Do You Need To Sell Your Rental Property? Portland, Or.

One afternoon a homeowner called us asking for our home buying program. The conversation we had with him has motivated us to write this post. We believe it is important to share his experience because there must be more landlords in similar situations out there.

On these pages, subtitles for each paragraph summarize the questions and answers we have exchanged during the phone call. 

“My Tenant Stopped Paying Rent 8 months Ago, And I am Prohibited From Evicting Him.”

We have heard the above phrase many times. Oregon Executive Order 20-13 prohibits evicting tenants for being unable to pay rent because of the coronavirus hardship. Since it was issued in March, the order 20-13 has been extended twice. December 31, 2020, is the last day of validity.

The executive order went into effect nine months ago. So far, Governor Brown has not said whether she will order another extension, which if so, will further deepen the economic damage many homeowners are suffering right now.

The moratorium on evictions was issued to minimize the COVID-19 spreading. But the rule has tied the landlord’s hands during 2020. In Portland, the evictions for non-payment are prohibited until January 8, 2021, and in Oregon, December 31, 2020, making it impossible for landlords to regain control of their rental homes.

The order says tenants unable to pay their total or partial rent have from January 1 to March 31, 2021, to pay the missing months of the moratorium.

Experts believe, during the first quarter of 2021, we will see an increase in the cases where tenants abandon properties and simply disappear without paying a penny. Others think that no tenant will be able to pay in three months the 3,6,9, or 10 months they owe, plus their regular monthly rent. This thinking suggests, in early 2021, we will see hundreds of evictions as foreclosures as well.

This is the experience one of our clients was going through, and from now on, we will refer to, as Robert.

“My Tenant, Has Tenants”

We never stop being amazed by the things we learn in this business of buying properties. Robert told us, his tenant was unemployed since April. Then, he immediately contacted Robert to inform he had lost his job, and obviously, he could not pay rent. But he was looking for a new job, and in the meantime, he would fill out an application with the unemployment office to get unemployment benefits. The tenant said.

The months went by without the tenant paid anything for rent and not being able to find another source of income. Robert asked him about the application for unemployment assistance. The tenant said he was approved, but the amount he receives is barely enough to buy food for his family.

The Oregon authorities and the CDC recommendations for social distancing forced Robert to limit himself from visiting his rental property. He was in communicating with his tenant, only by phone or email. Although he wasn’t receiving any income from his rental home, Robert did not have much concern because the mortgage on the property was less than two years to end, and a second 10 years mortgage loan he has acquired to renovate the house, was about to end too

His first and second mortgage payments were covered in full with the income from the rental house until March 2020. Every Month, There was still an extra that Robert deposited in a special account to cover taxes and the house maintenance if needed. During the months that his tenant did not pay the rent, Robert covered his mortgage obligations with money from his savings and the special operations management account.

One day, in mid-September, one of the rental house neighbors called Robert to complain about the number of people who inhabited the house, and above all, that they occupied all the available parking spaces on the block, leaving the neighbors without a square to park their vehicles in front of their own houses.

Robert contacted his tenant to tell him about the complaint. Then he decided to visit the property. When he arrived at his rental house, he discovered 25 people living in the house, violating the rental agreement that was for 4 people, the married and two children. Robert interviewed some of the people who were in the house and discovered they were tenants of his tenants. People who were paying rent to sleep in a corner of the living room, the dining room, and even in the kitchen.

The house was in terrible condition due to misuse. The carpet in the main room and one of the other two rooms were dirty and torn. The bathtub area of ​​the second bathroom was destroyed, the walls of the second floor had scratches as if the children had been painting monkeys on them.

The stair rail was broken, and some of the wooden columns were missing. In some of the stair steps, the carpet was raised exposing the wood. A window of the living room had two broken glasses. The dining room’s wooden floor was partially lifted. The range worked with two burners only, and the kitchen cabinet doors were about to fall off. The garage door was broken. It had been turned into a bedroom where three people were living.

The grass in the backyard and the main garden disappeared due to lack of maintenance. It looked as if the house had been inhabited by a battalion during a years-long war.

Robert found out that his tenant was receiving an average of 3,000 dollars a month from rent. On top of that, he had never stopped working because his employer was classified as essential, and the company had not furloughed anyone. In short, the tenant was doing good business with Robert’s property for the last 7 months.

“There Is No Power To Evict My Tenant.”

