Metro (Portland) Rental Housing Journal July 2015 by Professional Publishing, Inc

Rental Housing Journal Metro 3. Why Invest in Real Estate?

July 2015

6. RHOA Presidents Message

9. Motivation and Attitude – Choose Your Path, Determine Your Destination

Successful Property Managers Guard Key Relationships

11. Are Businesses too Timid with their Growth Plans?

8. 9 Tips for Getting Started in Real Estate Investing

14. Section 8 Protection: Oregon Enters a New Era In Housing Opportunity

WWW.RENTALHOUSINGJOURNAL.COM • PROFESSIONAL PUBLISHING, INC

16. Ask the Secret Shopper 17. Why Real Estate Investors are Vital to the Housing Market 18. Dear Maintenance Men 19. Behind the Leasing Desk

PORTLAND/VANCOUVER

Published in association with: METRO Multifamily Housing Association; Rental Housing Association of Oregon; IREM & Clark County Rental Association

Five Real Estate Investing Fundamentals By : Jeff Watson, The Jeffery S. Watson Law Firm LTD, General Counsel National REIA

ne of my favorite movie moments is when Ernest Borgnine, portraying the legendary football coach Vince Lombardi, stood in front of the world champion Green Bay Packers at the beginning of training camp and held aloft an oblong object proclaiming, “Gentlemen, this is a football.” What Vince Lombardi taught the Green Bay Packers then applies to real estate investing today.

1. Master the basics. Practice them over and over again. Consistently do the fundamental things that make you a successful real estate investor. 2. Repeat your successes and keep repeating them. The vast majority of “investors” today suffer from what I call “squirrel or shiny-object syndrome.” They have a little success in one area, but then they are suddenly distracted by something else and go to another area, and then another, and then another. The bottom line is they lose their focus and intensity, and they don’t continue to practice the same thing over and over again. Let me remind you, slow and steady wins the race! 3. Establish your parameters. In addition to becoming good at the basics, I urge real estate investors to establish their investment parameters. • What kind of investments or deals continued on page 5 Professional Publishing, Inc., PO Box 6244 Beaverton, OR 97007

How Does the New Recreational Marijuana Law Affect Oregon Landlords?

s everyone in Oregon is aware, starting on July 1st, 2015 recreation marijuana use will be legal within the state of Oregon. Whether you are for or against the use of marijuana this is something that you will have to deal with as a landlord. They have established some of the rules surrounding the use of Marijuana as I will talk about in this article, but a lot is left up for determination by the OLCC. The big question on a lot of landlords mind is if they can restrict the use of marijuana on their property. This hasn’t been officially decided yet and may never become a part of law. As it stands right now it seems that most things will follow the same rules as alcohol. Since the use of drugs and alcohol, which are not prescribed by a doctor, are not a protected class then the initial opinion is ...continued on page 4

Apartment Security, What Can You Do? Property owners and managers can choose to implement a variety of strategies to improve property security.

By Cliff Hockley and Heather Hill, Bluestone & Hockley Real Estate Services

roperty security is an aspect of property management operations often overlooked and not budgeted for. Properties typically need security for: transient removal, trespassing, illegal dumping, vandalism, theft, alarm response, illegal camping, and criminal issues on site (like drug dealing for example).

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Screening Property owners assume that onsite managers are responsible for property security. Many years ago we took over management of a low end mobile home park which had many drug dealers onsite (something we did not know when we agreed to manage the property.) The

onsite manager and his wife were exceptionally large and had used their size to discourage obvious crime and keep the tenants in line. We were fortunate that the FBI and DEA arrested the worst tenants. In any case, once we took over management of the property, we were able to use improved tenant screening techniques to select better tenants and create a safer environment. More importantly, we were able to reposition the property (over a period of seven ...continued on page 12

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Why Invest in Real Estate? By Rebecca McLean, Executive Director of the National Real Estate Investors Association

eal estate investment is, and always has been, one of the best ways of investing available to individuals. Real estate investing works. Real estate investing is the surest and safest road to financial freedom. In a recent article in Fortune Magazine it states that 97 out of 100 self-made millionaires have made their money today through real estate investing. In the long term, historically, Real Estate has shown a consistent growth in value, even when some other investment choices were less stable. If there is an increase in value and you are paying down your mortgage

balance, it’s pretty simple: You increase your equity in the property and add to your net worth. The nice thing about investing in real estate is if you have purchased the property right – for the right price and under the correct deal structure - and maintained it properly, your residents, in effect, make your payments for you! In addition, there may be tax advantages available to you when you deal in a long term Real Estate Investment. Although there are definite limits to these potential tax advantages, they can be substantial. There are many other short term real estate strategies that have been incredibly successful over the last five years that have their own advantages. (Consult a tax or legal professional to see how your situation would be affected.) In gen-

eral real estate investing allows you to: • Become financially independent or at a minimum vastly supplement your current income • Use the power of leverage - create income even when you aren’t “on the job” • Take advantage of great tax benefits • Real estate investing works no matter what the condition of the market • Appreciation of your asset • Create a constant stream of income • Be your own boss continued on page 7

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RENTAL HOUSING JOURNAL METRO President - Christian Bryant, Vice President - Michael Ross, Secretary - Jill Maricich, Treasurer - Maren Winters Portland Area Rental Owners Association www.PortlandAreaROA.com Membership questions - 503-364-5468 Email inquiries - Info@PortlandAreaROA.com

Marijuana Law Affect Oregon Landlords? ...continued from page 1

that you can restrict the use of marijuana in your lease as long as the tenant knows about it and they sign the lease contract agreeing not to use marijuana while living on the property. Obviously even if you support the use of marijuana then you will still want to maintain the no-smoking rules you have for inside your unit as the smoke will do damage to your property just like cigarette smoke. There are many other ways for them to ingest THC though so you won’t be completely restricting their ability to use the substance. A lot of the rules that have been established do follow that of Alcohol. You must be at least 21 years of age to legally possess or consume marijuana, you cannot drive while under

the influence of marijuana, and you are not allowed to use it in public. Use in public spaces is something that managers of multi-unit properties with common areas will need to be cognizant of. If there are hall ways, playgrounds, or any other common areas of your complex then it is not legal for them to use marijuana in those areas. So if you have a tenant that decides to break this portion of the law you would have grounds to evict them assuming that you have an illegal activity addendum or section of the lease that they signed. Pretty much any area that is not inside their private unit or is in plain view of the public (balconies) would be considered using marijuana in public.

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People will be allowed to possess up to 8 ounces of usable marijuana inside their home and up to 1 ounce outside of their home. Usable marijuana is considered to be the dried flowers & leaves or finished product. Starting in July they will be able to share and give away recreational marijuana, but the OLCC won’t start accepting applications for wholesale or retail sales of Marijuana until January of 2016. So if you find out that any of your tenants are selling marijuana it will still be a violation of the law. In my opinion the main thing that landlords need to monitor is their ability to grow up to 4 plants per residence out of public view. Since they can’t grow them in public view then they will most likely be grown inside the unit. When marijuana is grown there typically has to be alterations made to the property for ventilation and electricity in addition to high risks of water, mold, and dirt damage to the surrounding area that it is being grown. So be sure that tenants know they have to get your permission before making any alterations to the property as this is a lease violation for the majority of leases. Also be sure to stay on top of your inspections as a landlord. Within my company we do them

once every 6 months, but work out a schedule that is best for you and be sure to do a thorough inspection. When it comes to grow rooms be sure to inspect any carpeting for mold growth. Look behind any reflective plastics or foil on the walls and ceilings for mold growth. And be sure to physically press on any sheetrock or wood surfaces to see if they have become soft from moisture damage. For more information as it comes up you can visit the OLCC website and this page that they set up specifically for the recreation marijuana law, http://whatslegaloregon.com Christian Bryant President Portland Area Rental Owners Association www.PortlandAreaROA.com Coldwell Banking Property Management www.CBPropertyManagement.com

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Five Fundamentals ...continued from page 1

• Determine what you are looking for in each of your potential investments. • How much capital per investment are you willing to put at risk? • How much time will you put into this investment? • What is the length of time you want your capital to be out working? • What is the projected rate of return you are seeking? • What is the minimum rate of return you want from your cash and/or time in each of your investments? When I say “rate of return,” I’m not just talking about an interest rate. • Do you want your investments to result in your receiving monthly income payments, either interest only or something else, so each investment is generating a monthly cash flow to you? These are just some of the parameters you need to establish for yourself. There is no one book, manual or class where you can learn all this information. No, it requires your spending some time working on what you think is best for you. That means you may have to do one of those activities in which investors should engage on a regular basis but often don’t – think and plan. As you think and plan, you will be able to clearly define your investment parameters in a way that you can clearly communicate with others who may want to do business with you.

