Metro (Portland) RHJ December 2017

Rental Housing Journal Metro

December 2017

2. Free Online Sexual Harassment Training for Property Managers

7. Do You Give Feedback People Can Actually Learn From?

13. Dear Maintenance Men – Water and Wax Removal

4. How to Get Started in Owner OccupiedMultifamily Investing

9. Winterizing Your Investment Property for Colder Temperatures

15. Portland Landlord Facing Re-election and Tenant Uprising

5. President’s Message – $50 Credit for Donating

10. Renting to Roommates

18. 4 Roof Preventive Maintenance Steps You Should Take Before Winter

12. Cash Flow from Car Charging

6. The Realities of Property Management

www.rentalhousingjournal.com • Professional Publishing, Inc

Portland/Vancouver

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

13

New Tax Laws Subtly Affect Commercial Real Estate

Ways to Pet Proof your Rental Property

Could Alter Capital Flows, Business Structures and Portfolio Strategies

by John Chang

N

ew tax laws hold modest change for investment real estate. The highly anticipated tax reform legislation making its way through

T

...continued on page 8 Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

deductibility and asset depreciation. The two versions, one from the House of Representatives and one from the Senate, have yet to be reconciled, but neither ...continued on page 1

Beware of the Prepayment Penalty

hese ways to pet proof your rentals can be helpful as some landlords and property managers are concerned about opening their properties to pets. However, they also know they can attract and keep more good tenants if they are a pet-friendly property. The maintenance checkup this week provided

by Keepe focuses on ways to pet proof your rental property to be sure you are protecting your investment and income as well as keeping your tenants happy.

Ways to pet proof your rental with a property makeover Property makeovers are the best way to minimize property damage by investing in durable, long-lasting solutions.

While they may require additional costs and work, property makeovers designed to thoroughly pet-proof are the most secure way to protect a property and increase the safety of pets.

1 - Vinyl, linoleum and tile floors are tough, impermeable and scratch resistant.

Converting existing flooring into one of those durable alternatives significantly reduces the likelihood of flooring damage that results from the activity of pets and their potential ‘indoor accidents’.

Congress could be signed into law by President Trump this month. For real estate investors, the final versions appear relatively benign, with only modest changes to key provisions such as the 1031 tax-deferred exchange, mortgage interest

by Cliff Hockley

I

have been counseling clients for a long time to be careful of prepayment penalties that lurk everywhere in today’s mortgage environment. I don’t like prepayment penalties because they limit your flexibility as an investor (as both Buyer and Seller) in real estate, but they PRSRT STD US Postage PAID Portland, OR Permit #5460

are hard to avoid, and my clients have had many run-ins with prepayment penalties.

Three years ago, I had a client (a Buyer) that was about to close on a transaction when the Seller refused to close. The Seller had not checked on his prepayment penalty, and at the last minute found out it was going to be $250,000. In the end, the Buyer assumed the existing CMBS

financing with the Seller paying all assumption costs and agreeing to a price reduction, but it added tension to the deal, and it involved attorneys to sort it out. The Buyer was in a 1031 and had a huge amount of tax penalty at risk.

In a similar situation, another client was recently bitten by the prepayment penalty snake. She refinanced a property, assuming that she was going to hold it for an additional five years. She intended to use the refinance funds to buy another property. Then, out of the blue - just six months after her refinance, another investment opportunity surfaced that needed her to come up with more cash. Her prepayment penalty cost for that small project was $ 45,000 - that’s $45,000 that is no longer available to invest in another project. Using a 6 CAP she lost $750,000 in upside – a significant loss - but she had a better opportunity that needed the balance of the cash.

When does a prepayment penalty occur?

• Some prepayment penalties (or inability to pay off a loan) typically occur in the following cases: ...continued on page 11

Text REALESTATE-ROI to 44222 to receive a digital copy of this year's Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market

Rental Housing Journal Metro

Free Online Sexual Harassment Training for Property Managers

by John Triplett, Rental Housing Journal

W

ith a new initiative from the U.S. Department of Justice to combat sexual harassment in housing, it is more important than ever that landlords and property managers know the Fair Housing Act and state laws on the issue.

The online training leader in the multifamily industry, Grace Hill, is offering free sexual harassment training for the property management industry to help with the new U.S. Justice Department initiative to combat sexual harassment in housing.

The Justice Department settled over $1 million in housing sexual harassment so far in 2017 Since January of this year, the Civil Rights Division has filed or settled five cases and recovered over $1 million for victims of sexual harassment in housing.

“No woman should be made to feel unsafe in her own home,” Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division said in the release. “The Justice Department is committed to vigorously enforcing the Fair Housing Act’s ban on sexual harassment and is looking forward to working closely with state and local partners to combat this problem.”

Dru Armstrong, CEO of Grace Hill,

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said in an interview with Rental Housing Journal that it is important to provide tools that managers and employees need to navigate the sexual harassment laws and changes going on today.

“We're very focused on ultimately helping employers and employees create an ethical culture, and a welcoming workplace. I think one of the key ways that you do that, is by empowering your employees with knowledge, and understanding of what those laws are, and how to act appropriately in a situation, which is exactly what our courses do.”

The free course can be accessed here online. Anyone in some type of role in an

apartment community, whether landlord, a property manager, maintenance person or anyone can go in and look at the course, even though their manager may not have told them to, or hasn't instructed them to.

Armstrong said, “I felt very strongly that given our leadership position, it made complete sense to make this course as widely available as possible.

“If folks felt like they needed to better arm themselves in order to stay in adherence with the laws, and behave appropriately on site, then we should absolutely do that. I think it's really powerful when training is effective, everyone wins, because you're helping both the employer,

and the employee create a welcoming workplace, and I think that's what, at the end of the day, compliance training, and sexual harassment training is all about,” Armstrong said.

“It covers all of the basic federal laws that anyone needs to know, and the great thing about our course ware is, not only does it teach you the law, but it allows you to practice applying that, and then actually tests you to see whether or not you'd successfully been able to apply those principles. You want people to feel prepared when they actually go on-site, and are in those situations real time,” Armstrong said.

“We’ve actually written scenariobased assessment questions based on real case law. Often times you're answering a question that a real court decided, and so it can be hard.

“That's the whole point of training people, and using online training, so people can keep going back to the materials, keep accessing, and I think nothing is more powerful than when a learner raises their hand, and says, "I want to go take this course, because I want to feel more prepared, so I can be successful at my job," Armstrong told Rental Housing Journal.

“That is exactly why we made it free on Visto, so that anyone in our industry that feels like, "Wow, there's a lot happening in ...continued on page 16

Rental Housing Journal Metro · December 2017

Rental Housing Journal Metro

Rental Housing Journal Metro ¡ December 2017

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Rental Housing Journal Metro

How to Get Started in Owner Occupied Multifamily Investing

By Vinney Chopra

O

wner occupied multifamily investing can be a great starting point for new investors. Veteran multifamily investor Vinney Chopra has some ideas for you to think about in owner occupied multifamily investing.

I enjoy teaching investor students and helping them learn about multifamily investing and syndication and all of the benefits it brings, but some ask how to get started?

Not everyone is ready to start out buying large apartment complexes for many reasons.

It takes time to learn the right emerging markets. It takes time to learn how to finance big projects. Plus, it takes time to raise money and build relationships with investors and real estate brokers. And don’t forget it takes time to learn how to analyze the deals. That’s a lot!

So when students ask how to get started now, I talk about the advantages of owner occupied multifamily investing in real estate.

What is owner occupied multifamily investing?

Simply put, owner occupied multifamily investing real estate is when an investor

• Renters may not want to live in same resides in one part of the property while building with landlord renting out the other units.

Many new investors in this owner • Avoid becoming friends with your tenoccupied multifamily investing area start ants out with duplexes, triplexes or fourplexes.