Robert consulted a law firm in our city of Portland, seeking legal advice in filing an eviction lawsuit. He thought he had a good case because his tenant had violated the terms of the lease by subleasing.

According to the rental agreement, the house shall be inhabited by a married couple and their two children, a total of 4 people. In addition, the damage to the property was so extensive that to repair it, the tenants would have to move out.

The lawyer listened to Robert. Then, he went over the pros and cons to give Robert the bad news that there was nothing that could be done for now.

First of all,” said the lawyer. “We are in the middle of the COVID-19 pandemic, and the courts are working at 20% of their capacity. We can file an eviction lawsuit, but we have to be prepared for the matter to take months in court. On the other hand, you can talk to your tenant to convince him to leave the property. However, according to the latest Oregon laws, he must give him $ 4000 to relocate. Now, the other problem that arises is the other house inhabitants. although they are a risk of contagion, they are occupying your property as an emergency shelter. Since the house is yours, it could be possible you need to pay each person to vacate your property.” The Attorney concluded.

Robert sought a second and third opinion with other attorneys, but the response he received was more or less the same.

When Robert got home that day, he set about estimating what the home’s lack of income represented, plus what the house repair would cost. 

By October, he had stopped receiving a rental income of                                  $17,600. 

The home repair could be as high as                                                                 $ 25,000.

Relocate the tenant would cost                                                                         $    4,000. 

If the problem of the epidemic is not resolved until 2021, we would be talking about stopping receiving rent for at least six more months, which represented another 

                                                                                                                       $ 13,200.

By eye, the cost of recovering his rental house would cost Robert a little more than $ 59800. Also, adding the mortgages, easily, the amount to repair Robert’s rental house would reach close to 70,000 dollars.

Portland and Oregon laws protect tenants but leave small landlords adrift. Large companies that have hundreds of apartment complexes throughout Oregon and across the country rely on the advice of their legal groups and the support of millions of dollars to face the crisis that the epidemic has created. 

Robert decided not to open an eviction case against his tenant. He contacted us to find out about our home buying process.

Robert’s Rental Property Purchase Process.

On October 5 we talked with Robert over the phone, and then via Zoom, we agreed to meet at the property the next day and do an appraisal of it. At ten o’clock in the morning, two representatives from Better Off Home Buyers arrived. We went to visit the house taking all the precautions and recommendations of the health authorities to avoid the spread of the coronavirus. We used masks and face shield-viscera-type to cover our entire face, we were also wearing gloves and shoe covers. 

Some people on Robert’s property simply ignored us during the inspection. We were taking photos and videos of the property to have the house characteristics well documented.

The visit was a little longer than it normally takes. In this case, we wanted to have an inventory of the damages. Also, Robert was interested in having a copy of the observations we made during the inspection.

By Thursday of that week, we presented a written proposal to Robert. To arrive at the price we present to him, we researched the neighborhood where the home is located to know the compared home price in the area. Then, we took into account the repairs we need to do and the time it would take to rebuild the house.

Our legal team spoke with Robert and explained to him the tenant-landlord rights, the Better Off Home Buyers home purchase process. We always want to make emphasis that our transaction is transparent and within the framework of the law, to protect tenants, Robert, and ourselves.

Every time we prepare a proposal for the purchase of a property, we strive to arrive at a fair price for both parties. A win-win offer is the best way to show our clients the respect and appreciation we feel for them and their business.

Robert took three days to analyze our offer and by October 14, he accepted it. We gave him a check as a business deposit. Immediately, our entire team went into action to work on the necessary documentation to make the purchase.

We put in order everything concerning debts on the property, such as mortgages, liens, taxes, and any other creditor that may appear.

Normally, the process of buying a house takes us an average of 7 days, in Robert’s case it was a little longer. On October 29, we gave him the check for the value of his property. Robert was the house owner for many years, it was the first one he bought, and where his children grew up until they moved to a larger one. He put the house up for rent. As a landlord, he never had problems with his tenants. In his opinion, the experience with the last tenant was caused by the crisis we are in today. 

2020 has been a different year, the epidemic, protests, unemployment, nerves, the political life, have planted in people an uncertain feeling about what may come in the near future.

Better Off Home Buyers has helped many desperate homeowners during this epidemic. If you are going through an unfortunate situation, if the security of maintaining your home is compromised, or if you may have problems with your rental property, we can help you.

Get in touch with us by filling out the form on this page or by dialing directly (503) 212-9641.

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