4. Do your essential due diligence. Another key component of real estate investing involves your due diligence process. There are two very

crucial questions to be asked at the beginning: 1. Who is involved? 2. How are they involved? Allow me to explain why these questions are so important. It doesn’t matter how papered-up or how careful your lawyer is when drafting the agreements. If the person on the other side is a person of weak or poor character whom you know has a tendency not to honor their word, it will not be a good deal. You want to be in a situation where someone you know who has very high character and is a capable investor is involved in the transaction. You still need to know HOW they are involved. Are they going to be involved in a way that will make sure the deal goes well, or are they just on the periphery and their name is just being “borrowed” for marketing or window-dressing purposes? Once those key questions have been answered and you understand who is involved and how, and you have done some basic due diligence on them, then you are able to determine if you want to proceed with further due diligence on the deal or investment. Even though you may have a long, successful track record of doing multiple deals with individuals, it never hurts to check up on them again to see if things have been going well in other aspects of their lives. Allow me to share a brief story to illustrate this point. A client of mine indicated that he had made a series of large-dollar, hard-money loans to a rehabber who always got the properties finished in great condition, and they sold for top dollar. After doing several of these deals, he began to feel very comfortable with this borrower. Unbeknownst to him, this borrower was having marital problems. Once those problems grew to the point where domestic relations court and lawyers became involved, this individual’s rehabbing business fell apart, and one of my client’s loans was put in a great deal of jeopardy. Fortunately, things worked out and full payment was made, but it was late and

destroyed my client’s belief that this rehabber could be counted on to perform and pay on time. Make sure you develop the type of relationship with the individual with whom you are doing business that allows you to look them in the eye and ask them how they are doing and what else is going on in their life so you can pick up on what issues may be on the horizon that could affect the way you are doing business with them.

document. Has that ever happened to me? Embarrassingly, yes. I have taken steps, however, to prevent it from happening again in the future. That’s why I’m sharing this concept with you. Whatever the type of document, whether promissory note, mortgage, deed of trust, option agreement, due diligence checklist, or borrower questionnaire and loan application, have them saved in a baseline format that you can quickly modify it for the particular deal on which you are working. This will allow you to be much more organized as you prepare these documents on your own to be sent to your lawyer or other licensed professional for review and then used in the transaction. Remember, it’s all about getting good at the basics. Make sure you master the basics of real estate investing, establish your parameters, do thorough due diligence regarding those with whom you are working, and work from the same, consistent set of documents so you can continue VALLEY, METRO, to repeat your successes.ARIZONA

5. Organize your deal paperwork. There is one last fundamental principle that investors need to understand that I want to share with you. You need to organize your paperwork. You need to have all your baseline transactional documents saved in Word format so you can easily do your own word processing and create nearlycompleted drafts of your documents to be reviewed by the appropriate outside professionals and other parties to the transaction (yes, get a professional review each time). By always working from a baseline document, you have a template in place so you aren’t reinventing the wheel every time. You are also able to maintain a greater degree of privacy and Feb, Apr,done Jun, security over what you’ve withAug, other deals. I often see individuals who grab the last document they used (last lease, last trust agreement, last operating agreement, etc.), and they begin making edits to that one for the next deal, not realizing that there may be holdovers, both digitally and facially, in that

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RENTAL HOUSING JOURNAL METRO President: John Sage • President Elect: Ron Garcia • Past President: Elizabeth Carpenter Secretary: Lynne Whitney • Treasurer: Elaine Elsea • Office Manager: Cari Pierce

John Sage RHAOregon President

10520 NE Weidler Portland, OR 97220 (503) 254-4723 • fax (503) 254-4821 info@rhaoregon.org • www.rhaoregon.org.

President’s Message: "The First Step and Then The Next"

he last couple of months have been exciting for RHA Oregon. We have been working on several new projects as your board. Myself, I enjoy the excitement and innovative ideas that are brought up and discussed at the board meetings and also the many ideas that members discuss with us at our monthly dinner meetings. There is nothing like a good suggestion to get the juices flowing. Then the ideas start flying and the fun begins. How does the idea fit in with the mission statement of the organization? Do we have the resources to make this happen? And so on, it goes until we have a plan and a clear vision of what we are going to do. It is not always easy and sometimes that plan evolves as we progress. However, I always remember a proverb I heard many years ago that “A journey of a thousand miles begins with a single step.” I remem-

ber my first steps into the world of owning rental property. It can be very intimidating with all of the laws, forms and questions that you haven’t experienced before. So after taking the first step and then the next and the next and so on I found RHA Oregon and the answers to many of my concerns and questions and many answers that I never even knew I had questions about. As you know our vendors are a very important part or RHA Oregon. Many of the events and training that we do would not be possible without their support. We encourage you to invite and bring a vendor or other landlord that would benefit from learning about RHA Oregon. While at the events you can get to know other property owners and find out what they know that you didn’t even know you had questions about. So what, you might ask, do we

have in the works? Well, on July 15th starting at 6pm at the RHA Oregon conference annex, 10520 NE Weidler Portland, OR. We are having our annual event “Under a Starry Night”. This event is again an opportunity to meet and talk with other vendors and property owners. But the main focus of the event is an auction to support JOIN. At last year’s event we raised enough to get a family off the streets and into housing. I recently receive a picture of the family that we were able to help last year and the smiles on their faces made all the effort that went into this event very worthwhile. We also continue to serve lunch once a month at JOIN. If you are interested in volunteering to help serve or cook this meal you can contact the office to find out more information. As always since long before I became a member of RHA Oregon,

we have our Picnic on August 12th starting at 2 pm at Oaks Park. There will be a BBQ, games, and rides for the kids, plus another opportunity to meet other property owners and vendors. Be sure to bring a prize for the bingo games later in the day. It always amazes me to see the generosity of our members and the prizes that they bring. So be sure to contact the office to register for the upcoming events and invite your favorite vendor or other property owners. Show them the great organization that is RHA Oregon. I look forward to seeing all of you there and getting to know you better. Sincerely, John Sage President RHA Oregon Stegmann Insurance Agency Inc.

Successful Property Managers Guard Key Relationships By Marc Courtenay

ften in life, it’s not only what you know but who you know that can make all the difference. Knowledge is powerful, but relationships are the bedrock of the property management business. It all begins with the people we work with, the folks we depend upon, and the personnel that help keep the wheels of progress turning. Are you staying connected, in touch with your V.I.P.s? Group meetings can be useful in this regard. But there’s nothing like one-on-one time with your key people to really get the feel about what they’re thinking

and what ideas they may be willing to share. One of my clients has lunch each month with a rotating selection of the people she relies on the most. She’s a big advocate for having a “garden filled with allies” and she keeps that “garden” nourished well. Next, if I were to ask you for a list of your most important clients, would you have it memorized? If you think about it, 80% of your business as a property manager usually comes from 20% of your clients. The 20% are your key relationships that you can’t afford to neglect. When was the last time you had coffee or breakfast with these sources of ongo-

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ing business? Do you communicate with them regularly? The other 80% of your book of clients are important, too. Make sure you have an outstanding client management system (CMS) that won’t let you forget them. A good CMS keeps people from falling through the cracks, which might make them easy pickings for your competition. Loyalty must be earned and then maintained through caring contact. As you climb the ladder of success you’re likely to slip from time to time. If you have others on that same ladder with whom you’re loyally connected you’ll keep from falling too far. The few mountain-climbing experiences I’ve had taught me to be tethered to my group. Once, years before the eruption of Mt. St. Helens, I ascended its icy surface all the way to the summit. Several times I, or another member of the climbing party, slipped in spite of our quality equipment. Because we were tied together by strong ropes none of us were lost down a deadly crevasse. This experience emphasized the importance of “staying connected” to the dependable, competent people I relied on and who relied on me. It also reminds me today of a motto that I learned: “Do what you can to leave people a little better than you found them.” Even if all you do is send emails

or a text with a few appreciative words, do it. The late Maya Angelou had some powerful things to say on this topic. One of her most memorable quotes was “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” If the key people in your lives, including family and friends, feel appreciated, understood and respected they are much more likely to respond in kind. PropertyManager.com a Service of AppFolio

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Why Invest ...continued from page 3 • Work on your own schedule Best of all, real estate investing works no matter what the condition of the market. Your strategy might change or need to be tweaked but the underlying principles are the same. In the short term, Real Estate makes a great investment simply because the numbers are so large. It is not like buying a $200 collectible and reselling it for $250. Yes, the return percentage will be high, but you still only made $50. With Real Estate, a decent rate of return can mean big profit dollars. If you buy a house at $25,000, put $5,000 into repairs and upgrades and add some sweat equity, you can often sell that same house for $40,000! That’s a much larger dollar return on your investment. One of the golden benefits of real estate investing is the opportunity to avoid the onerous taxes. Every time you exempt yourself from a tax it is like earning an extra percentage on your investment. That alone can have a powerful effect on your wealth building, but it doesn’t stop there. You have more profit to roll into another property, so you keep every one of your investment dollars compounding and building your

financial net worth. Real estate investing has become attractive to everyone in the last decade. Average individuals, not just high income earners looking for supplemental retirement income or those looking for freedom from corporate America. In 2005, investors accounted for nearly 10% of the new mortgage loans- up from 6% in 2001. And that number does not even account for investments using creative financing, a term real estate investors use to mean investing via creative strategies for acquisition. The number of conventional loans was significantly reduced after 2009 and then investors began to use cash and private money to participate in the market. Bankrate.com, in its April 22, 2005 article, said that it estimates that nearly a quarter of home buyers were purchasing property as an investment. After the overall market cooled that number remained high as only investors with access to alternative funding could freely participate in the market. Many areas that recovered more quickly were only able to do so because of investor participation. During some months in 2010 and 2011 NAR reported that over 30% of the purchases were by investors. Those who chose real estate as a

career have much more flexibility than in the past. You can even be a real estate investor and never have tenants! Many strategies such as wholesaling and private money don’t have tenants or physical labor. There is one thing about real estate investing that has remained unchanged through the years – the smart investor is making his money (or time, or talents, etc.) work harder so he doesn’t have to. The biggest plus to becoming a real estate investor is your ability to invest on your terms: • Seller financing that means little upfront investment vs all cash deals • Working from home vs using an office and staff • Normal office hours appointment only

• Gaining education from books, informal meetings, or in exotic places on a cruise It all depends on your style of investing and the lifestyle you are pursuing. That is what makes real estate investing the perfect business for everyone. You can build your business on your own terms.

