Oregon Passes 150 Million Landlord Compensation Fund

Rental Housing Journal MetroSponsored ContentWhat Properties Can be Used in a 1031 Exchange?BY THE KAY PROPERTIES TEAMIf you are interested in selling your real estate, thephrase “1031 Exchange” has certainly come uponce or twice in your research, as an outright salecan trigger large tax consequences. The capitalgains and depreciation recapture taxes can bea serious dent in the return you expected to earnfrom the sale of your real estate. A 1031 exchangeis a process by which an investor can defer thetaxes they would pay upon sale of their investmentproperty. It is important to understand how the1031 exchange can be utilized.A 1031 exchange may be performed if the property sold and the following property or propertiespurchased are both considered investment property. Investment properties are those that are usedfor business or investment purposes. Raw land,land with mineral rights, multi-family, and commercial real estate can all qualify as “like-kind” for thepurposes of a 1031 exchange. Any property thatfalls outside that definition would not qualify. A primary residence or any property in which one staysmore than two weeks in a year is NOT consideredan investment property.Again, an investment property must be exchangedfor another investment property. Properties canonly be exchanged if they are used for investmentpurposes like residential rentals, multifamily, condominiums for rent, commercial, industrial, retailetc. Furthermore, there are many 1031 exchangealternatives one may consider. A Delaware Statutory Trust is a great example. With DST real estate,an investor is able to exchange into propertiesand own a fractional interest in the real estate.Instead of investing the entirety of the proceedsAbout Kay Properties and www.kpi1031.cominto another property, one for one, an individualis able to invest in multiple pieces of property asa fractional and passive owner. Under the DSTstructure, fractional real estate ownership is stillconsidered eligible for 1031 exchange. This is ahelpful way to potentially diversify into a portfolioof properties, thereby buffering the risk of having“all your eggs in one basket” by buying a singleproperty. Utilizing the DST structure, one can ownfractional interest of multiple properties with theopportunity for several geographic locations aswell as with various asset managers running eachreal estate investment as part of a diversified 1031solution into DSTs.These are illustrative examples of 1031 DST offerings. Future available 1031 DST offerings andtenants may be different. 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If you have received this communication in error, pleaseimmediately notify the sender and permanently delete all copies that you mayhave. Securities offered through Growth Capital Services, member FINRA,SIPC, Office of Supervisory Jurisdiction located at 582 Market Street, Suite 300,San Francisco, CA 94104.This material does not constitute an offer to sell nor a solicitation of an offerto buy any security. Such offers can be made only by the confidential PrivatePlacement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing. IRC Section1031, IRC Section 1033 and IRC Section 721 are complex tax codes thereforeyou should consult your tax or legal professional for details regarding your situ-Oregon Passes Compensation Fund for LandlordsContinued from Page 1by the department; Is not a member of the tenant’simmediate family as defined bylaw; During the pendency of thedistribution application, agreesto not give a termination noticewithout cause or for nonpayment.Rep. Mark Meek, D-Oregon City,echoed the testimony of many smallerlandlords that they are struggling topay their mortgages. Meek noted manylandlords continue to have to pay propertytaxes, insurances and all the other billsrelated to their property, and many havenow said they are at risk of losing theirproperties.“Why is it that Oregon housingproviders are being forced to forgo 20percent of their revenue and waive alltheir rights just to access relief?” Meeksaid to Oregon Public Broadcasting. “Noother industry has been asked to bearsuch a heavy burden in this pandemic.”The bill will require tenants to sign asworn statement in order to benefit fromthe new relief. It also frees up landlords tomore easily evict people “for cause,” suchas when they are planning to demolish aproperty.For the rent-relief portion, the bill alsosays landlords may have to provide “anyother information or materials requiredby the department,” which will developan online application for landlords toapply for distributions. PROTECTION FOR SMALLERLimits per tenant, per landlord orper time period; The number of units a landlordmust own; The percentage or amount of totalrent unpaid.LANDLORDSThe bill says the department “mayestablish any qualifications, priorities,restrictions or limits on the distributionsmade under this section, to prioritizelandlords with fewer units and landlordswith a higher percentage of unpaid rents.”The restrictions and limits thedepartment may put in place include:Rental Housing Journal Metro · January 2021“The department may coordinate withlocal housing authorities to administerthis section, including through makingdistributions to landlords. The departmentor local housing authority shall mail totenants copies of a notice of distributionto their landlords and the amount of rentforgiveness agreed to by their landlords.The department may conduct outreach tolandlords and tenants, including outreachto non-English speakers.”Rental assistance must serve financiallydistressed households, and paymentsmust be made directly to the landlord.The extension of the eviction moratoriumalso extended the requirements for bothlandlords and tenants.3