• Tenants are your neighbors and you However this is not for everyone as it may not like them puts the investor in the position of being • Conflicts can occur a hands-on property manager with the tenants and dealing with all the property The distinct advantage of owner management issues such as tenant occupied multifamily investing There a very distinct advantages that screening, repairs and even evictions.

Here is a set of pros and cons from we must keep in mind in owner occupied fortunebuilders.com that sets out some of multifamily investing. Not only can you the basics of learning the owner occupied use rental income to offset the amount you pay against multifamily investing the mortgage, business: there are several • It can pay for itself tax deductions • Easier to finance and depreciation • Learning property advantages to management first living in the same hand property you also • Tenant screening rent. becomes very imLiving in portant as they are Vinney Chopra meeting with a student your own rental your neighbors property, of course, now isn’t for everyone. Whether you will • First step toward larger properties and gain greater income from an investment your multifamily investing career property or an owner-occupied rental property ultimately depends on your However there are downsides: individual circumstances. You should • Tenants complain consult a financial consultant or tax

advisor to discuss your bottom line. But here are several of the advantages to owner-occupied income properties to consider: • Higher quality tenants. Many renters are particular about who they have to live next to, and having an owner-occupied building is reassuring. Owners are also selective about who they allow to live next door, thus attracting higher-quality tenants. It’s a beneficial dynamic that brings tenants who are willing to pay higher rent.

• Writing off expenses. Simply put, owners who occupy their rental properties are allowed to write-off their rental expenses against their rental income. Any expenses that apply to tenant-occupied units can be used as an advantage.

• Lower management and maintenance costs. Occupying your own rental property minimizes property management and maintenance costs that are typically handled by third parties, thus saving a certain percentage of gross income.

• The value of depreciation. Depreciation allows an owner to deduct a portion of the building’s cost, plus the cost of capital improvements, annually ...continued on page 14

Upcoming Events for The New Year 02/08/2018

2018 FAIR HOUSING FAIR

Form of the Month Multiplex Exterior Care Addendum M205 OR The Multifamily NW Exterior Care Addendum is a form designed to address the many unique variables present in the exterior care of a rental home. Specific expectations are detailed concerning property landscaping, vehicles & driveway care, deck/patio maintenance, barbecue safety, trash protocol and more! This form is ideally signed along with the Rental Agreement and other essential move-in documents.

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Rental Housing Journal Metro · December 2017

President: Ron Garcia Vice President: Phil Owen President Elect: Mark Passannante Secretary: Lynne Whitney Treasurer: Sandra Landis

Ron Garcia, RHA Oregon President

Past President: John Sage Office Manager: Cari Pierce

President’s Message $50 Credit for Donating

by Ron Garcia

A

mid all of the Holiday inspired messaging, shopping and planning there is another common activity many people partake in during December: It is last minute tax planning.

Whether you have done so or not in the past, perhaps this year would be a good time to do it. I am talking particularly about every tax payers’ right to a $50 credit for donating to a Political Action Committee – commonly called a “PAC” What is a PAC? Encyclopedia Britannica offers the following definition: • Political action committee (PAC), in U.S. politics, an organization whose purpose is to raise and distribute campaign funds to candidates seeking political office. PACs are generally formed by corporations, labor unions, trade associations, or other organizations or individuals and channel the voluntary contributions they raise to candidates for elective offices, primarily in the U.S. House of Representatives and the U.S. Senate. PACs may also spend their funds on what are termed independent expenditures— defined in law as a message “expressly advocating the

election or defeat of a clearly identified candidate that is not made in cooperation, consultation, or concert with, or at the request or suggestion of, a candidate, a candidate’s authorized committee, or their agents, or a political party or its agents.”

I might add that the tax perk is just the beginning incentive to inspire citizens to participate. When a cause is near and dear to your heart (or financial concerns) many people choose to invest much more.

The financial limits are as follows according to OpenSecrets.org “PACs can give $5,000 to a candidate committee per election (primary, general or special).

They can also give up to $15,000 annually

to any national party committee, and $5,000 annually to any other PAC. PACs may receive up to $5,000 from any one individual, PAC or party committee per calendar year.”

There are 2 PACs that I know of (and have some affiliation with) that I would highly recommend to all of the members of the Rental Housing Alliance Oregon.

“The Good Landlord PAC” which can be found at: www.goodlandlordpac.com, and the“More Housing Now” PAC at: www.morehousingnow.org.

Why? There is no question that the conversations about the housing crisis

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

throughout Oregon in general and Portland in particular has gotten louder and more divisive. Unfortunately, many politicians are simply not hearing the concerns of property owners and are basing their decisions on the loudest voices in the room, which are often the radical tenant rights activists. Long standing policy practices (like the Tenant Landlord Coalition) have been jettisoned in favor of pushing radical new and financially difficult restrictions onto Oregon landlords in both the Portland City Council chambers and the Oregon State Legislature.

This year’s failed attempt to pass sweeping statewide rent control measures in the legislature (by a single vote) have done little more than embolden the political cause for sweeping changes going forward. Because of this I urge you to donate the largest amount of money you can to either or both of these PAC’s to represent your rights. It may be the best year-end financial investment strategy you can make.

Also, Happy Holidays!

Ron Garcia, RHA Oregon President •

Advertise in Rental Housing Journal Metro Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly.

Call 503-221-1260 for more info www.rentalhousingjournal.com

Rental Housing Journal Metro · December 2017

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Rental Housing Journal Metro

The Realities of Property Management

by Ann Chumg

M

any aspiring landlords believe that owning rental property is all about colleting rent without much hassle while their tenants take the utmost care of the property as their own, and the tenants will continue to occupy the property for long periods, generating an easy income for the landlord with very little effort.

Unfortunately, this scenario doesn’t describe reality. Often times, landlords encounter numerous unexpected issues.

Instead of rent being deposited directly into the landlord’s account every month, the landlord needs to deal with tenants who refuse to pay. Then there are latenight emergency calls alerting the landlord to the clogged toilet. And of course there is the daunting task of trying to keep the occupancy rate high at the market rental value.

According to industry statistics, landlords spend on average 5-6 hours a week managing a rental. While owning rental property can be a great source of additional income stream, it is also time-consuming and requires hands-on management responsibilities. Real estate investors usually have a busy schedule, and dealing with tenants takes away the time they could be spending to pursue more deals.

Fortunately, there is a solution. Hiring a highly trained property manager is a great way to make life easier for landlords and maximizes rents and income for the

landlords compared to the self-managed approach: • Property Managers know the landlord/tenant laws for each city, State and federal governments.

Property managers go through continuing education to keep up with the ever-changing laws.Keeping up with landlord/tenant laws can be timeconsuming if one is not doing it on a full-time basis. New regulations are constantly in effect, and staying out of trouble depends upon one’s compliance with these laws. Professional property managers are experienced and wellversed in these laws, and they make sure landlords stay on the right side of the law, keeping landlords out of trouble with the landlord/tenant laws.

• Property Managers will manage the property efficiently, professionally, and economically, freeing the landlord to do other important things.

• With a professional property manager, the landlord no longer needs to be the on-call maintenance person.

The property manager will perform routine maintenance, preventing small issues from getting out of control.

• Eviction is a process every landlord will face at some point. When tenants breach their lease agreement, the landlord must enforce the terms of the lease. Unfortunately, this is easier said than done. There is a tremendous amount of red tape surrounding the lawful eviction process. Experienced property managers are always on

the ball and able to handle evictions quickly, efficiently, and lawfully in compliance with State and federal regulations.

In summary, hiring an experienced and knowledgeable property manager makes life a lot easier. Owning rental properties can be a great investment. Managing rental properties through professional property managers will take some of the load off, freeing the investor to pursue more investment opportunities.

Ann Chung is the owner of Protocol Property Management, a firm dedicated to managing single-family homes in King County. For a free consultation, call (425) 753-0458.