It’s been several months since Oregon fair housing law1 was amended to protect housing consumers from discrimination based on Section 8 voucher or other rental assistance income (House Bill 2639 and statute at ORS 659A.421). Source of income has long been protected in Oregon. However, when the state legislation was passed, Section 8 vouchers were specifically lobbied out as an exception. With this exception removed, effective July 1st, 1014, all legally obtained sources of income are protected across the state. Full article on Page 14 Visit http://www. fhco.org/news/readon?view=category&id=85 to learn about FHCO’s efforts in this area, common violations, and valuable resource information for anyone involved with residential rentals in Oregon. This article brought to you by the Fair Housing Council; a civil rights organization. All rights reserved © 2015. Write jbecker@ FHCO.org to reprint articles or inquire about ongoing content for your own publication. Rental Housing Journal Metro • July 2015

For more information on how to get started in Real Estate, I can recommend no better resource than your local Real Estate Investors Association. These associations feature great benefits such as discounts from product and service providers, special programs for everyone from beginners to advanced investors, and unbeatable networking opportunities. Your local REIA group can be an invaluable partner on your road to financial independence! For information about REIA Chapters and affiliates around the country, visit www.nationalreia.com.

To learn more… Learn more about fair housing and / or sign up for our free, periodic newsletter at www.FHCO.org. Qs about this article? ‘Interested in articles for your company or trade association? Contact Jo Becker at jbecker@FHCO.org or 800/424-3247 Ext. 150 Want to schedule an in-office fair housing training program or speaker for corporate or association functions? Visit www. FHCO.org/learning-resources/ trainings to learn about the trainings we offer for companies and groups. Federally protected classes under the Fair Housing Act include: race, color, national origin, religion, sex, familial status (children), and disability. Oregon law also protects marital status, source of income, sexual orientation, and domestic violence survivors. Additional protected classes have been added in particular geographic areas; visit FHCO.org/mission.htm and read the section entitled “View Local Protected Classes” for more information.

RENTAL HOUSING JOURNAL METRO

9 Tips for Getting Started in Real Estate Investing By JC Crown Properties

1. Treat This As A Business One of the biggest mistakes I see new investors make is to treat real estate investing as a hobby instead of a profession. If you’re counting on real estate investing to provide income now and retirement income later you must treat it like a business. Real estate investing is now your profession. Treat it like one. By that I mean you have to advertise, devote time to it, show up for appointments on time, act professionally, do your paperwork properly and treat your clients professionally. Most real estate investing isn’t passive. Unless you are a private lender most investing takes real work. Even a landlord using a property manager has work at the outset and should continue to remain active in oversight. This is not a get-rich-quick scheme. It takes time to build client lists, credibility, partnerships and associations. A well-grounded business is built over time unlike “overnight sensations.” It will take you 3 to 5 years to become a real success in

majorly effect their profits, put themselves in a position of huge liability, or miss out on time and money saving tips because they just didn’t take time to stay informed. In the real estate business, like everywhere else, knowledge is power and for investors it’s profit too.

Underwood,

this field.

2. Learn About The Business and Stay Informed “If you think education is expensive, try ignorance.” Derek Bok You can lose more money with a mistake than you can learning how to avoid one. Even if you have been at this business for years, you need

to keep up with current trends and laws. You never get to the point where you know it all or even know “enough”. Some investors honestly believe that there is nothing else that they really need to know to be successful, then a law changes, the market turns, or a new strategy begins to be used. They either miss changes coming in their community that will

3. There Are Many Profitable Strategies In Real Estate Most new investors get into real estate investing after hearing about one specific strategy. They have a friend or family member that has participated in real estate, they saw a TV show or infomercial or they went to their first REIA meeting and heard a charismatic speaker that made them want to pursue a specific investing strategy. They begin to invest using that strategy because they are drawn to the certainty and proven success of the individual that is in front of them. After the new investor has any success with one strategy they often develop the idea that other strategies are less profitable, more difficult to execute, and generally inferior to the one they are using. Suddenly they develop a cercontinued on page 15

Rental Housing Journal Metro • July 2015

RENTAL HOUSING JOURNAL METRO 16083 SW Upper Boones Ferry Road, Suite 105, Tigard, OR 97224 503-213-1281, 503-213-1288 Fax www.multifamilynw.org

Scott Arena President, Multifamily Northwest

Motivation and Attitude – Choose Your Path, Determine Your Destination

everal years ago and early in my management career I was fortunate to come across these axioms surrounding the power of attitude and the driving force it ultimately creates: motivation. Time tested by many –including a few of my most valued mentors -it eventually became quite apparent that these the components creating the foundation of this motivation-framework truly help determine success or failure in all areas of personal and professional development. If experiencing life to its fullest is the goal one pursues, one must stay motivated. People who fail to keep themselves motivated on a consistent basis are setting the stage for self-doubt, fear, and stress. It has been said that keeping motivated is much like eating. If we keep ourselves fed with balanced healthy meals each day, our bodies remain strong and our minds stay sharp.

However, if we go too long without food, or eat things that are unhealthy for us, we will grow lethargic and become weak. The same goes for motivation. If we surround ourselves with inspiring ideas and uplifting people, we continually increase our levels of performance. If we do not, we become stagnant and ineffective. Worse, we become vulnerable and subject to the negative tendencies of our nature. Make the commitment to spend time each day with positive information and positive people. Stay positive. Stay focused. Stay strong. Living a day without goals is like climbing aboard an airplane without knowing its final destination. Once in the air, we know we’re moving forward but we have no idea how far we’ll be going, the duration of the trip, or where we will eventually wind up. Of course, we could just sit back, go along for the ride, and just wait for whatever blind luck decides to send our way. But like the imaginary plane ride, just simply waiting

for luck in life involves a high degree of uncertainty. If you don’t know where you’re going you’ll end up where you’re headed. By setting specific goals we minimize that uncertainty and increase the probability of achieving the things we desire most. And we can more easily adapt to change, in a sense the only constant we can depend on. Start planning. Start writing out your goals today. No matter what you do, for as long as you live, your life will change. You can either be a victim of that change or a master of it. You and you alone make that determination. Beware the winds of negativity. People not doing anything with their lives will try to discourage you from doing anything with yours. Misery loves company. So does lack of ambition and a bucket of excuses. Take a stand against the naysayers of the world. Refuse to accept mediocrity. Shine in the spotlight. Even if you fail in the pursuit of something you thought at first would be successful, do not quit. Remember the credit goes to the individual who is constantly trying and in the game,

not sitting on the sidelines and never taking chances. Always give more than it takes. Greatness has never been achieved merely by meeting the minimum requirements. Exceptional effort is the surest way to achieve exceptional rewards. Make it your personal challenge to do a little more than what is expected in everything you do. Start today. Not only will the fruits of your labor increase, but also you will steadily acquire the habit of “going the extra mile”. This will put you in a circle of rare individuals -and a place where you’ll never find a crowd. Positive energy attracts and produces positive results. Negative energy attracts and produces negative results. When we smile and reach out to the world, the propensity is that it will reach back in like kind. When we frown and pull away, the world almost always does the same. Each day we have an important choice to make: We can either enter the day projecting posi...continued on page 10

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Form of the Month

Rental Housing Journal Metro • July 2015

OREGON SINGLE FAMILY / CONDO / MULTIPLEX

MOVE-IN & OUT INSPECTION DATE __________________________________________ PROPERTY NAME / NUMBER ___________________________________________________________________________________________________________________________________________________________________ RESIDENT NAME(S) ___________________________________________________________________________

___________________________________________________________________________

UNIT NUMBER ___________________________________ STREET ADDRESS ___________________________________________________________________________________________________________________________________________________________________________ CITY ___________________________________________________________________________________________________________________________________________________ STATE ___________________________________ ZIP _____________________________________________________________ # OF BEDROOMS ___________________________________ # OF BATHROOMS ___________________________________ Circle one item on each line. LIVING ROOM / ENTRY