Rental Housing Journal MetroPortland Apartments’ Digital Passport SupportsLocal Businesses, Helps to Drive Website TrafficBy Paul Bergeronpassports offers variety.Like in many parts of the country,downtown local businesses haveendured tremendous challenges causedby the COVID-19 economy. For many,operations have had to pivot, and inheartbreaking fashion, others have shutdown completely.NBP Capital, a commercial real estatefirm, opened Meetinghouse Apartmentslast fall. The company’s in-housemanagement firm, Templeton, operatesthe property. People from around the cityhave been drawn to the small-town, allare-welcome vibe.Downtown Portland is no different.But with recent vaccine news leadingto optimism, and the partnership helpdelivered by one apartment community,things are looking brighter in 2021.NBP Capital’s Director of BrandMarketing Sydney Webber noticedlast spring that her normally buoyantneighborhood had started to look a lotdifferent when COVID-19 took hold.She had an idea. To support the areaand provide benefits to her residents atWhile the apartment building featuresopen floor plans and impressive amenities,Webber says the thriving neighborhoodand dozens of local businesses are whatdraw renters.Meetinghouse, a 232-unit garden-stylecommunity, Webber created a digitalpassport coupon book in partnership withmany nearby merchants in the SellwoodMoreland neighborhood. From sushito skating, and for coffee and pets, the“This was the perfect test locationbecause of the relationship we alreadyhad with the local business associationand the timing with the holiday season,”Webber says of the program, which beganNov. 24. “We hope that if the pilot issuccessful it is something we can scaleto other neighborhoods in Portland andbeyond.”The winter 2020 digital passport isa variation of one the company usedwhen Meetinghouse first opened in fall2019. Then, Templeton distributed apaperback passport containing 40 localbusinesses. It was modeled after a U.S.passport and was included in movein gifts for new residents. Given theshift in circumstances, Webber decidedto overhaul the passport and createsomething with more flexibility.The paper passport was reserved forcurrent residents only. Today, it’s a moreinclusive experience. As the apartments’website reads, “You don’t have to liveat Meetinghouse apartments to becomea passport subscriber or even live inSellwood-Moreland to unlock coupons.We only require you love SellwoodMoreland.”Webber says the program has createdlocal media buzz and the participatingbusinesses’ websites have a link toMeetinghouse, driving traffic to itsproperty website. Anyone who visits thewebsite can subscribe for free.“It shows that as a company we valueour local businesses, and the passportamplifies our brand name to potentialrenters and beyond,” Webber says.“Introducing the passport is part of thesales process for the leasing team. It helpsour brand and neighborhood to stand out.”Webber advertises the passportthrough a variety of venues. Participatingbusinesses have a poster with a QR codeon display for their customers.“The passport relies on the power ofcross-promotion between businessesas well as user support, establishing itas a valuable consumer resource,” shesays. “We hope to continue to partnerwith local business alliances and mediasources to drive traffic to the passport andhope it will continue to grow in 2021 andbeyond.”Paul Bergeron has been reporting onthe apartment industry since 2002and served 20 years as editor-in-chieffor National Apartment Association’sUNITS magazine. He currently is editorof his LinkedIn media platform ThoughtLeadership Today and can be reachedat pbergeron333@gmail.com.4Rental Housing Journal Metro · January 2021