•

Text REALESTATE-ROI to 44222 to receive a digital copy of this year's

Real Estate Opportunities in Investing (ROI)

Finding Investing Success in Today's Housing Market

6

Rental Housing Journal Metro · December 2017

Rental Housing Journal Metro

Do You Give Feedback People Can Actually Learn From? and a sample answer. Purposeful comparison to an exemplar, even if the learner doesn’t get feedback from you, can be helpful in getting things into longterm memory.

A missed question or imperfect assignment provides just the right opportunity to teach and correct any misconceptions the learner has. Don’t let these important moments go by!

Instead, use targeted, timely, explanation to improve performance and keep learners headed in the right direction.

by Ellen Clark

T

he Grace Hill training tip of the week focuses on providing feedback that is useful to your tenants, leasing agents and property managers.

Did you ever have a teacher who marked up your essays with feedback like, “unclear”, “poor word choice” or “watch your sentence structure”?

If so, you might remember feeling a bit helpless, wondering what the comments meant and what to do with them.

Comments like these may have given you some information about your performance, but did they really help you become a better writer?

When we are learning new things, it is important to get timely information about what we are doing right or wrong and why, along with information about how to improve. This is called feedback, and it is a critical component of improving learner performance.

written assignments or more complicated work products?

In these cases, ask learners to evaluate their responses against a scoring rubric

Ellen Clark is the Director of Assessment at Grace Hill. Her work has spanned the entire learner lifecycle, from elementary school through professional education. She spent over 10 years working with K12 Inc.’s net-

work of online charter schools - measuring learning, developing learning improvement plans using evidence-based strategies, and conducting learning studies. Later, at Kaplan Inc., she worked in the vocational education and job training divisions, improving online, blended and face-to-face training programs, and working directly with business leadership and trainers to improve learner outcomes and job performance. Ellen lives and works in Maryland, where she was born and raised.

About Grace Hill – For nearly two decades, Grace Hill has been developing best-in-class online training courseware and administration solely for the Property Management Industry, designed to help people, teams and companies improve performance and reduce risk

•

How can you create meaningful feedback for your learners?

Here are some tips!

"We want your feedback!" megaphone Using explanatory feedback is key to provide learners with guidance on how to move forward.

• In addition, to “correct” or “incorrect”, provide an explanation of why the response is correct or incorrect. Refer back to key points or examples from the training. Explanation is most useful when it provides learners with an understanding of where they are, and some guidance on how they can move forward.

• Be timely. Feedback is most effective when it is given immediately, rather than days or weeks after the learner responded to the question or submitted the assignment. An advantage of some online learning formats is that you can provide feedback immediately. If that’s not possible, just try to follow the rule, “the sooner, the better.”

• Display the question, response, and feedback together. Having to flip between the question and the feedback can add cognitive load to learning. If possible, position the feedback so that the learner can see the question, his or her response, and the feedback at the same time. This is most feasible when using online formats but think about this when providing feedback in other formats as well.

In a pinch, have learners generate their own feedback.

What if you don’t have the time or resources to provide explanation on Rental Housing Journal Metro · December 2017

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Rental Housing Journal Metro

Pet Proof ...continued from 1 2 - Bamboo is a good option if a warmer look is desired, as it is harder than most wooden flooring, making it not so vulnerable to scratches, and it is also not as permeable having less natural grooves.

3 - Polyurethane can be utilized to seal wooden floors if pursuing a complete floor makeover is out of the question.

4 - High-gloss, semi-gloss and satin paints result in hard, moisture-proof finishes that are preferable when it comes to preserving and protecting walls. These finishes create washable surfaces that are not vulnerable to stains and chips.

Affordable ways to pet proof your rental property If pursuing a complete property makeover is not feasible, encouraging tenants to pet-proof their living space is still possible and certainly adequate to avoid the likelihood of damages.

The ideas below describe affordable, easy and efficient ways to protect indoor spaces and promoting the safety of pets.

5 - Area rugs are ideal for making spaces look welcoming and cozy while avoiding risks associated with carpet flooring.

They add a personal touch to pet-resistant flooring, while also being easy to replace as needed.

6 - Outdoor rugs can be utilized indoors as they are naturally more durable and designed for easy cleanup. They are available in many different patterns and shapes that can suit most indoor spaces.

7 - Shelves and wall hangings allow decorative pieces, houseplants and more delicate items to be displayed while being out of reach of curious pets. Taking into

account how far off the ground pets can reach is fundamental to make sure that anything sharp, valuable or toxic is safely stored, and shelving helps with utilizing height as a practical advantage.

8 - Thick, heavy blinds are preferable to fabric curtains and flimsy plastic shades. Dragging fabric, noisy blinds and hanging cords invite biting and pulling, which is why shorter draw strings and heavier materials are a safer option.

9 - Plexiglass and lucite panels are inexpensive and can be affixed to doors and windows to add a layer of protection from scratches.

10 - Non-textured furnishings minimizes the scratching and biting appeal that most texturized materials have for pets.

11- Metal, plastics and resin furnishings are sleek and thus less stimulating than wool, leather, and other coarse surfaces that make for inviting scratch and bite posts.

12 - Microfiber and heavy, tightlywoven fabrics are most resistant to tear and wear, which is important to consider when choosing linens, couches, armchairs and similar home decor.

13 - Baby gates can be used to separate pet-friendly spaces from other areas, especially those prone to housing products that are not safe for pets or displaying more delicate furnishings or flooring. •

Keepe is an on-demand maintenance solution for property managers and independent landlords. Keepe provides a network of trusted independent contractors and handymen who are available for maintenance

projects in the Greater Seattle Area, Greater Phoenix area, San Francisco Bay area, and soon to an area near you. Learn more about Keepe at http://www.keepe.com

Text REALESTATE-ROI to 44222 Receive a digital copy of this year's

Real Estate Opportunities in Investing (ROI) Finding Investing Success in Today's Housing Market

8

Rental Housing Journal Metro ¡ December 2017

Rental Housing Journal Metro

Winterizing Your Investment Property for Colder Temperatures

by Sulema Vela, Southern Division Pro Director, The Home Depot

clean, high quality light that fills up large rooms. It uses 85 percent less energy than incandescent bulbs and lasts more than 20 years, which means you don’t need to worry about tenants climbing ladders to replace the lights.

I

t’s the most wonderful time of the year... if you’re properly prepared.

Cold temperatures are here, and winterizing and preparing your property now will ensure a comfortable and efficient home environment. Here are five strategies to prepare properties for winter weather.

Don’t Wait, Insulate While attics can be draft conductors, they also are among the easiest areas to reinforce. The simple addition of extra insulation can improve heat retention and localize incoming air blasts. If applied properly, proper insulation can reduce energy costs and serve as a selling point.

Modern insulation also can deliver benefits beyond temperature management. At The Home Depot our merchants and Owen Corning worked together to develop a new product called Pure Safety insulation. Pure Safety insulation maintains healthy air quality in your home and is certified asthma & allergy friendly by the Asthma and Allergy Foundation of America. It’s fire resistant and can provide valuable extra minutes in the event of a fire. It also reduces noise to help you sleep better by absorbing and reducing noise levels across a broad range of sound frequencies. You can only find it at The Home Depot.

Mind the Gaps Drafts may not seem like a big deal, but the average home has enough air leakage that it adds up to a two-foot square hole, according to the Department of Energy.

From the onset of acquiring a house, investors should inspect doors, windows and siding for gaps and holes that allow cold air into the space. If areas need repair, foam sealants, weather strips and caulk offer low-hassle, low-cost solutions that will prove their value almost immediately.

While preparing for cooler temperatures, remember to assess the plumbing. Pipe maintenance takes greater priority during the winter, as leaking and

Rental Housing Journal Metro · December 2017

freezing both elevate the risk of bursts and potential water damage. Evaluate pipes for cracks or disconnects before winter arrives to reduce the likelihood of a costly repair.

Light the Way With the days getting shorter and the nights getting longer, lighting is an often overlooked area for energy savings. Many investors and tenants have been hesitant to switch to LED bulbs because they didn’t like the quality of the light.