A = Acceptable IN

1. WALLS / CEILINGS

2. FLOORING________________________________

3. DOORS / KNOBS / LOCKS

4. SLIDING DOOR

5. WINDOWS / SCREENS / COVERINGS

6. LIGHT FIXTURES / BULBS

7. ELECTRIC OUTLETS / SWITCHES

8. FIREPLACE

9. OTHER_____________________________________

KITCHEN / DINING ROOM

* * * * * * * * *

10. WALLS / CEILINGS

11. FLOORING________________________________

12. SLIDING DOOR

13. WINDOWS / SCREENS / COVERINGS

14. LIGHT FIXTURES / BULBS

15. ELECTRIC OUTLETS / SWITCHES

16. CABINETS

17. COUNTERTOPS

18. SINK / FAUCET / DISPOSAL

19. RANGE / STOVE

* * * * * * * * * *

* = Issue noted on page 3

OUT

MASTER BEDROOM

* * * * * * * * *

25. WALLS / CEILINGS

26. FLOORING________________________________

27. DOORS / KNOBS / LOCKS

28. WINDOWS / SCREENS / COVERINGS

29. LIGHT FIXTURES / BULBS

30. ELECTRIC OUTLETS / SWITCHES

31. SINK / VANITY

32. OTHER_____________________________________

BEDROOM 2 33. WALLS / CEILINGS

* * * * * * * * * *

34. FLOORING________________________________

35. DOORS / KNOBS / LOCKS

36. WINDOWS / SCREENS / COVERINGS

37. LIGHT FIXTURES / BULBS

38. ELECTRIC OUTLETS / SWITCHES

39. OTHER_____________________________________

BEDROOM 3

40. WALLS / CEILINGS

41. FLOORING________________________________

42. DOORS / KNOBS / LOCKS

MODEL_____________________________________

43. WINDOWS / SCREENS / COVERINGS

COLOR_____________________________________

44. LIGHT FIXTURES / BULBS

45. ELECTRIC OUTLETS / SWITCHES

46. OTHER_____________________________________

20. HOOD / FAN

21. REFRIGERATOR

MAKE_______________________________________

* *

NA NA

BEDROOM 4

COLOR_____________________________________

47. WALLS / CEILINGS

48. FLOORING________________________________

49. DOORS / KNOBS / LOCKS

MAKE_______________________________________

50. WINDOWS / SCREENS / COVERINGS

COLOR_____________________________________

51. LIGHT FIXTURES / BULBS

52. ELECTRIC OUTLETS / SWITCHES

53. OTHER_____________________________________

MAKE_______________________________________

MODEL_____________________________________ COLOR_____________________________________ 24. OTHER_____________________________________

* * * * * * *

MODEL_____________________________________

23. MICROWAVE

MODEL_____________________________________

22. DISHWASHER

OUT

MAKE_______________________________________

NA = Not applicable

* * * * * * * *

* * * * * * *

OUT

BEDROOM 5

* * * * * * * *

54. WALLS / CEILINGS

55. FLOORING________________________________

56. DOORS / KNOBS / LOCKS

57. WINDOWS / SCREENS / COVERINGS

58. LIGHT FIXTURES / BULBS

59. ELECTRIC OUTLETS / SWITCHES

60. OTHER_____________________________________

MASTER BATHROOM

RESIDENT

61. WALLS / CEILINGS

* * * * * * *

62. FLOORING________________________________

63. DOORS / KNOBS / LOCKS

64. WINDOWS / SCREENS / COVERINGS

65. LIGHT FIXTURES / BULBS

66. ELECTRIC OUTLETS / SWITCHES

67. COUNTERTOPS

68. SINK / FAUCET / VANITY / MIRROR

69. TOILET

OUT

70. SHOWER / TUB / SURROUND

* * * * * * *

71. TOWEL BARS / SHOWER ROD

72. FAN

73. OTHER________________________________

NA NA

BATHROOM 2

74. WALLS / CEILINGS

75. FLOORING________________________________

* * * * * * * * * * * * *

76. DOORS / KNOBS / LOCKS

77. WINDOWS / SCREENS / COVERINGS

* * * * * * *

78. LIGHT FIXTURES / BULBS

79. ELECTRIC OUTLETS / SWITCHES

80. COUNTERTOPS

81. SINK / FAUCET / VANITY / MIRROR

82. TOILET

83. SHOWER / TUB / SURROUND

84. TOWEL BARS / SHOWER ROD

85. FAN

86. OTHER________________________________

* * * * * * * * * * * * *

* * * * * * *

NA NA NA NA NA NA NA

OUT NA

OUT

MAIN OFFICE (IF REQUIRED)

OUT NA

OUT

ON SITE

* * * * * * *

* * * * * * * * * * * * *

NA NA NA NA NA NA NA NA NA NA NA NA NA

OUT NA

* * * * * * * * * * * * *

NA NA NA

Oregon Single Family/ Condo/Multiplex Move-In & Out Inspection – M207 OR Multifamily NW has expanded their standard Move-In & Out Inspection form for single family homes and more unique rentals. This critical form that provides the written record of the condition at the beginning and end of the tenancy, has been updated to include up to 5 bedrooms, 3 bathrooms, and many more prompts to note additional rooms, essential services and exterior areas.

NA NA NA NA NA NA NA NA NA NA

PAGE 1 OF 3

ON MOVE-OUT, FORWARD TO HOUSING AUTHORITY IF A HOUSING CHOICE VOUCHER PROGRAM

RENTAL HOUSING JOURNAL METRO

Motivation and Attitude ...continued from page 9 tive energy, or we can enter the day projecting negative energy. Projecting negative energy is easy. There are always plenty of reasons to be mad, sad, or afraid. Projecting positive energy is more challenging and tougher. It means consciously going against the grain of the world in which we live. Remind yourself each day that being positive, no matter what the circumstances, builds perseverance. Perseverance builds character. Character builds hope. Hope is what keeps our dreams

alive. The responsibility of making our way in life is ours and ours alone. Each of us is at a point in our lives as the result of all the decisions we have made to this point. When we study great leaders throughout world history, in the final analysis we see a common thread throughout their character: The courage to take responsibility for their actions. People of sound mind and body who shirk responsibility for the things they do exert enormous burdens on

society. They make excuses. They shift the blame. By doing so, they actually demonstrate a disrespect for the freedoms and opportunities that have been protected and made available to us all. If we are to achieve meaningful success in our lives – be it financial, profession, in relationships, or otherwise – we must recognize our obligation to accept full responsibility for our actions. When we do, those same threads of great character will show forth in us as well!

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RENTAL HOUSING JOURNAL METRO

Are Businesses too Timid with their Growth Plans?

Corporate Development Expert Says CEOs & Entrepreneurs Shouldn’t Sell Their Vision Short

ariety in business is generally good, but when it comes to profit and revenue, an entrepreneur’s expectations should be fairly singular – go big. That’s according to business development expert Cameron Herold, who drove 1-800-GOT-JUNK’s growth from $2 million to $106 million in a handful of years. Otherwise, he says, you’re probably selling yourself short. “If you’re a CEO or entrepreneur and you do not plan on doubling your profit and revenue within the next three years, you may be lacking focus,” says Herold, author of “Double Double” (www.DoubleDoubleBook.com). “It’s within your grasp to increase your business drastically within a few years, but you need to make several smaller goals in order to do so. It all starts with a vivid vision.” Herold discusses how to cultivate that vision. • Get out of your office. A vision needs perspective, and if you’re waiting for inspiration to strike at your desk or the boardroom conference table, you’re bound to get dragged into the daily routine. You need to allow your mind to drift into the

future, but at the office you will get pulled back into specific constraints. Go somewhere that allows you to forget metrics, daily tasks and obligations. Great locations to set your mind free include the ocean, a forest or a place in the mountains. Or, simply lie down in a hammock in your

backyard and start sketching ideas. • Turn off your computer. Computers are notorious for sucking you into the vortex of daily emails and tasks. Instead, put pen to paper. There’s magic in just writing it all out by hand first. “I got a sketchpad with unlined

paper,” Herold says. “Initially, I had trouble thinking abstractly because I’m so left-brained. I turned my sketchpad sideways, ‘landscape mode,’ and ideas for how my company would look in three years began coming to me.” ...continued on page 17

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Apartment Security ...continued from page 1 years) to enable the ownership group to sell the property for a profit.

Lighting and Landscaping Issues Crime rarely takes place in open areas under spotlights. Make sure Community Building Community organizing is an im- the property has adequate lighting portant tool for crime prevention. and that all lamps work at night, Onsite managers can work with especially in the parking areas to neighborhood police officers to fos- discourage car theft or break-ins. ter positive relationships with law To save energy, motion sensors can enforcement at the property. Events be installed that illuminate a space such as the National Night Out draw only when a large moving object is attention to police partnerships that present. This has a dual benefit of can get communities aware of their scaring away trespassers and relievrole in making neighborhoods safer. ing tenants who might find constant This is not an easy task. It will take a lights too bright in their windows at lot of work to get community mem- night. Overgrown landscaping can probers involved. A good onsite manager who understands the benefits vide easy cover for criminals. Make of community building will put the sure that bushes or trees don’t obextra effort into this and help ten- scure property windows, entries, ants get to know each other, through and/or lighting systems. When monthly parties, events and newslet- planting bushes near access points like windows, choose thorny yet orters.