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Rental Housing Journal MetroPortland Rents Continue 9-Month Trend of DeclinesContinued from Page 1those of nearby suburbs.rent decline, cities in the rest of the metroare seeing the opposite trend.The pandemic’s effects on everyday lifehave certainly been more pronounced incities than in suburbs. Shelter-in-placerequirements and business restrictionshave ground to a halt many of the eventsand amenities that attract people to citiesin the first place: live entertainment, barsand restaurants, public festivals, and thelike.Rents have risen in seven of the largest10 cities in the Portland metro for whichApartment List has data. Looking throughout the metro,Lake Oswego is the most expensiveof all Portland metro’s major cities,with a median two-bedroom rentof 1,839; of the 10 largest citiesin Oregon metro that ApartmentList has data for, Beaverton andCorvallis, where two-bedroomsgo for 1,529 and 1,147, are thetwo other major cities in the metrobesides Portland to see rents fallyear-over-year (-0.8 percent and-0.7 percent).Bend, Vancouver, and Salem haveall experienced year-over-yeargrowth above the state average(9.4 percent, 5.2 percent, and 4.8percent, respectively).Why is this happening?Rents in outlying suburbs aregrowing much faster than rents in coremetropolitan areas, according to researchfrom Apartment List.There are a number of reasons renttrends in principal cities do not mirrorMany renters today are questioningwhether it still makes sense to pay apremium for city living. As a result,migration plays a big factor in the urbanand suburban rent divide, according toresearch.Apartment List is committed to makingits rent estimates the best and most accurate available. They start with reliablemedian rent statistics from the CensusBureau, then extrapolate them forwardto the current month using a growthrate calculated from their listing data.In doing so, they use a same-unit analysis similar to Case-Shiller’s approach,comparing only units that are availableacross both time periods to provide anaccurate picture of rent growth in cities across the country. Apartment List’sapproach corrects for the sample biasinherent in other private sources, producing results that are much closerto statistics published by the CensusBureau and HUD.DOES YOURLAUNDRY SERVICEPARTNER TREATYOU LIKE FAMILY?WE DO.We’ve got the laundry covered.Call 800-526-0955 today to get started.hainsworthlaundry.comTo advertise in Rental Housing Journal, call Sales Manager Terry Hokensonat 480-720-4385 or email him at Terry@rentalhousingjournal.com6Rental Housing Journal Metro · January 2021

Rental Housing Journal MetroPresident: Ron Garcia Vice President: Phil OwenPresident Elect: Melinda McClelland Past President: Ken SchriverSecretary: Lynne Whitney Treasurer: Sandra Landis Office Manager: Cari Pierce10520 NE Weidler, Portland, OR 97220503-254-4723 Fax 503-254-4821RHA Oregon President’s Messageinfo@rhaoregon.orgwww.rhaoregon.orgA Lot Has Changed in Past Two YearsGreetings! Remember me?It’s been two years since I last left myposition as President of Rental HousingAlliance, Oregon. But now I’m back.It seems like just yesterday, right? Well,actually no . So much has changedin the last 24 months. Our industry hasseismically changed since 2018, and manylandlords are ruing all that we’ve lost inthe way of our traditional property rights.In 2019, SB 608 brought us rent controland the loss of our rights to safely manageour rentals by eliminating No Causeterminations. In 2020, Portland’s F.A.I.R.ordinance dealt us the loss of our abilityto safely screen prospective renters andto adequately charge for tenant damagesat move-outs. Now entering into 2021,we have even lost our basic rights tosuccessfully collect rents through thegovernor’s eviction moratorium policies.With the coronavirus RHAO has, likeall businesses, lost a lot too - includingthe member benefits of monthly dinnermeetings, live training programs andnetworking opportunities.Loss is often associated with nostalgiaand even sadness as we long for those“good ol’ days”. But loss can also meansomething good. It is by its very naturereplaced with something found.For me personally, since I left thisposition at the end of 2018, I have lost 65pounds. I have never been healthier in mywhole life. Losing some of my bad habitsgave me the opportunity to find new onesand replace them with better choices indiet and exercise. Waking up one morningand recognizing I was an ideal candidatefor a stroke and heart attack turned outto be a lifesaving epiphany - once I tookaction.Was I scared? Yes. Was I prepared? No.Was I determined to try something new?At that point, the only answer was notreally - but what else was there left for meto do?And so this sense of necessarydetermination is what I hope to bringback to our organization. No, we maynot be individually equipped to changethe tides of our time. Oregon has a nearlySuper-Duper Single Party Majority andit is decisively pro-tenants’ rights. Ourstate just re-validated this in November.Rental Housing Journal Metro · January 2021Anger, protests, lawsuits or outrage maybe the normal and legitimate responsesif you have been adversely affected. Butthose reactions are not likely to invokesubstantive change. Crying foul andwanting to keep things “normal” is a rusethat thwarts improvement. Recognizingyour threats allows you to review youroptions. Emptiness is an excuse foravoidance. Sometimes the need to dig deepis the only option. Sometimes we need topivot and, against old advice, we need tochange horses in the middle of the stream.Many people have asked me what mynew diet is. When