At The Home Depot, we worked with Cree to develop the new 75-Watt replacement LED R20, which is one of the brightest bulbs available and delivers a

Tools for Success Ice and snow accumulation can become a safety risk. Instead of waiting for a weather event, stock up on salt, ice melt and tools now while the demand is less urgent. Stowing these items away keeps an adequate supply on hand to address challenges and helps deter tenants from venturing out in potentially unsafe conditions.

The fall months also are a great time to check the performance of shovels, snow blowers and other removal equipment.

If these tools are outdated, consider upgrading to a powerful alternative that clears space quickly without disturbing neighbors, such as EGO’s 56 Volt Snow Blower. This blower uses a lithium-ion battery to deliver the power of gas without the noise and mess.

Heat Smarter Smart thermostats - a cool way to stay warm.

Smart thermostats not only reduce the toll on HVAC systems, they also give homes a contemporary feel to entice potential buyers or renters. Options like the ecobee4 adjust the temperature ...continued on page 17

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Rental Housing Journal Metro

Renting to Roommates

R

ecently it seems I have seen an increase in the number of landlords coming to me with problems involving roommate tenants.

Most of their complications could have been avoided had the landlord made the rental agreement and addenda clear up front.

Some roommate situations involve the landlord renting the entire unit to multiple parties in a joint tenancy. Others involve the landlord renting out individual rooms in a unit to two or more parties. Both approaches require different attention in the contract and the former should always start with a roommate addenda that explains from day one what will happen with the deposit. This is necessary because roommates frequently move out and/or get switched to a new party. Many landlords fail to anticipate and plan for the musical roommate events.

In the case of the joint tenancy situation the addenda, such as the one offered by WLA, can contain several options to choose from regarding how to disposition the deposit. It may be that the tenants have split the deposit or they may not have. The landlord should insure this does not become a problem for the landlord should one or more leave and one or more remain. I recommend the landlord use the addenda option that makes it clear that the entire deposit stays with the landlord until the last tenant vacates and surrender

10

possession. I also recommend that the landlord specify that any refund will be written to all tenants collectively and not make it possible to get into a position between multiple former tenants arguing over how the refund should be split. The landlord should further consider what happens if one or more roommate gets replaced at some point with another. Did the new tenant(s) contribute anything to the deposit when coming in? In most cases not, so make it clear in an addenda that the deposit goes back to the original tenants at the end should there be a refund. If the landlord does allow a part

of the deposit to be returned to tenants departing early then have a contract or addenda that gives the landlord the right to demand the rest of the deposit be replaced by remaining tenant(s).

Another aspect to consider is what damages an early departing roommate may be responsible for. If the landlord is going to hold the entire deposit until the last roommate finally vacates then having the departing roommate(s) replaced by one or more new roommates could create an additional problem that can be resolved up front in the rental agreement and addenda. Is the landlord going to do a mid-

tenancy walk through to document what damage exists at the time the roommate departs? If so the landlord may then have to determine what portion of any charges or refund goes to the departing tenant(s) at that time. This could get messy but not doing so can also leave a tenant that departed early responsible for damages done by the remaining or replacement roommates in the landlords eyes but it is not likely that the tenants that departed early are going to agree with or appreciate that. The landlord might consider a requirement that a walk though and damage disposition be done at the time of departure and then require the remaining and/or replacement roommates tender a new deposit with that new walk through functioning as both the final walk through for the departing tenants and also the initial walk through for those remaining.

The landlord should be aware that if an eviction becomes necessary in a joint tenancy there will be problems evicting less that all of the roommate tenants.

While it is not difficult to do so in legal proceedings it is not likely that the sheriff will be comfortable actually executing the eviction because there is potential liability if the sheriff gets into a position where they pick what personal property stays and what gets put out on the street.

Because of this it is not, in my opinion, a ...continued on page 19

Rental Housing Journal Metro ¡ December 2017

Rental Housing Journal Metro

New Tax Laws ...continued from 1 • For some loans no prepayments are permitted, either partially or in full.

This is often the case with large or securitized loans.

• It is not unusual with new financing or refinancing to be faced with prepayments for the first five or 10 years of a loan, or to be prohibited from paying off more than 20% of a loan in any one year.

• In other cases, the loan can be prepaid - but only if the new borrower either assumes the existing loan or pays a 1% prepayment penalty to assume the existing loan.

• Wrapping your loan around an existing loan is typically discouraged with major penalties, by the lender that is in first place.

• Most banks will not charge a penalty if the prepayment is less than 10% of the original principal. This obviously does not apply if you sell your property.

• The loan can be prepaid, but a

penalty and is charged, especially if the loan is being fully prepaid prior to maturity.

• Finally, some loans have no pre-payment penalties at all. An Adjustable Rate Mortgage (ARM) might be free of any prepayment penalties.

Prepayment penalties come in many flavors. For example: • A financial institution might charge a set fee like $2,000, this is assessed no matter what the remaining size or term of the loan. In most cases this is minor and primarily reimburses the bank for expenses related to the release of collateral on the loan and terminates the borrower’s obligation.

• A bank might also charge a set percentage like 1% of the loan amount, depending on the size of the loan.

• It is not unusual to see a stepped percentage formula for commercial loans that varies with time. For example, with a 10 year loan, you might see descend-

Rental Housing Journal Metro · December 2017

ing percentage penalties for each year of the loan. Such as: 10,9,8,7,6,5,4,3,2,1 or 5,4,3,2,1- 5,4,3,2,1 or on shorter term loans include 5-4-3-2-1 or 3-3-32-2-1, where in the first example 5% of the remaining balance is the penalty if the loan is prepaid during the first year of its life, 4% in the second year, 3% in the third year, etc. This recognizes that the longer the remaining term of the loan the more value it likely has to the bank.

• Commercial Mortgage Backed Securities – (CMBS) loans typically have yield maintenance clauses, these are very expensive and very hard to offset, though they can be assumed at a substantial cost and with huge attorney fees. Since these loans are sold in tranches on the stock market (hence mortgage backed security) and a yield has been promised to the investors the yield must be maintained when a loan is assumed or replaced. Usually they offer two options to deal with an existing loan: 1. Defiance involves the substitution of government securities for the mortgage collateral. A borrower wishing to obtain a release of his/ her property from the trust may purchase and pledge to the trust a collection of government securities that are specifically selected to generate sufficient cash to make all monthly payments due on the loan through and including any balloon payment due at maturity.

2. Prepayment penalties consist of the payment of a sum of money designed to compensate investors for the loss of yield (often referred

to as ‘yield maintenance.’) Yield maintenance is a present value calculation that enables investors to reinvest the loan payoff proceeds at then current treasury yields through the original loan maturity and maintain the same yield as if the loan had not paid off early. https://precisionlender.com/blog/ general/yield-maintenance-oncommercial-loans/ Conclusion As you choose your loan, and balance between the decisions of loan cost, cash flow, and interest rate - consider the importance of the prepayment penalty in your decision making. For the financial institutions the most important issue is the yield on the loan.

Some banks will hold the loan in their own portfolio, or alternately sell the loan, but - if they sell the loan they have less flexibility to negotiate. A mortgage broker can help you compare your options carefully. In my experience, financial institutions may be willing to change the prepayment penalties if you agree to pay an extra eighth of a percentage point in interest rate. All you have to do is ask.

Bottom line, do what you can to keep your prepayments small and keep your investment strategies flexible as you build your investment portfolio.

Cliff Hockley, President Bluestone and Hockley Real Estate Services Executive Director SVN | Bluestone and Hockley

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Rental Housing Journal Metro

Cash Flow from Car Charging

by Peter Vierthaler

lower priced Nissan Leaf with a range of 150 miles. This puts electric vehicles within reach of most middle class buyers and each of these buyers will need charging. 13 new entries of plug in cars just this year put electric vehicles in the price range for a much higher percentage of your tenants. Market penetration is increasing rapidly. Tesla is ramping up production and has over 500,000 reservations, the Chevy Bolt is selling at 1150 per month and the Leaf about 1200 per month. Plug-in and electric cars are expected to increase market share from 3% to 15% in just a few years.

