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Several years ago, the 80-unit Riviera Gardens apartment complex in Gresham鈥檚 Rockwood neighborhood had a notorious reputation. Calls to police and emergency personnel were common.

Nevertheless, NFN Investments, a local real estate investment and property management firm, in 2007 made Riviera Gardens its first acquisition in the Portland market.

One night a gang fight broke out. NFN managing member Spencer Noecker, who co-owns the company with his sister Lauren, was repainting a wall at the time. When the police responded, Spencer approached and told them he鈥檇 just purchased the property.

鈥淥ne of the guys just turned to me and said, 鈥楪ood luck,鈥� 鈥� he said.

Business has since boomed for NFN, which once had two people managing 22 units. Now it has more than 120 people managing 1,500 units, institutional-level backing and plans to expand its portfolio by several thousand units.

Rather than search for land to build on, NFN sought old properties to buy and refresh. Many naysayers opposed the approach.

鈥淎 lot of people shut down the idea, saying, 鈥榊ou鈥檙e going to spend money, you鈥檙e not adding units, and you鈥檙e not adding revenue to the property,鈥� 鈥� managing member Lauren Noecker said. 鈥淚 think just providing amenities to C-class apartments is a new thought, and a new idea, and I think we鈥檝e proven it works.鈥�

NFN purchased Riviera Gardens, at 80 S.E. 190th Ave., for $3.9 million. The rate of return was nearly 1 percent higher than for Class A properties in the city center, but the complex needed work. NFN changed the name to Grant View Court and invested $363,000 in new finishes, security cameras and landscaping. Rents increased 12 percent.

California roots

Lauren, a University of Southern California graduate, joined Marcus & Millichap and became its top female broker on the West Coast. Spencer, a University of Oregon graduate, went to work for her.

The Noeckers decided to use money they had inherited after their father鈥檚 death to acquire apartments. But by the time they were ready for their first purchase (a 22-unit apartment in L.A.) in 2007, the market was already saturated. They sought a place where rents had room to grow, and where land was cheap enough to buy.

Enter Gresham.

鈥淧art of the reason Rockwood has the reputation it has is a lot of the properties were built in the late 1980s and early 1990s, and for a variety of reasons, it鈥檚 always been a very affordable area,鈥� said Michael Parker, a senior planner for the city. 鈥淪o it鈥檚 been hard for landlords to invest in properties and fix them up.鈥�

The city in 2006 initiated an urban renewal area grant program specifically designed to improve the housing stock. For NFN, it was a huge perk. In the Noeckers鈥� eyes, Rockwood was close enough to Portland鈥檚 city center to be desirable, but far enough out to be affordable.

鈥淲e didn鈥檛 know much about Portland,鈥� Spencer said. 鈥淭o us, that seemed like a nice place. Compared to some pockets of L.A. it still doesn鈥檛 seem that bad.鈥�

NFN received nearly $25,000 in grant money to upgrade Grant View Court. It got similar grants for Carrington Square, a $2.7 million, 54-unit apartment complex at 637 S.E. 182nd Ave.; and Lantana, a $2.05 million, 49-unit apartment complex at 17744 E. Burnside St. NFN invested $703,948 and $508,000, respectively, and rents increased 20 percent in each.

By 2010, the company had nearly 400 units in its portfolio. That鈥檚 when Lauren reached out to a friend from Los Angeles 鈥� Nicolas Berggruen, chairman of Berggruen Holdings, a private investment firm with more than $2 billion in net equity.

NFN and Berggruen together purchased 143 units on Northeast 178th Avenue. Renovations followed and a joint venture agreement was born that today involves a yearly capital outlay for similar acquisitions.

Growing pains

Lauren and Spencer aren鈥檛 immune to rivalry, but they don鈥檛 fight like many siblings. When they tell people they run a company together, they鈥檙e often met with amazement.

鈥淭heir first reaction is, 鈥極h my 鈥� I could never work with my brother and sister,鈥� 鈥� she said. 鈥淚 think we may have a different perspective on it because we were so close growing up. But when we first started, we just had our own ideas of what the company could be, and that was the hardest part.鈥�

They鈥檝e since settled in to their respective roles. Lauren handles acquisitions; Spencer runs construction, maintenance and operations.

鈥淚t鈥檚 just the way it was when we were kids,鈥� Spencer said. 鈥淲e hung out in the same room 鈥� she had a TV and I didn鈥檛. Now we鈥檙e in the same office and I鈥檓 still bugging her.鈥�

Managing class B and C properties comes with its own headaches, though. In addition to initial upgrades, NFN鈥檚 properties require constant maintenance. Lauren and Spencer realized early on that they couldn鈥檛 afford to hire a contractor every time something came up.

They hired their own construction workers and became a contracting company. With the exception of growing trees and milling lumber, NFN does all of its own work. That necessitates some office and warehouse space, so earlier this year the company acquired a 50 percent share in the 16,400-square-foot Templeton Building, at 230 E. Burnside St.

Looking ahead

Today, several new projects are on the horizon in the Rockwood neighborhood. The Rockwood Boys and Girls Club is hoping to build a 28,000-square-foot facility on Northeast 172nd Avenue; and the city of Gresham has relaunched an effort to spur redevelopment at a five-acre ex-Fred Meyer site at Northeast 187th Avenue.

Lauren is proud how NFN has contributed to redevelopment in the area. Grant View Court is 100 percent occupied even though calls to emergency personnel have not聽decreased.

鈥淲e鈥檝e played a pretty big role in what I would call renovating and cleaning up the Gresham area,鈥� she said.

Next, NFN is working toward its first ground-up development, on Southeast Hawthorne Boulevard. Preliminary plans call for a mixed-use apartment project. The Noeckers are looking for expansion opportunities equivalent to Portland, though Lauren acknowledged that it is difficult.

In San Francisco, for instance, average rents increased 8 percent over the past year to more than $2,000 per month. In Portland, comparable properties fetch half that amount, but they鈥檙e cheaper to buy, despite rents increasing 4.4 percent.

鈥淪ystematically, the cities are not that different,鈥� she said. 鈥淭hey offer great quality of life, great restaurants. So when you think of why we live in a city, (Portland and San Francisco) have similarities. But when you think of the rent growth that we might have (here), it鈥檚 pretty phenomenal.鈥