Portland Real Estate Blog

Once upon a Portland real estate market, fixer properties were hot commodities.  They were easy to finance and the market allowed a lot, if not too much, forgiveness for what might be considered sub par remodels.  Appreciation allowed for some leeway if the buyer was planning on holding the property as well.  Today’s market doesn’t allow for easy access to financing for properties in need of lots of work.  That’s just one of the reason we see fewer buyers planning on putting in sweat equity into their homes, not because they don’t want to but they can’t fund it.  We did just have a buyer close on a property financed with a Wells Fargo Purchase and Renovate rehab loan though so it is possible, just not as easy as in the past.

I’ve looked at a couple of hundred-plus year old properties this week that between the purchase cost and remodel cost would not allow a buyer, nevertheless a flipper, to have any chance of breaking even at the end of the project- even if they were discounted 10-15% from their current asking prices.  I this case, break even is what two independent appraisals before and after the remodel would show. I figure after participating in a few higher-end remodels I’ve got a pretty good feel of what it is going to take and cost to do something that doesn’t qualify as a Home Depot remodel (no knock on Home Depot, it’s that they aren’t known for selling premium hardware).

An overpriced rehab project  frustrates me more than overpriced “late model” homes as these properties while not historic by most standards are important to save what makes Portland Portland.  The market has changed for these properties- there are fewer potential buyers, they are harder to finance and they are harder to price.  How do you price a rehab project?  I don’t know how these properties were priced but if it were me, it would have to include a careful analysis of remodel costs and finished value vis-a-vis the “done” houses in the area.

On April 22nd, 2010 Oregon law changed regarding lead based paint.  The standard earnest money agreement (offer between the buyer and seller) includes a contingency for the buyer’s right to conduct a lead inspection.  Houses built before 1978 may have been painted with lead based paint.

The law prescribes and dictates how lead based paint is to be handled and contained (it did before but not as strictly).  The new restrictions include banning stripping paint with torches.  The change, according to the painter I talked to, “makes it cheaper to replace the siding than to strip it under the new law and repaint.”   The environmental impact notwithstanding, the change in the law is going to change how contractors do business:

In Oregon, many contractors will choose to obtain the “Certified Lead-Based Paint Renovation (LBPR) Contractors License”.  Most residential paint, remodeling, and renovation contractors will need the new CCB license.  Contractors will obtain this license to maintain compliance with the new federal lead-based paint regulations.  The new license will allow them to continue to perform renovation, repair and painting work after the regulation goes into effect on April 22, 2010.

Contractors choosing not to obtain the new LBPR license should cease all renovation and painting work on older homes and other buildings known as “target housing” and “child-occupied facilities” in Oregon (effective April 22, 2010) until they obtain an Oregon CCB LBPR license.

Performing work on subject structures without a LBPR license after April 22, 2010, will subject the contractor to the possibility of severe state and federal civil penalties.

The law also includes window replacement on “target houses” and “child occupied” homes.  Sills are one of the most common places we see paint chips in house interiors.  The combination of moving parts and window ropes that are often painted can cause flakes that contain the lead paint.

The cost versus value of remodeling is one of the major real estate questions that homeowners face.  I wrote this post about the National Association of Realtors 2008 Cost Versus Value Report a couple of months ago.

Hanley Wood has a much more regional tool for the cost versus value of projects.  The link is to the national spreadsheet but you can drill down into regions and register to download city-specific information which is where the graph below for Portland came from.  The report provides a description of what each remodel project entails.

The graph: © 2009 Hanley Wood, LLC. Reproduced by permission. Complete city data from the Remodeling 2009–10 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.

Here’s a reminder that The Oregon Remodelers Association’s 34th annual Home Improvement Show auction event will benefit the Make-A-Wish Foundation of Oregon and southwest Washington is at 5:00PM this Thursday, September 24th, the first day of the show. Like the rest of the show, is at the Oregon Convention Center in Portland (not the Expo Center).  Tickets prices, which include admission to the show all four days, are now 2 for 1.

Guests can enjoy the show, visit exhibits and bid on tremendous packages that will be auctioned off, while enjoying food and wine from local restaurants and wineries. 100% of the proceeds from the live and silent auctions will benefit the Make-A-Wish Foundation® of Oregon. [check out the website for a list of silent and live auction items].

Wristbands for the event will be pre-sold for $55 per pair and will also allow entrance to the show throughout the entire weekend. 70% from each wristband sold will benefit the Make-A-Wish Foundation® of Oregon.

The Home Improvement Show’s hours are:

Thursday, September 24th 2:00pm-8:00pm
Friday, September 25th 11:00am-8:00pm
Saturday, September 26th 10:00am-8:00pm
Sunday, September 27th 10:00am-6:00pm

The Oregon Remodelers Association’s 34th annual Home Improvement Show auction event will benefit the Make-A-Wish Foundation of Oregon (and southwest Washington).  The event is at 5:00PM on Thursday, September 24th, the first day of the show, like the rest of the show, is at the Oregon Convention Center in Portland (not the Expo Center).