Pollution and environmental concerns have the largest economies in the world investing in electric vehicles. Be prepared for those tenants looking for the convenience and value in having car charging stations available near their residence. The demand is coming.

The winners will be those that control infrastructure cost through adaptive power implementation, add value to their buildings, and are prepared for the next generation of car buyers.

I

f you own an apartment building with parking spaces, you have just struck oil.

New technology creates significantly more electric capacity to charge cars in your garage or lot.

Car charging is a new source of revenue.

Parking spaces with car chargers rent for up to $50 more per stall. Early adopters of car charging will realize more income and less vacancy. The cost of electricity can be billed back to the tenants.

Electric and chargeable hybrid cars are a rising share of the automobile market.

Are you ready for them and the power that they will need to charge? Have you received inquiries yet from tenants looking to charge cars? If not, you soon will.

Adding capacity for car charging can be expensive, ranging from $30,000 to $100,000 depending on a number of variables: the size of your building, location of the electric strike, size of the main feed conduit, size of the electric room and the number of chargers wanted.

With adaptive power allocation, you don’t need to bring in additional power. Your existing capacity is all you need. .

Adaptive power allocation means redirecting the available unused tenant electric capacity to car chargers. It redirects power instantaneously to and from chargers as available. If a stove is off that power can be used to charge cars.

This was never possible before. Suddenly every building has capacity to charge five,

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ten, twenty or partially charge up to a 100 vehicles using existing power.

Drivers simply enter their car type, miles desired, and time of departure.

The load management controller in conjunction with smart chargers does the rest. This comprehensive system bills vehicle owners for consumed power, it then notifies via a user’s smartphone the

end of a charging session. For planning purposes, a tenants charging history is used to predict future charging requirements.

The price of extended range electric vehicles (over 200 miles on a charge) has now come down to $35,000. For a $35,000 base price a driver can buy a Chevy Bolt or a Tesla 3. For $25,000 they can buy the

Peter Vierthaler has been a multifamily real estate developer for 30 years, with a focus on apartment repositioning.

He has taken a strong interest in clean technology and how it can be applied to the multifamily industry. Peter can be reached at peter@northwestpartnersllc. com or at 206-498-4708.

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Rental Housing Journal Metro · December 2017

Rental Housing Journal Metro

7 Reasons ..continued from page 9

DEAR MAINTENANCE MEN:

By Jerry L’Ecuyer & Frank Alvarez

Water and Wax Removal

Dear Maintenance Men: I have a bathroom sink that is slow draining. I have already snaked the drain and found no stoppage. When I remove the pop-up assembly and have an open drain, water whooshes down with no problem.

However, with the pop-up in place, water backs up into the sink and drains very slowly.

Paul Dear Paul: Most bathroom sinks have an overflow hole near the top edge of the sink. This hole serves two purposes; 1: Acts as a safety drain to keep the sink from overflowing should the water rise above a certain level in the sink. 2: The overflow hole also serves as an air vent for the sink when the water levels are above the popup plug. The overflow hole allows air to escape through the drain and the water to evacuate more efficiently.

What has happened is hair, toothpaste, grime etc. have built-up and sealed off the overflow drain where it exits just below the pop-up assembly plug. Most snakes are too big to go through the overflow

drain. Alternatively, a speedometer cable will work great or even a long zip tie will work. Push the cable or zip tie down through the overflow hole at the top of the sink and push any gunk out into the drain.

Use water to help push the debris out the overflow drain, a funnel works great to direct a good flow of water. If you cannot get the overflow to drain, disassemble the main drain assembly to gain access to the overflow drain exit. Once the overflow drain has good airflow, the sink should drain a bit faster. If this does not solve the problem completely, look at restricting the water flow coming out of the faucet.

Rental Housing Journal Metro ¡ December 2017

Use a restrictive aerator to cut down on the GPM of the faucet.

Dear Maintenance Men: My property has 100-gallon gas fired water heating that serves four units. It is about 8 years old. The tenants are complaining of very little hot water. I have checked the tank and the thermostat is working, the water is hot. Are my residents making up stories? What am I missing?

Thorne Dear Thorne:

The water heater may need a bit of maintenance. The first thing to do is clean out the sediment at the bottom of the tank. This will require a shutdown of the heater for a couple of hours and some hands and knees work. Most 100-gallon gas water heaters have a clean-out port at the front of the tank. The port is either round or oval. Be sure to get a new cleanout port gasket before starting this job.

Once the water is drained and the port opened, remove all the sediment from the tank. You can expect to haul out one to two buckets of calcium buildup.

(Sediment removal should be done once a year.) Removing the sediment will greatly improve the heating efficiency the water heater. Because of the age of the tank; while you have the port open, check the inlet dip tube and the anode rod inside the tank. If the anode rod is corroded, replace it by pulling it out from the top of the tank and inserting a new one. The anode rod is a sacrificial zinc rod that helps keep the tank from corroding. The second item to check is the cold-water inlet dip tube. Cold water entering the heater is routed to the bottom of the tank

...continued on page 14

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Rental Housing Journal Metro

Get Started in... Investing ...continued from 4 from the income of the building. While it is allowed only for the portion of the building used for rental purposes, it can sometimes shield rental income from taxation.

• The tax advantages. Along with depreciation tax, owners who live in their rental buildings can deduct the prorated part of the mortgage interest from their income. Property taxes can also be deducted.

• Selling the property. Owner-occupied housing is also shielded from property gains taxes (at certain limits) when sold, and those that have been lived in for certain time periods – usually more than a year – are subject to lower capital gains taxes than other investments.

Through a tax-deferred exchange, owners who rent where they reside can combine both tax advantages and also defer gains on the sale of the property when they purchase another property within a limited time frame.

• Finally, owner occupied properties are exempt from certificate of occupancy and most rent control programs, therefore, the owner is not required to make certain repairs and improvements that these programs require of property that is used strictly for income producing purposes.

Michael Blank writes that he thinks duplexes are a great way to start. “Many real estate entrepreneurs who want to get into multifamily investing are frustrated by how long it can take to do their first deal. It takes a while to educate yourself, learn how to analyze deals, and to raise money. You have to be consistent with contacting brokers and generating deal

flow. And you have to make as many offers as possible,” Vinney’s duplex purchase I want to share with you a story of a duplex that came across my desk in our early years of investing.

It was in an emerging market and it only was selling for $119,000. With just 20% down we bought it with mortgage of $648 a month. Since it was in an emerging market with good rental demand, each unit rented for $1, 100 a month. It was a huge cash flow machine. I wish I would have found a fourplex!

My mantra is go for more number of units. Live in one and rent the other three and you live rent free.

Even though we purchased a lot of single-family homes early on, in many cases the cash flows were just not that good, especially when the tenant left and it would be 100% vacant. Plus there was the expense of getting it ready for the next tenant etc.

Your vision for owner occupied multifamily investing Once an investor has a clear vision of what they’re looking for in owner occupied multifamily investing, the next part is to go out and find it.

Unlike the investment days of old, technology today has granted investors an invaluable resource that provides upto-date and highly detailed information with the click of a button online.

The majority of today’s research for real estate investment is accomplished using the Internet, with investors taking full advantage of these online super tools. It should be noted that an investor’s due diligence when investing in multifamily

properties shouldn’t conclude with online research only, but rather serve as the prelude in the research process.

Your best bet is to find a property that the owner has great interest in selling, whether because of moving, divorce or frustration with tenants.

Actually, if you are currently renting and thinking about using this technique perhaps your landlord would be happy to help you out! There are a few variations that can be used depending on you and your seller. Do they want the market price or are they just eager to get out from the monthly payments – perhaps facing foreclosure? Ask for owner financing rather than going through the loan qualification process. You can also approach the seller with a master lease option.

