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About Portland observer. (Portland, Or.) 1970-current | View Entire Issue (April 5, 2000)
Page 2 S U P P L E M E N T OF STÍye ^ o rtía n h (©baerüer Editor in Chief, Publisher C h arles H . W ashington Editor L arry J . Ja c k so n , Sr. BùJhkfLYrJliu. or T he P ortland O bserver A bout 15 years ago, inner N orth/ N ortheast Portland w as a hotbed o f open-air drug superm arkets, gang w arfare and prostitution. N eedless to say, it w asn ’t an area o f dynam ic urban grow th as it is today. W hat h a s tr a n s p ir e d to c h a n g e a com m unity once populated with Copy Editor ► or T he P ortland O bserver Joy Ramos Business Manager G ary A n n T aylor Creative Director Shaw n S tra h an 4747 N E M a rtin L u th e r K ing, J r., Blvd. P o rtlan d , O R 97211 503-288-0033 Fax 503-2880015 email: thefocus@ portlandobserver.com subscriptiori@pc»tland(Tbserv€T.com D eadlines for su b m itte d m aterial: Articles: Friday by 5 p . m . Ads: Monday by Noon Focus w elcom es freelance subm issions. M a n u scrip ts an d photo g rap h s can be re tu rn e d if accom panied by a self- ad dressed stam p ed envelope. All cre ate d display ads becom e the sole p ro p erty of the new spaper a n d ca n n o t be used in o th e r p u b licatio n s or perso n al usage w ith o u t th e w ritten co n sen t o f th e general m anager, unless th e client has p u rch ased th e co m p o sitio n of 1999 The Portland Observer ^ o r t l a n b (© bseruer boarded-up and condem ned houses to b e c o m in g a M e cc a fo r th e u p w a rd ly m o b ile an d u rb a n e ? A nsw ers to a few but not all o f those questions aw ait you in this special edition o f The Portland O bserv er’s housing edition. J o h n P o w e ll, a p r o f e s s o r at M ichigan State, has pointed out quite eloquently that historically, w h e n in n e r - c ity u rb a n a r e a s experience an influx o f professional and o th e r upper c la s s e s , opportunities are created. However, due to the inflation o f housing costs associated w ith this process, m any o f the traditional residents are forced to m o v e ; a n d th e c o m m u n ity becom es fra g m e n te d . C o n s e q u e n tly , m a n y h is to r ic residents are not able to benefit from these new ly created econom ic opportunities. T h is issu e attem p ts to p ro v id e inform ation on how to attain and p r e s e r v e w e a lth th r o u g h th e ac q u isitio n o f pro p erty . It also endeavors to present options to those threatened by displacem ent b y re c o g n iz in g v a rio u s ren ta l alternatives that are affordable for lo w and m o d e ra te - in c o m e households. A lso, w e w ish to bring to read er’s attention the availability o f unique lo a n a r r a n g e m e n t lo a n s fo r hom eow ners w ho otherw ise may be prohibited from m aking repairs on th eir hom es. A unique home savings program for low-income people CONTRIBUTED STORY th e ad. ------------------ ® Fair Housing April is Fair Housing Month Focus A Focus April 5, 2000 Individual D evelopm ent A ccounts ( ID A s ) a re m a tc h e d s a v in g s accounts that allow low -incom e individuals and fam ilies to build assets and m ove up and out o f poverty. Participants save m oney for a specific goal and their savings are m atched at a rate that varies from 1:1 to 2:1, depending on the typed o f IDA. A dult participants m ay save tow ards a dow n paym ent on a h o m e , p e rm a n e n t re n ta l housin g , ed u c atio n , or a sm all business. Y outh participants m ay save for educational, artistic, or athletic goals. O nce the participant has reached their savings goal and has attended the required financial education training, their savings is matched by PR1DA (matching funds n e v e r g o d ir e c tly in to th e participant’s account, they are paid directly to the vendor). A ccounts O ffered Individual D evelopm ent Account Eligible Participants: H ouseholds that m eet Earned Income Tax Credit incom e guidelines. S a v in g s G o a ls ” F ir s t- tim e h o m e o w n ersh ip , ed u c atio n /sk ill d e v e lo p m e n t, a n d b u s in e s s developm ent. M atch Rate: 1:1 M axim um Savings: U p to $750/ y ea r fo r th re e y ea rs = $ 4 ,5 0 0 (m atch+savings) N ew S tart D evelopm ent A ccount Eligible Participants: H ouseholds that m eet Earned Incom e Tax Credit incom e guidelines. S a v in g s G o a ls : F ir s t- tim e hom eyow nership/perm anent rental h o u s in g , e d u c a tio n /s k ill d e v e lo p m e n t, b u s in e s s developm ent. M atch Rate: 2:1 M axim um Savings: U p to $500/ y e a r fo r tw o y e a r s = (m atch+savings) $ 