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namental bushes such as holly, hawthorn, or roses as these are more difficult to climb over. These plants can also serve as a natural fence. If the property has a problem with passthrough traffic, for example, corner properties or those adjacent to a retail area where pedestrians might choose to cut through the property to shorten the walk to another street, you can plant thorny bushes to discourage this practice. Criminals find properties with only one in and out point of access less desirable than those with multiple escape routes. These steps require the cooperation of the owners, the managers and the landscape team. Cameras As the cost of technology has plummeted, it has become easier to install security cameras and DVRs to track the data. Many commercial and some residential buildings have cameras to observe access and help security personnel and property managers track activity at their properties twenty-four hours a day on their smart phones. At one of our commercial properties we were having a problem with transients sleeping in the entryway of a vacant space. We installed a camera with remote access. This enabled the property manager to catch the transients in the act and call local police to arrest them. We did

press charges. The security camera worked. Like good lighting, even the very presence of security cameras can deter crime, however owners and managers should keep in mind that they have limited capabilities when it comes to helping convict criminals after a crime has taken place. The quality of camera images vary greatly, and without adequate lighting, some are virtually useless for night imaging. Most exterior cameras are effective for collecting evidence such as a car make and model and a general height, clothing, build or sex of a perpetrator, but fail to capture essential details such as license plates and facial features. Also, external cameras must be maintained like any other structure on the property that weathers the elements. Water, dirt, dust and insects can find their way into the camera housing, obscuring the view. Make sure any external cameras are clean to maximize their value. Again, just as the resolution differs from camera to camera, the quality of the housing differs as well. Vendors who specialize in electronic security can advise you on the best options for your situation. Access Controls Some buildings are designed with common area central access, which ...continued on page 13

Rental Housing Journal Metro • July 2015

RENTAL HOUSING JOURNAL METRO

Apartment Security ...continued from page 12 allows for the use of access controls. Typically, tenants are issued cards, fobs, special keys or codes that make it hard for non-tenants to access buildings. Tenants can then allow access to their guests through the use of audio or video communication to their front or back door entries. Like camera systems, access control systems require some upkeep to sustain their effectiveness. Property managers should understand their role and responsibilities to control access in their buildings. First, cards/ fobs, like keys, should be tracked and accounted for. Order new cards or fobs from the same vendor to make sure they are not duplicated. Missing cards/fobs should be immediately removed from the system, and always either collect the card/fob from the tenant upon move-out or retire the card/fob from the system upon move out. Though it takes more time and work, the most secure option is to make sure that cards/fobs are returned upon move-out and then reissued to the new tenant. By using this practice you have a general idea of how many fobs are needed for the building. If you find you are buying more fobs without retiring them, you may have an undeclared loss issue. Like computer systems, access

systems have a limited amount of memory. Adding new codes without retiring any may cause the system to reach the limit requiring the purchase of added memory, which can be expensive. The Police We encourage our property managers and tenants to call the police when faced with a security problem. We do not want anyone to get injured by an angry tenant or a criminal. Unlike the strategies previously covered, the police not only discourage crime, they also document it on the public record through police reports and can help draw the local police department’s attention to the issues at the properties. Police presence can be very helpful in discouraging crime. Sometimes, when budgets are tight or crime is rampant, the police departments don’t have time or staff to respond to suspicious activity. When all else fails, you may need to hire private security patrol services. Private Security Patrol Services Security patrol services deliver uniformed visibility to discourage criminal behavior when police departments are not available.

The best security patrol companies staff trained and armed officers who wear body cameras to track the audio and video of every incident. Their patrol vehicles are equipped with GPS and computer systems that allow them to take active notes for all properties, map locations of failed lighting systems, track parking violations, and collect evidence that can be used in court if the property owner chooses to pursue legal proceedings. Physical security companies offer services that include driving through properties and stationing overnight guards. These security patrol services typically check doors to make sure they are locked up, and respond to calls from on-site managers who request them to roust transients or help break up fights. Like the other strategies discussed, security patrol services deter criminal activity by being visible. Managers and owners can also post their signage at the property to deter criminals from cruising the property. If you have an active drug dealing problem, onsite security can help protect the onsite manager. At a difficult property it might be almost impossible to recruit and hire a property manager without twenty-four hour armed and uniformed security.

Many years ago we were hired to manage a property that the city threatened to take over due to the numerous police calls there. We hired onsite security for two months, identified and evicted the problem tenants, and were able to turn the property around. Summary Property security should never be overlooked by owners of investment properties. There are many strategies used to improve property security including thorough tenant screening, community building activities, adequate lighting, trim and effective landscaping, camera systems, access control systems, cooperation with the police and the hiring of private security patrols. When properties have a pattern of crime, it makes sense for owners and property managers to review all of the resources that can help create a safer environment for all. Safer properties equate to lower tenant turnover and more profit for property owners. Safety should always be a component of a property operations plan.

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RENTAL HOUSING JOURNAL METRO The Fair Housing Council Of Oregon • 1221 SW Yamhill St., #305, Portland 97205 • 503/453-4016 • www.fhco.org

Section 8 Protection: Oregon Enters a New Era In Housing Opportunity

By Elizabeth Gray, FHCO Intake Specialist, Fair Housing Council of Oregon

t’s been several months since Oregon fair housing law1 was amended to protect housing consumers from discrimination based on Section 8 voucher or other rental assistance income (House Bill 2639 and statute at ORS 659A.421). Source of income has long been protected in Oregon. However, when the state legislation was passed, Section 8 vouchers were specifically lobbied out as an exception. With this exception removed, effective July

1st, 1014, all legally obtained sources of income are protected across the state. In practical terms, this means that a landlord cannot refuse to rent to an applicant, or treat an applicant or tenant differently, because the applicant is using a Section 8 voucher or other form of rental housing assistance. Nor can landlords advertise “no Section 8” or “No HUD". In the words of Oregon House Speaker Tina Kotek (D-Portland), the

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expanded protection “‘creates that door of opportunity’ for voucherholders to apply for housing close to work, kids' schools and in thriving neighborhoods”. (Oregonian, July 8th, 2013) Our office has kept very busy over the past many months providing technical assistance to housing providers regarding the law’s implementation as well as advocating for consumers who have encountered resistance to their use of Section 8 vouchers and other rental subsidies. As a snapshot, we have: Sent informational letters to landlords that have posted “No Section 8” ads on Craigslist Advocated for tenants having issues leasing up with a new landlord, or current landlords that do not want to accept the voucher when a current tenant receives one Tested properties brought to our attention by complainants How to Calculate 2-3x The Rent Over these past months, one question that’s been raised by both land-

lords and tenants is how to calculate whether or not a prospective renter qualifies for the rental based on their income. The position that our office is taking is that the landlord should only consider the amount that the tenant actually pays, not the full advertised rent. For example, consider if a stated rent amount is 1200 and the landlord requires a renter to have 3 times the rent in income. A non-Section 8 tenant could be required to show income of 3600 dollars per month, but if a Section 8 (or other subsidy) tenant would pay 300 dollars in rent and the local housing authority would pay 900, then the tenant should only be required to show income of 900 dollars per month. You can find a more detailed discussion of this issue (and many others) in Question 7 of the Frequently Asked Questions referenced below, a wonderful resource for both housing providers and consumers that was compiled by attorney and FHCO board member John van Landingham of the Lane County Law and Advocacy Center. The document is ...continued on page 19

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Rental Housing Journal Metro • July 2015

RENTAL HOUSING JOURNAL METRO

9 Tips ...continued from page 8 tainty that their particular strategy is the supreme strategy so there is no earthly reason to even consider anything else. Following a one particular strategy as a beginning investor can be extremely valuable for the overwhelmed new investor since it allows him to really, really learn how a particular technique works. The downside of being so narrowly focused is that it limits the new investor’s opportunities. If you believe that your investing strategy is the only strategy worth pursing, to the exclusion of all others, you will have a narrow viewpoint of what a “good” deal is, and pass up a lot of opportunities to profit with another strategy. Don’t get so stuck in a mindset that you can’t even see good deals if they are out of your comfort zone. That being said. You can’t try to participate in a dozen strategies at once…see number

4. Have A Plan All businesses need a game plan. You can’t just wander aimlessly hoping to find a deal. You also can’t rent an office, decorate it and then sit behind your desk waiting for the phone to ring. It just doesn’t happen that way. You need to decide upon a strategy, learn what you need to do, set your goals and make it happen! Have a plan. Pass out 50 business card a week (or whatever goal you

Rental Housing Journal Metro • July 2015

decide is appropriate for the amount of business you want to generate). Talk to 50 people by phone. Make 10 offers a week, spend $100 a month on advertising – whatever your goal is, make it happen every single week – day in and day out – work the market. Eventually you will start to see results.

5. Surround Yourself With LikeMinded People Real estate investing can be “creative” and a bit non-traditional, which means that this profession won’t appear on the Forbes top 100 professions. Because those participating in real estate often do so by working for a corporation or as a realtor, investing as an independent isn’t a main stream career choice. Thus, most people you speak with will tell you it won’t work. Some of your friends might even ask if you bought a course from a late-night television “guru.” They may even laugh and call you “gullible.” Attorneys and other professionals may denounce it because it sounds unusual. Keep in mind that these people are either threatened by their own lack of success or are looking to protect their own butts. The first thing you should do is join a local real estate association connected to National REIA. These associations will help you keep your thoughts in the right place and prove

to you that investing with a plan really does work. You will be connected to investors that have had great successes, those that can share what they learned from their not so successful deals, and to those who are just starting in the business just like you.