The simplest method is to take over their mortgage payments – called ‘assuming’ the mortgage. Although these loans are rare these days, some lenders still offer assumable loans. You will need to be approved by the original lender to assume the mortgage. If you cannot get approved for an assumable mortgage you may also try a ‘subject to’ assumption where you merely make payments while the property remains in the seller’s name.

You take over the original mortgage and create a second mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short period of time – two or three years.

Why I preach to all?

Please leap forward to multifamily as soon as you can!

Move from fourplexes to eightplexes to 20 units and 50 units and then 100 units.

It’s just one transaction with some extra zeros. The rewards are many: • Economies of scale • Ease of management • One transaction • Easy maintenance • Depreciation benefits • More consistent cash flows • Value add to increase revenue and NOI

• Equity gains While purchasing a multifamily unit may seem more costly up front, it is surprisingly easier to finance. Why? Because multifamily properties generate significant cash flow on a consistent basis.

When banks see this, they are more willing to provide a loan. This is great news for investors because there is less risk involved with the investment. If one tenant leaves your multifamily property, finding a replacement becomes far less urgent. If your tenants decide to vacate your single-family unit, you won’t earn passive income until a new tenant is found.

Another reason to invest in multifamily properties is because it becomes financially sensible to utilize a property management company. This means, as an investor, you don’t have to deal with day to day operations of your rental.

You can sit back, relax, and watch your passive income checks roll into your bank account.

Vinney Chopra is the Founder and CEO of Moneil Investment Group and President of Ideal Investments Group. His latest accomplishments include acquiring 12 multifamily assets in the last 28 months, worth $132 million. His last two syndications were sold out in just a few hours, and one in 36 hours raising $4.7 million and another one $6 million in eight hours. Between the two syndication companies he founded, Vinney’s team is controlling over $200 million worth of assets.

He is a mechanical engineer. After entering USA with $7, he graduated from The George Washington University with Master’s in Business Administration in Marketing, he shifted his focus to marketing and motivation. He was a professional fundraising consultant and motivational speaker for more than 35 years with a wonderful private company.

Vinney and his wife started their real estate investments in 1983. He currently owns single-family homes and multifamily units in Texas, California, Atlanta, Arizona and India.

Many times, people call him “Mr. Enthusiasm” or “Mr. Smiles.” He likes to bring great value to everyone he comes in touch with.

•

Dear Maintenance Men ...continued from 13

14

by the dip tube. If the tube is corroded, broken or missing, the tank will develop hot and cold areas, leading to complaints about short-term hot water. The dip tube is located inside the cold-water inlet pipe.

Replacements for both the anode rod and dip tube can be found at most plumbing supply houses.

Dear Maintenance Men: How do I remove candle wax or gum from my rental unit’s carpet?

Janet

Dryel or any dry fabric cleaner and in a pinch; lighter fluid.) Also, blotting with a mild detergent mixed with warm water may work. Make sure the detergent does not contain any alkaline or bleaches.

Remove gum by either freezing the gum and removing it by pieces or using peanut butter to loosen the gum’s grip on the carpet. A product known as “Goo-Gone”, found at Home Depot, may be used to remove gum, tar, grease and glue. Use Goo-Gone sparingly

Dear Janet: The best way to remove candle wax from a carpet is to use a hand held clothes iron. Put an absorbent paper towel over the wax and heat the area with a hot iron.

The paper towel will absorb the wax as it melts. Be careful not to burn the carpet as an iron can melt certain carpet fibers and scorch others. Start on the lowest setting.

Remove any left over stain by blotting the area with a small amount of dry-cleaning solvent. (Dry-cleaning brand names to look for: Guardsman Dry Cleaning fluid, Woolite Dry Cleaning Secret,

If you need maintenance work or consultation for your building or project, please feel free to contact us. Jerry L'Ecuyer is a licensed contractor & real estate broker. He is currently on the Board of Directors and Chairman of the Education Committee of the Apartment Association of Orange County. Jerry has been involved with apartments as a professional since 1988. Frank Alvarez is the Operations Director and co-owner of Buffalo Maintenance, Inc. He has been involved with apartment maintenance & construction for over 20 years. He is also a lecturer & educational instructor. Frank can be reached at (714) 956-8371 Frankie@BuffaloMaintenance.com For more info please go to: www.BuffaloMaintenance.com •

Rental Housing Journal Metro · December 2017

Rental Housing Journal Metro

L

Portland Landlord Facing Re-election and Tenant Uprising

ong-time Portland state Senator Rod Monroe is both a politician and a landlord, and lately those two jobs have found him in the middle of conflict.

First, Monroe (D-East Portland) has drawn a Democratic Party challenger from the left over his position on the rent control bill, HB 2004. Former state representative Shemia Fagan said Monroe’s refusal to back the bill shows he has been "incredibly tone-deaf" on housing issues and said the district needs a "more responsive" senator, according to a story in Oregonlive.com.

HB 2004 passed the house, but failed in the Senate. It would have lifted Oregon's statewide ban on rent control and restricted landlords who wish to evict tenants without cause.

Second, Portland Tenants United on their Facebook page are also taking on Monroe, “State Senator Rod Monroe is a #ProblemLandlord, single-

handedly killing renter protections in Salem while making his tenants live in dangerous conditions. But he can't stop #TenantPower: it's created a progressive challenger in the Democratic primary (link in the comments), and now #TenantPower will force him to answer his tenants' demands to live in dignity.”

he told Willamette Week. "[Portland Tenants United] are generally regarded as one of the more radical of the tenants' rights groups—and that's fine. But I think it's so much better for good legislation if landlord groups and tenant groups work together."

Since the conflict began, Monroe has been sued by a tenant, seen the city's most aggressive Landlord unfairly tenants union organize singled out on his property, and Monroe, who owns 51 gained two serious units of Red Rose Manor Senator Rod Monroe challengers in the 2018 along Northeast Glisan Democratic primary.

Street at the eastern Most Democratic incumbents never see edge of Portland. says he's been unfairly one, according to reports. singled out for opposing a ban on nocause evictions and the loosening of rules on rent control, according to reports.

"I felt like it was bad public policy,"

Rental Housing Journal Metro · December 2017

Group vows to replace Monroe "We don't see any real renters' rights legislation passing until we replace

Monroe with someone who supports working families," Hannah Howell, a Portland Tenants United organizer, told Willamette Week. "The makeup of the Senate hasn't changed in the past five months—votes will be coming from the same anti-tenant lawmakers taking money from the same anti-tenant lobbyists."

"These are the types of pressure tactics that I have grown to expect from [PTU]," landlord attorney John DiLorenzo told the newspaper. "It's disappointing that anyone would seek to impose economic pressure on a member of the Legislature because they disagree with his voting record."

In August, Areli Lopez sued Monroe and the property management company he hires to run the complex, C&R Real Estate Services, alleging that in December 2015 a neglected leaky roof caused her to slip and fall, injuring her back, knee and

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Rental Housing Journal Metro

Sexual Harassment Training ...continued from 2 sexual harassment today, I want to make sure that I'm really on the right side of the law," can go do that right now, and start practicing, and feel equipped to be successful on site,” Armstrong said.

The Justice Department initiative “specifically seeks to increase the Department’s efforts to protect women from harassment by landlords, property managers, maintenance workers, security guards, and other employees and representatives of rental property owners,” according to a release.

Do people understand Fair Housing covers sexual harassment?

“I think that when they hear that it's a law in general, they tune out,” Armstrong said. “When in reality, fair housing, and sexual harassment, and on-site discrimination, really at the end of the day, it's a very simple idea.

“The idea is that every prospect, every employee, every resident, should feel welcome on-site, and should feel comfortable. Once you understand some of the core principles of the law, which is what our courses teach, then it makes a lot more sense that fair housing would cover sexual harassment,” she said.