Guests can enjoy the show, visit exhibits and bid on tremendous packages that will be auctioned off, while enjoying food and wine from local restaurants and wineries. 100% of the proceeds from the live and silent auctions will benefit the Make-A-Wish Foundation® of Oregon.

Wristbands for the event will be pre-sold for $55 and will also allow entrance to the show throughout the entire weekend. 70% from each wristband sold will benefit the Make-A-Wish Foundation® of Oregon.

The Home Improvement Show’s hours are:

Thursday, September 24th 2:00pm-8:00pm
Friday, September 25th 11:00am-8:00pm
Saturday, September 26th 10:00am-8:00pm
Sunday, September 27th 10:00am-6:00pm

I’m sure I wasn’t the first and I know I wasn’t the last since we just discovered the issue in a house we inspected: install a dryer vent when remodeling! Seems obvious that a laundry facility, a standard washer and dryer requires:

There is no perfect world for the laundry location in most houses. If they are in the basement, you probably have more space but the odds are most of washing is being created on the upper floors. A chute is nice but it only delivers it one way. Basements are not always finished to the quality of the rest of the house.

Some people won’t even look at a house if they are in the attached garage (I grew up with them there and it isn’t a deal breaker for me). Its probably the best place for them if there is ever a problem with the water supply or drain.

If they are near a bedroom they may to be too loud to run at night. There is often less space available. Uprights were often considered the considered the sofa bed of laundry: got the job done but not ideal. The modern day front loading stackables have fixed that but keep in mind that the standard for all machines is 27 inches wide. Narrower exist but they are not the norm.

If you have an electric dryer, take a picture or drawing of the socket before heading to the store. There are different layouts and it’s a lot easier if you now which one you need when looking at them in the store.

Since there were only four of us for Thanksgiving dinner this year, we decided that we’d have dinner out rather than having the traditional dinner and mess to clean up at home. Wildwood is only four blocks from here but fairly heavy rain caused us to climb in the car. Stepping out of the front door, we could clearly hear the din of sirens from multiple vehicles. Whatever was going on wasn’t being taken lightly. Pulling out from NW Northrup, I had planned on turning right towards Overton but saw a fire truck heading down Lovejoy towards our remodel project and future home. Like insects drawn to bright lights, I turned left towards Lovejoy. The street was completely closed between 24th and 25th: fire trucks and emergency vehicles everywhere. We pulled around the block to the Alano Club parking lot to find a ladder truck with its ladder resting on our roof and about half a dozen firefighters scrambling around the roof!

More Pictures Here! Sorry- link will be repaired.

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In Portland, most major (and some minor) projects require a permit. Do I need a permit? If you are doing the job yourself or are doing lots of things at once, it may make the most sense to head down to the city and get the permit yourself. On Thursday nights, from 5-7PM, the Bueau of Development Services host Residential Permit night. I arrived at 4:45 and was eighth in line. I felt like a proud parent when I discovered one of our past clients at the front of the line with his remodel plans for the kitchen in hand. When you go to sell you home, a savvy buyer needs to look no further than PortlandMaps.com to see if the “kitchen remodeled in 2005″ was done legally.

Once checked in, your slip of paper is put in a box depending on what you need to accomplish. My application was first entered into the computer. During this session, we discovered that some of the forms on the web are no longer in use but they are making a concerted effort to correct. It’s better to have too much documentation than none at all. When finished, the slip of paper goes to another box and your name is called. From what I could tell, your initial check in time determines your draw out of each box.

Since we live in the Historic Alphabet District, we have to get special approval for any project that will alter the exterior. I hadn’t realized that this was in addition to the State Historical Preservation Office application that I had already submitted so none of my exterior work was approved. All of my interior work is now permitted and I have the bright orange card that must be posted for all to see.

The staff was kind, helpful and friendly. I was at the cashier in just over an hour from the time that I walked in the door. The process was so much nicer than when I did the same in 2001 for another house.

“Forgot” to get a permit? Check out the City’s “Get Legal Program.”

In the Portland market, we tend to think of fixers as being in the $200,000 range and under 2000 square feet. The buyers are usually first time homeowners or investors looking to “flip” the property for a profit (note that you have to be a licensed contractor to do this (or at least check with the http://www.ccb.state.or.us/)).

This picture is the house circa 1900. The oldest picture we have found. The only other old picture we have is circa 1950 and the front porch has already been removed and only stairs remain.

Our new fixer project is none of the above. We’re experienced buyers looking to move in once the remodel is complete. The house is well over the $200,000 price range. The William L. Brewster house is on the Historic Registry as a contributing property to the Historic Alphabet District in downtown Portland. Brewster was one of the city’s first commissioners. The house was designed by the architecture firm of Whidden & Lewis circa 1900. It’s got seven bedrooms and three and a half baths and is just under 4000 square feet plus 1300 square feet of unfinished basement. The first time we did this, our project house was much smaller and we had intended to flip it but made it a rental instead that we still own.

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Basements used to be scary places where we crammed all the stuff we couldn’t find a home for in the main living areas. Many are still scary but others have been converted into livable space that rivals the rest of the home in features and quality.

Like all successful projects, plan and get a permit. Before you start, there are some basic questions you need to address. The best place to start is the City’s guide on converting attics and basements.

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