6. Be Persistant Anyone who’s ever been in sales will tell you that being persistent is the key to success. Just because a person says “No” to an offer the first time doesn’t mean that’s the final answer. Waiting a couple of weeks and checking back to see if the situation has changed can make all the difference, or changing the terms of the offer slightly to accommodate the seller can jump start negotiations. Have a good follow-up system for tracking contacts, leads and conversations you’ve had with both buyers and sellers. You’ll get to the point where you’re so busy you can’t possibly remember all the conversations you’ve had with everyone – it’s important to be able to pull up that information so you know where you are in the negotiation process. Anyone who has ever been in sales will tell you that few deals are ever made on the first try. Use a system that allows you to schedule follow ups and keep a running history of calls and conversations. One of the National REIA benefits is a huge dis-

count on Realeflow, but you could also use ACT by Sage, an Outlook or Gmail plug-in or one of hundreds of apps for your phone or iPad. It doesn’t matter what software you use as long as you actually use it.

7. Have a Team On Your Side Don’t wait until you have a big deal pending and need to ask questions before assembling a team you can turn to. You need to go out and cultivate relationships with reliable professionals you can depend on. Here’s who you need on your team: • Attorney – preferably someone who’s familiar with the needs of a real estate professional. Make sure they understand the specific real estate strategy that you are using and that they’ve had some experience in that specific strategy. You don’t need to know all of the real estate laws that will affect your business but you need an advisor who does. • Insurance agent – you need one that also understands your strategy and investors in general. Make sure the insurance products they sell are right for investors. We have needs that are far different than your average home owner. • CPA or Accountant – find one that’s a real estate investor – they’ll ...continued on page 20

RENTAL HOUSING JOURNAL METRO

sk the Secret Shopper

ach apartment community has certain features and benefits, which are the selling points of that particular community. It could be its location, friendly staff, spacious floor plans, beautiful landscaping or affordable price; just to name a few. Yet even with the most fabulous features, there will be times when the apartments you have available won’t seem to meet the needs of your prospective renters. The following question from a leasing consultant addresses this issue: Q: We have several vacant apartments right now and I know I’m supposed to try and rent all of them, but how can I rent to someone when it doesn’t seem like the apartment will really meet their needs? A: Things are not always what they “seem.” Many times you may have the tendency to make an assumption about what you think someone needs based upon your limited perspective, frame of reference or belief system. For example, you might have 2 bedrooms available right now that are all located on upper floors. If a family with small children comes in, you might automatically assume that they are not going to be interested because you think they won’t want to deal with the stairs. On the other hand, you could have all first floor openings and your prospective renter could be

a single woman. You might think women living alone only want upper level apartments because you believe they feel safer off the ground. Therefore, when you have a single woman seeking a new home, you may not try to sell her on a first floor location because you don’t think it will meet her needs. Until you truly get to know your prospective renters and determine what is most important to them, you really don’t know what they need. You are merely making “assumptions.” It could be that the husband of the family mentioned above travels a lot. The wife may prefer an upper level apartment as she is frequently home alone with their small children, and would feel safer living upstairs. The single woman might have a lot of equipment that she has to bring home from work each day, and does not want to deal with constantly lugging it up and down the stairs. It’s important to remember that every person who walks through your door is as unique and special as each one of your available apartments. The term “one size fits all” may work when you are buying a stretchy article of clothing. However, when it comes to helping people find a new home, no apartment will fit the same two people in the same way. For those times when

you have prospective renters with needs you just cannot meet, send them to a sister community and/or offer to pay them a referral fee for anyone they refer who rents. Since things are not always what they seem, you never know when a prospective renter who does not end up leasing could be a source of referrals for months, or even years to come. If you are interested in leasing training or have a question or concern that you would like to see addressed, please reach out to me via e-mail. Otherwise, please contact Jancyn for your employee evaluation needs: www.jancyn.com

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Why Real Estate Investors are Vital to the Housing Market Nearly three years ago as we entered our relationship with our lobbyists and political advisors I was forced to truly evaluate our industry in the light of “big” politics and the “hot” issues that surround real estate. It was then that I saw how very important we are to the nation’s economy and the population in general. Real estate investors, not large apartment owners, not real estate investment trusts, not HUD based projects, are the backbone of housing. Our members as a whole address all the issues that are vital to today’s housing market – affordable housing, first time buyers, community rehabilitation, etc.

nvestors are vital to the housing market and to the communities we serve. In 2007 – 2010 during the worst of the crash and when the value of housing plummeted and conventional financing had all but disappeared investors were the only ones keeping communities alive, preventing entire neighborhoods from being vacant and falling into disrepair. Housing choices are important to the economic vitality of the larger community. Cities, counties, and states are in increasingly heated competition to attract companies to their areas. Good paying jobs, increased property and income taxes, and an improved quality of life for local residents are the expected paybacks local governments hope to receive when a major employer decides to locate in their area. In the past, economic development officials would offer tax exemptions or abatements as incentives to convince companies to

choose their location. Today, although taxes and the general business to a large and diverse labor pool has become the most important factor in making corporate decisions on

location. And the number one problem facing the labor pool today is housing affordability.Accessible jobs and affordable housing are, therefore, inextricably related. A

recent survey by the New York businesses surveyed cited housing costs as a serious deterrent to attracting firms to New York. Additional surveys in the suburbs of Chicago and LA have found similar results. Housing offered by real estate investors, therefore represents a major economic development tool for cities, counties, and states. Most companies employ workers with a wide range of skills and pay them a wide range of salaries. Companies seek business locations that can provide attractive housing opportunities for all of their employees, from administrative staff to executive management. Many communities, however, have failed to provide affordable housing options to low- and middle-income workers. When communities fail to provide a balanced range of attractive housing options to households in all income groups, the region becomes less appealing to businesses. A lack of adequate housing for low- middle...continued on page 21

Timid with their Growth ...continued from page 11 • Think “where” and not “how.” Look at the road in front of you. Don’t focus on how you’ll make it happen. The “how” mentality is sort of like trying to edit a first draft before it is written; the “where” mentality allows you to simply get your ideas out first. Where do you want your company to go? Look down the road, see what you see and let the view have its moment. Don’t get ahead of yourself. The how will have its day. • Think outside the box. Getting out of your comfort zone will change your usual thought patterns and spark creativity. Think about crazy stuff – maybe something too outlandish to share at a meeting or even consider seriously. “I like to use a technique called ‘mind-mapping,’ which isn’t so much formal writing as it is plopping down random thoughts onto paper and fleshing them out later,” Herod says. “Mind-mapping allows you to brainstorm without having to provide explanations of strategies for achieving the desired goal. Here’s

a good rule: if what you think about during one these sessions seems bizarre or unlikely, it’s something you should definitely include in your vision.

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Dear Maintenance Men: Dear Maintenance Men: We have been in drought conditions for a long time here in the West, however I keep hearing about the wet weather condition called “El Nino”. What is “El Nino” and how should I prepare my apartment building for its coming? John

windy weather, they can cause a lot of damage to a roof if a limb breaks or a tree falls because of soggy soil. Flat roofs are especially vulnerable to blocked scuppers and roof drains. The backed up water will find the slightest weakness in any roof system and even cause a roof collapse.

Dear John: An El Niño is a weather pattern produced by unusually warm ocean temperatures in the Equatorial Pacific. The El Niño phenomenon is associated with extreme weather around the globe and in California it typically means a wet winter with higher than normal rain levels. The National Oceanic and Atmospheric Administration (NOAA) is predicting a 60 percent change that the El Niño conditions will continue all year. So how do you prepare for El Niño? Inspect your building’s roofs, gutters, drains, flashing and trim overhanging trees. In other words, don’t wait for the wet season to find out your roof is in poor condition. Get the work done now while it is dry and the roofing companies are not busy. Don’t forget about large trees that hang over your roofs. In wet

Dear Maintenance Men: Pigeons are driving me crazy! I have tried everything to get rid of the pigeons that have taken over eaves and patios at my complex. I have used fake owls, high pitch sound devices, goop to give the pigeons sticky feet and spikes everywhere. They just laugh at the spikes and walk and nest over them. Any advice will be welcome! Jennifer Dear Jennifer: Although your situation is beyond this; the first line of defense is not letting pigeons get a foot hold at your property in the first place. Talk to your residents and make sure no one is feeding the pigeons! It sounds like you have tried most of the common antidotes for getting rid of established unwanted pigeon flocks. Getting rid of pigeons is a war of

wills. If you give up, they will return. The key is to make them as uncomfortable as possible and not stopping until they are gone. First thing to do is clean the area with bleach to remove any pigeon nesting smells and spraying any stubborn pigeons with a water hose over and over. If the area lends itself to be closed off, put up netting to keep the birds from entering the area. If the spikes are broken, replace with stronger ones. Check at your local farm supply or the internet for stronger better quality spike strips. The area must be monitored constantly until the birds have found a new nesting area away from your building and remember, this is a daily battle if the campaign is to be successful. Dear Maintenance Men: Drought or no drought, I have decided to ditch my lawn! I figure in the long term, getting rid of the grass will save me time and money with less watering and maintenance. What recommendation do you have to help me achieve my plan? Dorothy Dear Dorothy:

Creating a drought tolerant landscape is a great idea. As you mentioned, the drought tolerant landscape will cost you less money in water and will be easier to maintain. The single greatest consumer of water in your landscape is the turf. Reduce the grass area to ease the burden on water. Xeriscaping is a term for a water conserving landscape. Some of the benefits of Xeriscaping is water saving, low maintenance, pesticide free, pollution free (no lawnmowers) and use of local native plants. You might want to consider using Ornamental grasses, as they are drought tolerant, look great and give your landscape a bit of vertical dimension. Succulents of course are great at conserving water. Flax and Delphiniums Iris are a few perennials to use. Marigolds, Mexican Sunflowers, Phlox and Vinca Passion are Annuals that will work well. As for shrubs, look at Japanese Black Pine, Mountain Currant, Sassafras, Honeysuckles etc. A good choice in trees are Acacia, Gray Birch, Monterey Cypress, Eucalyptus, Fig, Juniper Amur Maple to name a few. Check with your local nursery for what best suits your area as or climate. Be sure ...continued on page 23

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Behind the Leasing Desk with Heather Blume Dear Heather, I have worked for the same property management company for several years and have worked my way into a good salary, benefits, and a Manager in Training role. With this role comes great responsibility, including taking on the challenge of supervising employees. The downside to this role is that I don't really have the autonomy to really fix some issues that drive me crazy within my office and for the most part, my hands are tied when it comes to disciplinary action issues because that is my manager's responsibility. You see, I have a coworker that has a variety of health issues and it is known within the office and management, so therefore, we have to accommodate. I have no problem with this for the most part. My issue is that she calls out a lot. When I say a lot, I mean it is to the point of being predictable. Even my maintenance staff make jokes about her calling out so much. For instance, I will get a text that tell me how she's not feeling well and how it's ruining her weekend. First off, this is rather annoying because I frankly don't care what she is doing on her days off. Secondly, this irritates me even more because in my eyes this is a set up for the inevitable call out for her return to work from her weekend break. Not only that but she won't hesitate to share with you that she suffers from several ailments at the same time and all of the details of them ...I am not trying to belittle her health conditions but I honestly have never met anyone with more issues that prevents them from working in my life! I have brought these frustrations to my manager's attention many times. The response I get is very HR (which I understand) and it's typically something like "you have to accommodate by giving breaks during the day or allowing her to go home early or come in late". Seriously?! Can't I just get a Leasing Agent that shows up and isn't a Web MD nightmare? Although her call outs have been less frequent than before, it's

still predictable and if she does show up, she is so loopy from her medications it makes it difficult to work with her. My manager has told me to send her home if she comes to work loopy but frankly, I need her in the office and can't afford to be alone in the office any more than I already am. How do I balance my feelings of frustration and disbelief in her legit "sick days" and still be in compliance with the law and not on the wrong side of an lawsuit? Some days I believe she is ill and other days I think she just didn't want to get up out of bed and come to work. She has even mentioned that she knows my manager can't fire her because she could sue based on her medical issues. I know we all have a right to call out sick but I just feel like it's predictable and abusing that very policy that is meant for those that do have medical issues that truly inhibit them from working normal shifts or performing daily tasks. How do I overcome these feelings of not believing her, not feeling confident in her attendance, not feeling confident that her ailments are severe enough to prevent her from working or performing her duties, and yet knowing that I have to accommodate her call outs and deal with it? Please Help! Sick and Tired of those who are ALWAYS Sick and Tired Dear Sick and Tired of those who are ALWAYS Sick and Tired, Wow! This is a really horrible situation and I can imagine that you must be thoroughly frustrated, even more than your letter sounds. It's always difficult to work in an environment where you feel there is someone who is shirking their responsibilities, and working in a property management office with that sort of a person is extra hard because our days move so fast that once you get behind, you never feel like you can catch up.

First, while I very much sympa- some states are verbal contract states thize with your situation, I have to and what she says in her inebriated concur with the "very HR" response state, you and your company can be that you've gotten so far. Employers held legally liable for. On top of MUST make accommodations to sick which, any contract that she signs employees under federal law, but with a resident might not be valid if more than that, this particular she, as a company representative, is employee has already placed a not- in an altered state. Plus, in such a so-veiled threat against them. state, she could write a contract for Whenever you have an employee either the wrong amount of rent or who KNOWS and has the audacity the wrong lease term, and once the to say that they know they can sue resident has signed it with her, you're their employer upon termination, it's bound to that contract. Send her a very sticky situation. On one hand, home when she's a threat to your if any other employee pulled this NOI. So let's talk about some solutions. behavior, you'd do the write ups and terminate them. On the other hand, One of the things that you menit's going to cost you much more in tioned is that you can't afford to be the legal and public relations arena alone in the office anymore than you to get rid of this person than to let already are. This may just be the them half ass their job. From a com- background of a staffer talking, but pany view point, you're picking up one of the quickest ways to call the slack, so they aren't out anything attention from the corporate office to and they don't have to deal with the the escalated degree of the problem is to call your local staffing agent problem. Second, you have to make sure when she calls out, or when you that even through your dissatisfac- have to send her home sick. The cortion with this employee that you are porate office might not notice the not making the work environment stress that it puts you under to not hostile so she will leave. She can sue have her there, but they WILL notice the company for that as well, and a the stress that staffing costs put on lot of those kinds of suits are being your budget. This is a risky solution, won currently, plus with the health however, so it might be worth it to issues she has, she'll have the sympa- just contact your office about thy on her side. Problems all around ASKING for staffing. It will have a similar effect, and won't potentially on that front. Third, if she comes in "loopy" on get you in as much trouble as just her meds, you really should send her calling a staffing agent without home. I know this puts additional approval will. Now here's the good news stress on you, but remember that

New Era ...continued from page 14 comprehensive and evolving, and created in partnership with landlord trade groups, other legal aid offices and colleagues, as well as representatives from housing authorities around the state. View the full PDF at www.FHCO.org/pdfs/ Section%208%20Source%20of%20Income%20FAQ%20clean%20copy%20 10262014.pdf This article brought to you by the Fair Housing Council; a civil rights organization. All rights reserved © 2015. Write jbecker@FHCO.org to reprint articles or inquire about ongoing content for your own publication. To learn more… Learn more about fair housing and / or sign up for our free, periodic newsletter at www.FHCO. org. Qs about this article? ‘Interested in Rental Housing Journal Metro • July 2015

articles for your company or trade association? Contact Jo Becker at jbecker@ FHCO.org or 800/424-3247 Ext. 150 Want to schedule an in-office fair housing training program or speaker for corporate or association functions? Visit www.FHCO.org/learning-resources/ trainings to learn about the trainings we offer for companies and groups. Federally protected classes under the Fair Housing Act include: race, color, national origin, religion, sex, familial status (children), and disability. Oregon law also protects marital status, source of income, sexual orientation, and domestic violence survivors. Additional protected classes have been added in particular geographic areas; visit FHCO.org/mission.htm and read the section entitled “View Local Protected Classes” for more information. 19

RENTAL HOUSING JOURNAL METRO

9 Tips ...continued from page 15 know the ins and outs of the business and when to be aggressive. You can lose $1,000s in deductions and tax breaks without a professional that knows the most up to date tax law as it applies specifically for investors. • Contractor – you need a reliable professional that shows up on time, completes the job within budget and knows how to make suggestions that will save you money. Free estimates don’t hurt either. • Mortgage broker, private money lender, hard money lender or other money professional – find one that’s experienced with investors, knowledgeable and creative. You can never have too many people who are willing to fund your deals. • Mentor – someone who’s been there and done that. • Title or Escrow Company – find one that caters to investors. Make sure they understand double closings, land contracts, etc. Your local REIA group has local and national providers to use to build your team. These professionals work daily with investors and understand their special needs and requirements. It is a beautiful day when you realize that you can find people to

add to your team that can do all of the things in your business that you hate.

8. Don’t Waste Time With Unmotivated Sellers This is possibly the most common mistake new investors make. Some beginning investors waste time talking to sellers who are only marginally motivated. Even worse, they drive by the house and look for comps without even talking to the seller first. There’s a difference between being persistent with a seller or buyer who hasn’t yet made up their mind about what they want to do and dealing with a seller who really has no intention of selling anytime in the near future. Don’t waste your time if the seller falls into the latter group. 9. Never Forget That Real Estate Is Really About People In the end real estate isn’t about the land, the house, or even the money. On a practical note and an altruistic note, it really is all about the people. Many people go through their first years of real estate investing making all their offers based on the properties. This is a huge mistake. These investors worry about making really low offers because they are concerned that it will make them a

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“bad” person to “take advantage” of a seller, especially one in a tough situation. What they don’t understand is that many people will happily forgo profits if other benefits are more important to them. Some people need speed, some need ease of exit, some need someone else to blame. I’ve heard more than one investor tell a story about a seller who happily sold below market because their son, sister, nephew – pick a relation – wouldn’t pay rent or move and they honestly just wanted to sell the house and let you deal with the situation! There is a scale of client motivations, the Hustead Scale, that concisely describes the level of motivation a seller has. The most motivated sellers will pay to get out of a house. Something in their life makes being out of that property so important that they will pay you to take the property. Many investors make offer after offer, receiving rejection after rejection, never bothering to ask the seller what they want, assuming they already know. Making offers on the properties because you think you understand the value is far less effective and far less profitable than making an offer that provides the seller an option they didn’t know existed, a solution to their problem. The moral of the story here is that

if you listen, and I mean REALLY listen, and try to solve the seller’s problem you will always make more money than if you try to just apply your cookie cutter approach. Zig Ziglar used to say “You will get all you want in life, if you help enough other people get what they want.” He’s right. This business, at its core, is about people. We provide housing, we provide solutions, and sometimes most importantly, we provide options they didn’t know were available. There you have it. Follow these nine simple steps and before you know it, you’ll be an outstanding real estate investor.