Leasing agents can be on the front line with potential tenants “Often you're trying to do your job.

You're trying to be successful at your job, and yet you're in an uncomfortable situation, and the question is, how do you handle that?

“The reason why it's so important that we made sexual harassment training available to our industry, is you want everyone to go on-site ready to do their job, armed and prepared, and not have to worry about: • What are the sexual harassment laws?

• What are the fair housing laws?

• How do I handle these situations?

One of the things that we work really closely with our clients on, is putting their own course ware in the system that goes even further.

“Policies and procedures are really important when it comes to something like that, and so I think any time a client asks me, "How can I really manage my risk?" I say, "Well number one, you gotta train people on an annual basis, on all the core compliance topics, so that they're ready, willing, and prepared to perform, but number two, you guys need really great policies, and procedures in training

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on those, to make sure that your team members know at your company, how to navigate that." That's something else that we talk a lot about with our clients.”

Launching a California-specific sexual harassment course “This month we are relaunching our California specific sexual harassment course, so all of our corporate clients have access to that. I think one of the interesting things, is California really does have almost a higher standard.

And that's important, because we know how large California is, and how many apartment communities are in California.

“One thing that's critical is, that everyone in this industry - if they are on properties in California or have properties in California - that they are also adhering to those laws because there are additional requirements specific to California sexual harassment laws. For example, one of the core areas is, you need to have a designated person at your company that people can ask California sexual harassment questions of.

“We've found that our clients really like combining our online course ware with some of our features, so that they can designate specific people in the system to respond to that specific requirement.

It takes some of that burden off of them.

It is important that everyone realize that they're not just federal laws, but also state laws, that they need to be in adherence with.

“We are hosting a webinar in midDecember on the big California sexual harassment update that's coming out, and some of the ways that the law has changed,” she said.

What type of sexual harassment happens most often in multifamily?

“We have so many leasing consultants that come into our industry. They find themselves on a career path, which is one of the things that I love most about this industry.

“This is often the first time someone is working in our industry on a property.

Trying to navigate how to manage residents, how to manage prospects, and trying to understand how to navigate all those situations, can be very challenging.

“What we hear most often from our clients is, ‘How do we successfully onboard people into these roles, so that on day one they get it, and really understand how it works in housing and that they can actually apply it. That they can handle a potentially gray area when it comes to

sexual harassment or to disability.”

“One of the things that we work really hard on is translating complicated laws into short compliance courses that are interactive. Grace Hill’s interactive courses allow people to apply the laws that they've learned, and then feel empowered to go out on site and be successful and navigate any of these situations that are not necessarily intuitive. It's very much, ‘How do we quickly get people up to speed on all of the different regulations?’ I think in particular fair housing, and obviously sexual harassment is part of that.

“California, in my tenure at Grace Hill, has had a number of major changes.

And so for us, not only do we stay on top of the federal law, but we spend a lot of time thinking about California, because we have many clients with communities there, and we have many learners on-site there. We want to make sure that they are able to follow those laws, and that our broader learning platform helps them from an operational side, manage some of those requirements.

“For example, they're able to take our California sexual harassment course, and build their own version of it, where they designate who their corporate representative is that should receive all the sexual harassment questions, and actually

receive that through the platform, right?

We try to give them not just a technology solution from really great online training materials, but a way to manage staying in compliance with those laws as well.”

Grace Hill is the market leader in compliance, and specifically sexual harassment training for the property management industry, is responsible for helping learners have the tools that they need in order to navigate the sexual harassment laws. We're very focused on ultimately helping employers, and employees create an ethical culture, and a welcoming workplace, and I think one of the key ways that you do that, is by empowering your employees with knowledge, and understanding of what those laws are, and how to act appropriately in situation, which is exactly what our courses do.

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Rental Housing Journal Metro · December 2017

Rental Housing Journal Metro

Portland Landlord Facing Re-election ...continued from 15

shoulder.

Lawsuit against landlord politically motivated Monroe believes the lawsuit is politically motivated. "There's no doubt about it," he told the newspaper. "If I were not running for re-election, this would not have happened."

In late October, Monroe and his insurance company filed a countersuit

Winterizing ...continued from 9

against Lopez's longtime boyfriend, with whom she shares an apartment. The suit against Jose Ramirez blames him for the puddle that formed on the apartment's floor, saying he should have mopped it up.

It also calls Lopez a "trespasser" because her name was not on the lease.

based on occupancy trends. They also synchronize their smartphones to watch and adjust temperature settings from any location, and the ecobee includes built-in Amazon Alexa voice service. This added control will help reduce heating bills and allow you to monitor the temperature remotely.

It’s important to do inspections on your investments regularly. Check for leaks, cracks or insulation problems now, because once winter weather arrives, property maintenance can be challenging and expensive to fix.

Sulema Vela is responsible for the Pro business in The Home Depot’s Southern Division, leading a team of more than 80 Pro Account Representatives in an area that encompasses 700 stores across 13 states. She has more than 18 years of experience at The Home Depot, starting in 1999 as a part-time cashier while she earned her Bachelor’s degree in business administration. During her time at The Home Depot, Sulema has served in a variety of roles and capacities – including department supervisor, assistant store manager, store manager and district manager.

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Rental Housing Journal Metro · December 2017

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Rental Housing Journal Metro

4 Roof Preventive Maintenance Steps You Should Take Before Winter

by Eric Skoog

B

efore the weather gets worse, here are four roof preventive maintenance steps from a roofing expert you should take as a landlord or property manager to get your rental housing or apartments ready.

1. Gutters and downspouts These are areas of specific concern whether in areas of snow and ice or heavy rain. Any structure that has gutters and downspouts should have those two areas checked.

Leaves, debris, children throwing balls up on the roof - any of these can plug up gutters and downspouts. When that happens you have improper drainage.

With improper drainage, there is a greater chance for water to back up beneath the roof system. Also remember you tend to get ice damming along eaves in cold country, and this can be minimized with proper drainage and installation of electric tape.

Gutters and downspouts are your most important roof preventive maintenancerelated item to check every fall. Make sure gutters and downspouts are open and clean.

2. Clean out roof valleys The second area for roof preventive maintenance I would look at would be the valleys on pitched roofs.

Especially with tile and shake roofs, valleys tend to get filled up with debris.

A valley is a junction where two slopes of a roof meet and water drains from the roof down that junction. If there's any debris in the valley, water tends to be diverted sideways beneath the roof's surface. When water gets under slate, shake, tile, or even shingle, it travels until it finds a drainage point, which might be a nail hole or some other minor penetration where it can get in and cause quite a bit of damage.

So number two would be clean out the valleys.

3. Look around any roof penetrations The third area in roof preventive maintenance I would think about would be any penetration in the roof.

You have roof penetrations for kitchen and bathroom exhaust fans, soil stacks, and perhaps even roof-mounted air conditioning units or evaporative coolers..

Anything that penetrates through the roof has the potential to leak because you're breaking the roof system. You want to check around those penetrations to make sure that the roof sealant or any gaskets are in good shape, re-sealing or replacing as needed.

4. Check around parapets

An additional area for roof preventive maintenance that I would consider a concern is parapets.

Whether on a flat roof, surrounding a flat roof, or on a pitched roof where a wall runs into that roof and terminates you have the potential for leaking. The termination with the pitched roof or surrounding the flat roof may be an issue, but it might also be that the parapet could have gaps or cracking in it which provide ways for water to get into the system and travel.

A parapet is a wall that is built up higher than a roof level and surrounding a roof level. On a flat roof, you could walk on the roof and see the wall around the roof. Or, you might have a parapet that terminates into a pitched roof such as shingle, tile or metal.

Parapets generally go around flat roofs and many buildings have both flat roofs and pitched roofs for architectural or aesthetic effect as well to reduce construction costs. Anytime you have a wall that's running around a roof or terminating into a pitched roof you have a potential for leaks. So those parapets need to be checked just to make sure there isn't any cracking or material that's come off the walls leaving gaps where water can get in or ice or snow. Wherever the wall terminates and meets with the roof's surface it needs to be checked to make sure that there's no break in the roof's surface.

