.). Average returns are in the conserva-tive but steady 5-7% range. This also means though that you don’t have help from Uncle Sam in this kind of transaction i.e. an interest expense write off. Additionally, in this kind of a transaction don’t get the benefit of leverage which could increase your returns. The downside is that you are in a type of a partnership and when you want to exit from this structure,

you have to live by the TIC agree-ment. Basically in this structure, much like the UPREIT structure, you have ceded control of the investment to a third party. If the third party mis-manages your property/ies, you may lose all of the return from your invest-ment. For more on the downside risk see this link: Note: don’t forget that when you complete a 1031 exchange you also have to replace the debt, if any, you have in place in the replace-ment property. For more details fol-low these links: http:// www.securi-tieslawyersblog.com/2013 /10/30/tenants-common/ www.realtyne-tadvisors.com/ www.rockwelltic.com/ Hire a property/asset man-ager Many investors hate spending money to have their properties man-aged, but a good property manager is worth his/ her weight in gold. Life is simplified. You can travel, work and enjoy your family and not have to pay daily attention to your prop-erty, though you still need to be in-volved with your property. In pre-paring for retirement, you can have a property manager manage your assets for you and for the next gen-eration as well. Annual or semian-nual property inspections, reviewing financial reports and involvement in capital expense decisions are still on your required list of things to do. These are things that your spouse/life companion can also do, should


Continued on page 18



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you be unable to due to an illness or other incapacity. If you have signifi-cant assets, you might hire an expe-rienced real estate professional in the form of an asset manager who makes all of your decisions for you, from acquisition to disposition, from long range planning, to holding property managers accountable. They typi-cally are paid a fee for services. In some cases banks have trust depart-ments that also can manage prop-erties for you either with their own staff or through the use of property managers; they would perform this in an asset management role, much as they manage stocks and bonds for their clients. Conclusion So how do you best protect yourself when you are ready to retire from active real es-tate investing? Which one of the exit strategies do you use?

1. Selling your real estate invest-ments

2. Family succession planning

3. Selling to partners

4. Contributing to a charitable orga-nization

5. Repositioning your portfolio 6. Using a 1031 exchange to invest in an UPREIT (Umbrella Partner-ship Real Estate Investment Trust)

7. Tenant in Common Investments

8. Hiring a property manager

In the end your own personal situ-ation and personal preferences will dictate or influence your decisions. I always fall back on the thoughts of George S. Clason and his book published in 1926, The Richest Man in Babylon.* Some of his key points were as follows:

“Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling.

Gold slippeth away from the man who invests it in businesses or pur-poses with which he is not familiar or which are not approved by those skilled in its keep.

Gold flees the man who would force it to impossible earnings or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment.”

Bottom line is that you need to carefully investigate all of your in-vestment strategies. You should hire advisors you trust. Hire experienced CPA’s, Attorneys, and real estate advisors. Spend some of that hard earned money to protect the rest of the corpus. Seek out specialists in estate planning and real estate. I rec-ommend that you do not have your employment attorney tell you what to do. The real estate attorney, who is an expert at evictions, is the wrong

person. You need to talk to someone that understands all of the exit strate-gies. Interview and meet many peo-ple. If your gut tells you that you are over your head, trust your gut. You will find the answer that is right for you; it just may take some time! Plan ahead!

Don’t let the tail wag the dog, un-derstand all of the tax implications (estate tax and real estate capital gains taxes) first before you make a final decision.

*The Richest Man in Babylon - The Success Secrets of the Ancients, by George S. Clason. Publisher - Signet / First published in 1926

Clifford A. Hockley is President of Bluestone & Hockley Real Estate Ser-vices, greater Portland’s full service real estate brokerage and property management company. Founded in 1972, Bluestone & Hockley’s staff totals nearly 110 employees, includ-ing 20 licensed brokers. The compa-ny’s property management division serves commercial buildings, apart-ments, condominium associations and houses in the Portland/Van-couver metro area, while the broker-age division facilitates both leasing and sales of investment properties throughout Oregon and Washing-ton. Cliff earned a degree in Political Science from Claremont McKenna

College and holds an MBA from Wil-lamette University. He is a Certified Property Manager and has achieved his Certified Commercial Investment Member designation (CCIM). Blue-stone & Hockley Real Estate Services is an Accredited Management Orga-nization (AMO) by the Institute of Real Estate Management (IREM).

Cliff is a member of the Institute of Real Estate Management and was named Certified Property Manager of the year in 2001 and 2003. Cliff is a frequent contributor to industry newsletters.

Bluestone & Hockley offers cus-tomized brokerage, property and asset management, as well as main-tenance services to property owners and investors throughout the Port-land/Vancouver metro area. The company’s full-service approach benefits busy property owners and investors, who know they can count on Bluestone & Hockley for high quality real estate services start to finish.




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What’s New ?

Three MoreWays to Fill those VacanciesBy: by Marc CourtenayPropertyManager.com a Service of AppFolio

Here are three ideas from my upcoming article series titled “50 Ways to Fill Your

Vacancies”. Like you, I’m fired up about the idea of having as many marketing tools as possible to man-age properties effectively.

As a property owner and/or man-ager, you may already have many successful ways to quickly fill your vacancies with well-qualified new residents. My hope is that I can add a long list of intuitive and counter-in-tuitive suggestions that have worked and will keep on working.

So here are three more suggestions that can insure that the rental income stream keeps flowing to your clients and yourself.

1. Go to the restaurants you fre-quent the most. Ask the owner or manager to allow you to display a tastefully crafted “take one” box at the check-out counter or hostess ta-ble. Make sure it clearly displays the message that a gift certificate for that restaurant will be given to the indi-vidual who takes one of the special display cards and gives it to a pros-pect who becomes a resident.

A variation of this is to tell the restaurant owner, manager or host-ess that if someone rents one of your units, you’ll buy a gift certificate from the restaurant and give it to a new patron who has never been to their restaurant. It will generate a fresh batch of regular customer for the restaurant and a repetitive source of referrals to you. You’ll be amazed how many restaurants will love the idea as they’re always looking for new ways to increase their clientel.

2. It may seem old-fashioned in this age of digital, mobile media, but creating a full-page, colorful, glossy hand-out that lists all of the benefits, accoutrements, and features of your available rental still works. Make sure you show some photos of how

nice the vacant unit looks, and when you take the photo “stage it” with a few perky pieces of furniture or wall furnishings.

List any extra features like a new dishwasher or free Wi-Fi and provide information about the local area, bus routes, schools, laundry and conve-niently popular shopping venue. You’ll be providing a valuable ser-vice that few property managers take the time to offer. Let your prospects take your hand-out and tell them to call you if they have any questions. Ask for their contact info so you can follow up.

3. Ask your current residents, clients and “happy campers” for a glowing testimonial of what it’s like to be a resident in one of your well-

maintained and thoughtfully man-aged buildings. Let your prospects know ahead of time how much cur-rent and past residents appreciated your services. Ask for as many tes-timonials as possible, and use them to attract more owner-clients as well as prospective renters to fill your va-cancies.

There you have three more ideas on how to fill your vacancies as fast as possible. Keep in mind that if you haven’t tried these ideas lately, you can’t objectively know why they work or how they work.

These ideas derive from my prop-erty manager colleagues and my own experiences. Together we have many decades of management and marketing expertise and that’s why I literally have at least 50 of these tried and tested tools.

They’re based on the principles that if you’re willing to do what few property managers are willing to do, you’ll have the kind of success that few will enjoy and experience. Also, your clients and residents don’t re-ally care how much you know until they know how much you care. So get busy and show them!

metro rental housing journal april 2014

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