Leasing Desk ...continued from page 19 People who are frequently absent or who do not seem to connect with their workplace rarely stay there long term, so she may be on her way out. Also, if she's made the lawsuit statement, that might be what she's really looking for, and when you do not provide her with the grounds to sue, she'll move on and look for another rube to play this game with. How you, as a manager in training, handle a situation like this can be a defining moment for your career. You can take the path of secretly hating your coworker (and believe me, MANY of us take that path, as it's the easiest), or you can try to ignore as much of the situation as you can and realize that you can only do what you can do in any given day, or your can try to reach the employee on a personal level. The last is the hardest to do, but also the most long term rewarding of the options presented. To open communication you have to re-foundation some modicum of trust between the two of you. I would start by giving her massive positive reinforcement on days when she doesn't call out sick or come in loopy. Extending yourself as a mentor and trying to have a different relationship with this employee might encourage her to come to work more often and to call out less. As for managing your feelings on the issue, my best advice to you is to step back and take some deep per-

spective on the issue. I want you to ask yourself if it's really worth you caring if you believe her or not? If it's worth carrying anger and spite over something you cannot prove and something that in the long run will not make a difference? My mother once told me that you only have so many pieces in your matched set of emotional luggage, and you have to choose what's worth packing in them. You can't carry everything, so make sure that she's worth putting in there. Good Luck to you! Heather

Heather is the Imagination In Charge of Behind the Leasing Desk Training & Consulting Services out of Seattle, WA. An accomplished national speaker, trainer, consultant, career coach, and author of both books as well as countless industry related articles, Heather holds her CAS designation, is NAA Advanced Instructor trained, and has been a member of the NAA Faculty since 2009, serving as a WMFHA, CAM, and NALP instructor since 2009. You can check out more of her musings, podcasts, and class offerings at www.behindtheleasingdesk.com

Rental Housing Journal Metro • July 2015

RENTAL HOUSING JOURNAL METRO

Investors are Vital ...continued from page 17 income workers drives up land and housing prices, further exacerbating housing affordability issues for workers with higher incomes. Such shortsighted and self-centered policies result in de facto segregation based on household income and type. Local officials who fail to plan for or permit housing options offered by investors and who enact restrictive local regulations that work against investors cripple their communities in the long term. A recent report from the Harvard Institute of Economic Research posits that homes are expensive in high-cost areas primarily because of government regulation, that is zoning. Though such planning and regulations often are deliberate, the combined unintentional consequences can be detrimental to the overall community’s economic vitality in the long term. Where alternatives to expensive single-family homes are not available, many households are forced to move farther away from employment centers to find affordable housing. The quality of life and worker morale suffer. While the effect of the problem used to be limited to low-wage workers, today many middle-income workers, such as teachers, firefighters, and nurses, cannot afford housing near their work. If the lack of

affordable housing near employment centers becomes severe, a labor shortage will result that then will require employers to pay higher wages to attract scarce workers. Higher wage scales ultimately will drive up the costs of many goods and seriveces.Businesses eventually may be forced to relocate to areas with less expensive housing markets. Such relocation decisions often have a negative impact on the regional economy. If workers are forced to commute long distances because of a lack of affordable housing near their jobs, they contribute to increases area wide traffic congestion. As more cars crisscross the community from distant homes to work, everyone’s commute becomes more difficult, more fuel is consumed, air pollution problems are exacerbated, a feeling of crowding and frustration is created, and the overall quality of life for a region declines. Housing options allow more people to live in housing they can afford that is near their work. Real estate investors enable communities to provide housing that is affordable to a wider range of incomes. This is due to not only housing options but the ability to offer

creative purchasing and financing options. The problem of housing affordability worsened. In parts of the country where economic growth was the strongest, the labor force critical to sustaining the economy either could not find housing that was reasonably priced or could not locate within an appropriate commuting distance of their jobs. The rapid appreciation of home prices in many major metropolitan areas has shut many low- and middle-income workers out of the market. Families who pay more than 30% of their income for housing are considered cost burdened. The center for Housing Policy confirms that working families are being squeezed. Recently, the number of working families with a critical housing need—defined as having to spend more than half their income on housing or living in substandard housing—has i n c re a s e d tremendously. The Department of Housing and Urban Development states that an estimated 12 million renter and homeowner households now pay more than 50% of their annual incomes for housing. Households depending on a single salary such as that of a teacher or a police officer cannot afford to buy a median-priced home in two-thirds of the metropolitan areas in America.

Nurses, for example, are priced out of all but the lowest cost-to-income markets, while janitors and retail salespersons cannot afford to purchase a home across the board. These households are an integral part of the community and provide essential government, retail, and business services that are associated with a high quality of life for everyone. Housing options offered by investors are often are more affordable housing option, providing housing opportunities to wide range of incomes. In addition minorities and immigrants – tend to have larger households – will almost certainly account for a growing share of these new, young, households. This diversity will boost demand for a greater variety of rental housing. (JCHS study) Trends in homeownership rates are another wild card. With the ongoing foreclosure crisis and stubbornly high unemployment rates, homeownership rates have steadily declined. Tighter underwriting and income verification standards have also made it much more difficult for potential home buyers to qualify for loans. This is how investors help with single family homes as rental ...continued on page 22

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Investors are Vital ...continued from page 22

properties or that are available with a rent to own option. Not only can they provide often more suitable properties within traditional rental arrangements but they can also provide more creative terms for financing or other creative ways to own a property.

Real estate investors were providing “workforce housing” long before the term was coined. When affordable options are not available, households are forced either to move farther out, enduring long commutes that aggravate existing traffic problems, or to double up and

endure crowded housing conditions. If the situation is bad enough, they move to a more affordable community, leaving behind a labor shortage and all of the problems associated with it. We look forward to welcoming you to our real estate investing

community where you too can attain personal success and financial freedom while contributing to the economy and supporting the neighborhoods you invest in.

To help you understand just how vital our participation in the housing industry is consider: For those of us who own rentals we must realize that rental housing is needed and is preferred by many people today. • Renting had a long stagnation during the time leading up to the housing crisis. As credit was easily available many who would generally be in the pool of renters went the route of homeownership. Renting is on the rise as from 2007 – 2010 there was a renter household growth surge.

• Nearly 78% of those ages 25 – 30 are renters according to the Joint Center for Housing Studies. For those that are 40, 33% of them still rent and by 55, 20% are still renters. • Of all American renters two thirds do not live in apartments. They live in housing generally

supplied by investors: single family homes, duplexes/quads, and mobile homes. • Most new immigrants lack the capital required for sustaining the demands of homeownership and will remain renters for ten or so years before they can afford to become homeowners.

• The more than 77 million Baby Boomers are now over 65 and now are scaling down and choosing the convenience of renting.

...continued on page 23

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RENTAL HOUSING JOURNAL METRO

Housing choices are important to the economic vitality of the larger community. • The number one problem facing the labor pool today is housing affordability. • Failing to provide a balanced range of attractive housing options makes a region less appealing to businesses while also driving up land and housing prices, thus promoting de facto segregation based on household income and type. • Where alternatives to expensive single-family homes are not available, many households are forced to move farther away from employment centers to find affordable housing, creating traffic and pollution problems as well as a lower quality of life and a decline in worker morale. • If the affordable housing situation is bad enough, businesses may be forced to relocate to areas with less expensive housing markets. • Many families who prefer single family or duplex housing still cannot qualify for financing and prefer renting something other than an apartment.

Options offered by real estate investors in housing enables communities to provide housing that is affordable to a wider range of incomes. • In parts of the country where economic growth typically is strongest, the labor force critical to sustaining the economy cannot find reasonably priced housing or cannot locate within an appropriate commuting distance of jobs. The affordability index of cities that are experiencing a boom is plummeting. Realtor.com in an article in May of 2015 states that areas that are growing have rising home prices. Areas of double digit appreciation doubled and have caused an inventory shortage. • Households depending on a single salary such as that of a teacher or police officer cannot afford to buy a median-priced home in twothirds of the metropolitan areas in America. • The Department of Housing and Urban Development states that an estimated 12 million renter and homeowner households now pay more than 50% of their annual incomes for housing. This is up from 4.8 million households in 2002 that were working families with a critical housing need, defined as having to spend more than half their income on housing or living in substandard housing. • A family with one full time worker earning the minimum wage cannot afford the local fair-market rent for a two bedroom apartment anywhere in the US.

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• Under financial pressures, households typically are forced to move farther out from their jobs, enduring long commutes that aggravate existing traffic problems, or to double up and endure crowded housing conditions. • Housing options that real estate investors provide play an important role in housing the workforce. They have been providing “workforce housing” for decades, long before the term was coined.

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Rental Housing Journal Metro • July 2015

RENTAL HOUSING JOURNAL METRO

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Rental Housing Journal Metro • July 2015