Those would be the four primary routine roof preventive maintenance items that I would check with any roof every fall and it really doesn't take that much time to do it.

Evaluate the age of your roof The other significant factor with any roof system is age.

With age comes exposure to the sun, to the weather, and over time no matter how good a roof system you have or how good

roof preventive maintenance you have, it's going to break down.

The unfortunate part with any pitched roof system whether shingle, shake, slate, or metal, there isn't any material that we can apply over that roof system to extend the life of it. What we have to do with those roof systems is lift them and replace them or at least replace the underlayment.

The underlayment typically used for this purpose is known as #30 felt. With more recent development of synthetic underlayments and rubberized products, which hold up quite well over time with exposure to heat, and cold, and water, there are alternatives to felt underlayments.

From right to left, Lt. Tim Ferracci, Chief Explosive Ordnance Disposal Jeff Reinhofer, and Constructionman Apprentice Nicole Ramnes remove shingles from the roof of the home of an Iraq war veteran's widow's home. Photo by Kelly E. Barnes.

How do you know when I roof is too old to fix anymore?

I will give you couple of examples. If you take your standard shingle roof, for the first five to ten years you really should have little or no maintenance with a shingle roof.

Starting at about year ten you probably are going to want to reseal around all the penetrations, and then as time goes on maybe about year 15 you're going to start noticing around the perimeter of the building, or if you have gutters or downspouts you're going to start noticing in the gutters or at the base of the downspouts, evidence of granules.

Those granules are the surface of the

shingle roof starting to come off, and as they deteriorate with age the shingles will lose more granules. That's your indication that something's happening.

Next, with a shingle roof you'll start to see the shingles start to curl. That's a sign of age. Or if you walk on the shingle roof you'll notice that they're starting to crack because they're getting brittle. That's an indication to you that you need to start seriously considering when you're going to replace that roof.

It's a little more difficult with a metal roof, or slate, or shake, or tile because you can't see the underlayment. With wood shake, you start to notice over time that the shakes are getting brittle and flying off the roof. They turn from the bright shiny yellowish tan to a dark gray dull looking product as they age, and ultimately they get brittle. You'll see your roof starting to look kind of ragged, shakes may start to warp and curl up, there may be gaps due to missing shakes. That's a clue to you that there's a problem.

In a wetter climate, you may see significant mold or algae growth on the roof. Particularly in areas like Portland or Seattle with plenty of rain, a shake roof will last probably about 25-30 years, but at some point you're going to have to replace it.

Can satellite dishes cause roof leaks?

Satellite dishes are the bane of my existence.

We get calls and I'll give you an example of two calls I've had over the years.

One was with a flat roof. It happened to be a polyurethane foam roof that we had installed. I received a service call about five years after we installed it. The lady was upset because she said the ceiling in her bedroom had collapsed.

I know people are prone to exaggerate, so I've learned not to accept necessarily what they say, but to go and check it. I agreed to look at the roof, and because our people were all busy I was the one who went there to check it. Sure enough, she was correct. It's the only time I have ever seen this - her ceiling in the bedroom literally had collapsed. She had sheetrock on the bed, insulation was down, it was a mess. I looked at that and thought, "Boy, do I have a problem. We've done something wrong."

I went up on the roof to check and noted there were three holes right in front of a scupper. A scupper is a hole through a parapet wall through which water moves to drain off a roof. Obviously, those holes had been drilled there and left there.

Then, I looked at the wall above. There was a new satellite dish fastened to the wall. I took a couple of photos, went down ...continued on page 19

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Rental Housing Journal Metro ¡ December 2017

Rental Housing Journal Metro

Roommates ...continued from 10 good idea to allow joint tenant roommates to be responsible for a proportional share of the rents. Be diligent about requiring all of the rents from all roommates as a group jointly and severally.

Renting separate rooms presents a different set of considerations. For the most part just providing for a separate rental contract and separate deposit for each roommate can take care of most of those considerations but I often see landlords fail to do so. The other thing a landlord should insure is that each of those rental agreements carefully and completely describes which areas in the unit are exclusive access areas to that roommate and what areas are common areas. For example if one roommate is renting the top floor and another is renting the bottom floor except for a common kitchen then that should be carefully explained. This will be important in the event of conflict between roommates over use and areas within the unit. It will also be very important if an eviction becomes necessary. Let’s just say for example you need to evict John Doe from the upstairs.

If you only name John Doe in the lawsuit

Roof Preventative Maintenance ...continued from 18 then you will have problems if John Doe has brought in his girlfriend or some other occupant and the eviction won’t result in restoring possession to the landlord. If you name John Doe and all other occupants to prevent this problem then another problem because the sheriff with then remove everyone in the house.

That includes all the roommates that you did not intend to evict. If, however, you can bring the eviction against John Doe and all other occupants of the upstairs only, for example, you have solved all those problems.

The oversites come from not planning ahead for all conceivable possible outcomes. There are many outcomes that are not necessarily obvious without a lot of forethought. Having the proper forms available is not enough. Make sure you ask an experienced party about which forms are right to use. Remember you don’t know what you don’t know and what you don’t know can hurt you.

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Advertise in Rental Housing Journal Metro Circulated to over 6,000 apartment owners, on-site and maintenance personnel monthly.

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Rental Housing Journal Metro · December 2017

and asked the homeowner, "When did you have the satellite dish people here?"

"Oh, they were just here last week. I just got new service." And I said, "Well, let me show you a couple photos." I showed her a photo of the satellite dish, then I showed her a photo which included the satellite dish and the holes in the roof right below it. I told her that, "Your satellite dish people first installed the dish on your flat roof right in front of a scupper. They realized they didn't have good reception, so they moved it up onto the parapet two feet away and installed it there. They didn't bother to seal the holes. You need to call the satellite dish people and have them come replace your ceiling." Never heard anything more from her about that.

Another issue was with a shingle roof.

Same issue. Got a call, "We have water leaking in." They didn't claim that the ceiling was collapsed. I checked. It wasn't, but there was water damage requiring sheetrock repair and paint. Same issue.

Go up on the roof, there's a nice new satellite dish up on the roof. The installer hadn't bothered to caulk at the holes before screwing the receiver base to the roof. With heavy rain, water leaked in.

Satellite dishes are a problem. The ideal way to install a satellite dish is not to have it on your roof. It should be fastened to the wall or to the fascia board, so you have no penetrations in the roof. So good roof preventive maintenance involves correct satellite dish installation.

Summary Roof Preventive Maintenance With respect to flat roofs in multiunit housing, when the roofs are walked, make sure that any drains on the roofs are

cleared of any debris because we have had cases where a flat roof has collapsed due to water accumulation.

In one case, we received a call about water dripping into a unit through vents.

We got up there and checked. A child's ball had blocked a roof drain. Somehow a child had thrown a ball up on the roof and it was just small enough that it got stuck in the drain. From the water line on the parapet wall adjacent to the drain, it looked like there was probably 12 inches of water. With the accumulated water, water was running into the roof vents that were higher up on the roof.

That was a lot of weight. I was amazed that it lasted even that long, but with a pitched roof you might have had 12 inches around the drain, and you go 16 feet up the roof you have about 8 inches, so it's not as much weight across the whole roof surface. But still it's a significant amount of water, easy thing to address, so it's doesn't become a problem, and that way you avoid unhappy tenants and potential liability going forward.

SUNVEK is a commercial and residential roofing contractor, located in Phoenix, Arizona. They service commercial and multi-unit housing and HOA’s throughout the state of Arizona.

Areas of expertise include tile, shake, shingle, self-adhered flat roof systems, spray polyurethane foam, TPO and coatings of various types.

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Rental Housing Journal Metro ¡ December 2017