3 ,0 0 0 Y outh IDA E ligible Participants: Y outh (10- 18) in fam ilies earning less than 65% o f the are a’s m edian income. Savings Goals: Educational, artistic, and athletic achievem ents. M atch Rate: 2:1 M axim um Savings: U p to $300/ y ea r fo r o n e y ea r= $900 (m atch+savings) For m ore inform ation, please call th e F am ily F in a n c ia l S erv ice s D irector at H um an Solutions, 503/ 248-5201. Buying investment property — a win win situation C hris G uinn III for T he P ortland O bserver by T he term “first tim e hom e buyer” has becom e extrem ely fam iliar as o f late, m ainly from the prodding o f re a lto rs an d b a n k e rs try in g to e n c o u r a g e r e n te r s to b e c o m e hom eowners. I w ould agree that acquiring your first hom e is an enorm ous and very im p o r ta n t s te p to w a r d o n e ’s financial stability. H ow ever, w hat about the people w ho have ow ned a hom e for 10, 5 o r even the last 3 y e a rs? T h ey m ay b e read y to purchase a second hom e from m ore room or com fort, as an investm ent or even additional income. As a realtor, I help people purchase and sell property for various reasons. For those interested, w e can focus on buying investm ent property in the N orth/N ortheast areas. I f you a re n ’t quite sure how to go about it, maybe you just need the steps simply explained so you can go forward. G etting A Loan G e ttin g a lo an fo r in v e stm e n t property is a little trickier than when you bought y o u r first hom e. You are attem pting to buy a “non ow ner occupied” property. T o a banker, this indicates m ore risk on their part so they generally require a larger dow n paym ent, som etim es as much as 20% o f the purchase price and a slightly higher interest rate. L et’s say that you w ant to buy a duplex for $200,000. T he purchaser w ould need about $20,000 for a down p aym ent. T h ere are b an k s th at require as little as 10% to borrow ers w ith A to A+ credit. T he issue o f k e e p in g g o o d c r e d it is v e ry im portant when buying investm ent property. It m ay be the single m ost im portant asset to have on your side. The m ore credibility you have in paying y o u r debts, the m ore property you can leverage with less m o n e y . T h e m o st s u c c e s s fu l investors usually start out with more credit than m oney and over tim e, their incom e rises m aking the need for credit less critical. Leverage Y our Property The term “ le v erag e” is o ften u sed w hen buying investm ent property. This sim ply m eans using the m oney or equity in a property to purchase or leverage another. Let ’ s say the hom e you bought 7 years ago for$ 110,000 is now w orth $ 175,000. T his m eans you have $65,000 equity in that property. M any hom eow ners use this equity for hom e im provem ent or debt consolidation, but it can also be used to leverage another property. U sing property to buy property is generally financially w iser than ju st getting a loan on y o u r eq u ity b ecau se you m ake m oney on the investm ent property as opposed to ju st paying interest. So th a t $ 2 0 ,0 0 0 y o u n e e d to purchase that duplex do esn ’t sound like such a large n u m b er now, especially w hen the positive cash flow a m ulti-fam ily unit can produce is considered. If a venture o f that size seem s a little too m uch right now , try som ething sm aller and less expensive like a sm all hom e in N orth/N ortheast Portland that needs a little fixing up. T his is a w ay to acquire “sw eat eq u ity ’.T h is sim ply m eans buying a distressed property fo r lit tle m o n e y an d m a k in g im provem ents on your ow n o r as inexpensively as possible to bring it up to a level o f the hom es around it. At this point, you m ay choose to rent the property and m ake your m oney back over tim e w ith your tenant paying your m ortgage or you m ay decide to sell and take your m oney or “sw eat equity” on to the next one. Y ou m ay also decrease the risk and obligation by going in on a jo in t venture with a partner. T here are tax laws such as “capital gains” w hich you need to know about which you can leam by talking w ith your tax person or CPA. Invest in y o u r com m u n ity W h at better place to invest than your own com m unity. G ood investors who invest in theircom m unity generally im prove their com m unity. As we can see, N orth/N ortheast Portland n eig hborhoods are experiencing s w e e p in g changes and redevelopm ent in the last few years. T ake the case o f Ben and Lisa May o fN o rth east Portland. They started investing a few years ago in the com m unity and have been able to (Please see ‘Property’ page 5)