I begin to say whatworks for me, (an apple a day and nogluten) they normally begin to repel oreven debate. Running 25 miles a week andgiving up all dairy may not be your bestbet. But relying on old patterns can alsoseal one’s fate. I will be 67 this year andI am on Medicare and Social Security. Ididn’t start my new regime until I was 65.There is plenty of time and opportunityfor improvement, wherever we are.Rental Housing Alliance, Oregon isa service group designed to aid smalllandlords in their ability to run theirindividual businesses. We provide forms,advice, training, vendor introductionsand more. We even have our own lobbyistto help promote our interests withlawmakers and to keep us informed, inorder to remain in compliance with everchanging legislation.We have been in existence since 1927!Talk about having been through the upsand downs of economic forces! I hopeour members recognize that adapting tothe market and whatever new realities itbrings to bear has been a core process forus for almost a century. All the while wehave continued to help rental propertyproviders be the best that they can be inthe housing market, through whateverdirection that market was headed, at anygiven time. Yes, it is rapidly changingnow. So must we.Now here I am, back again in theCOVID-19 era of Zoom meetings and nosocial gatherings. With all this being said,I can honestly say you’ll be “seeing a lotless of me.”—Ron GarciaPresident, RHA-Oregon7

Rental Housing Journal MetroSponsored ContentReap the Benefits of Owning Your Rental Property througha Retirement Account — Tax-Free or Tax-Deferredpersons, which includes family members of “lineal”relation to you such as your parents or your children.BY STEPHANIE FRYARFOR PREFERRED TRUST COMPANYReal estate is one of the most popular investmentsto leverage within a retirement account, alsoknown as a Self-Directed IRA (SDIRA). It is a familiar asset if you own your own home or other typeof property, it offers diversification from traditionalinvestments, and the rental income and/or capitalgains funnel in tax deferred or tax-free dependingon the type of account. While the general conceptof investing in a rental property through a SDIRAmay be similar to investing outside of a qualifiedaccount, there are a handful of rules enforced bythe IRS that makes the management of this investment quite a bit different. The reason being thatyour retirement account is meant to benefit youwhen you retire, not before. Below is a quick overview of the similarities and differences of owning arental property in a Self-Directed IRA.WHAT MAKES IT SIMILAR?A SDIRA gives you the opportunity to make investment decisions in areas based on your knowledgeand expertise. In other words, you are not limitedto residential real estate. Your IRA can hold various investment property types, including commercial buildings, retail properties, raw land, andacreage (improved or unimproved), single familyor multi-unit homes, condos or townhomes, mobilehomes, apartment buildings and much more. YourIRA may also purchase foreclosure property asAs a custodian, Preferred Trust Company cannotgive advice about specific investments or strategies, but we can provide educational resourcesand point out the legal issues to consider for yourreal estate transaction(s). Knowing the rules associated with owning real estate in an IRA is essential and conferring with a legal and tax advisor isrecommended.long as the property has already been foreclosedupon.WHAT IS THE DIFFERENCE?One of the main differences is that all transactionsare processed through your SDIRA, from the purchase of the property, to rent collection, expensepayments, proceeds from the sale, etc.Other disparities are driven by IRS regulations,including the prohibition of using of your SDIRAassets in what the IRS considers “self-dealing”transactions. This means that you must utilize 3rdparty services for everything from realtor services,to property management, cleaning/landscaping/pool cleaning services, repairs, home improvements, etc. You also cannot use the property forpersonal use nor rent the property to disqualifiedPreferred Trust has 10 years of experience specializing in Self-Directed IRAs that hold alternativeassets. In the industry, they set the standard forquick processing times, fewer transaction fees,personalized customer service, and the higheststandard of compliance. Preferred Trust is currently waiving the establishment fee and first yearadministration fee for all new Self-Directed IRAaccounts through December 31st, 2021. Learnmore about this offer by clicking here or calling888.990.7892 today!Stephanie Fryar is the Content Creator for Preferred Trust Company. All content she produces isto

the landlord or that was paid to the landlord under this section and the landlord later receives from the qualifi ed tenant or on the tenant’s behalf, within the period requested Oregon Passes 150 Million Landlord Compensation Fund renTal HouSIng Journal Portland rents have declined 0.9 percent over the past month, and have decreased