Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
Attention!!!!
Landlords / rental property owners in affected areas of the Covid19 pandemic
The SBA Economic Injury Disaster Loans (EIDL) are available for rental property owners if your state has already made the application to the federal gov.
I know Connecticut, Massachusetts, Maine, New York all have. Expect all states to eventually apply.
These loans will take a minimum of 3 weeks to get to you so start now! There will be a overload of applicants and this is first come first served. Be prepared and submit a complete package! Details outlined at the link above!
Rental Property Investor 路 Manteno, IL 路 Member since 2009 路 2k+ posts 路 2k+ votes
6y
I just submitted my application. The website is struggling. It wouldn't let me upload the files for certain things they require because the upload feature wasn't working. I even tried on internet explorer (somehow that was their preferred brower). But this loan may be huge for landlords with a lot of properties. I have 82 houses. If 50 don't pay the rent, that would be a loss of roughly 70k a month. That'll eat thru my reserves awfully quick.
But I saw on the front page of the loan request app that they spefically state that landlords with rentals can get the loan and they even give us the direct instruction as to some selections we need to make (i.e. economic injury - just as David mentioned in his initial post).
To me, I look at it as though they should be able to make some projections as to losses. Maybe a worst case of 50% collections for a period of 6 to 9 months? And then offer a loan up to that amount. Again, how they come with their numbers will determine how useful the loan will be. A 10k loan is going to do nothing for me. A 100k loan might be the difference in keeping all my payments with the banks current and still having enough money for repairs and the like so I don't lose my houses.
Honestly, a worst case scenario of this going on for 9 months and say 50 percent collections and no option to sell the homes because we couldn't evict the tenants could cause me to lose everything. Its just not a scenario we can plan for. I've always said that there could come a time when there simply weren't enough renters because everyone was able to buy again. Well, that would mean house prices would be huge and i"d just jump on the bandwagon and sell and take my profits.
But how in the world do you account for something like this? Little to rents coming in. No ability to evict the tenants to sell the property as an exit? That just doesn't exist.
But thats why I really believe the sba is going to be super aggressive in these landlord loans. If I can get thru this with all my payments being kept up and the only hit to me is a new loan/debt of say 200k at 3.75%..... guess what, I'll be tickled pink. I can factor that in as the cost of doing business and then show these banks how I was able to survive in one of the worst debacles ever seen.
Hey guys. As a landlord who just owns one rental property and does not yet have an LLC or sole proprietorship would i qualify?
I am in the same boat and would really like to know someone's opinion. My other question is; when the application ask for gross income under this situation (we are still working 9-5 jobs and I own a side business), do we input our total or just what the property is bring in?
How are you all estimating "Rental Properties (Residential and Commercial) Only - Lost Rents Due to the Disaster"? I won't really know until after rent is late in about a week.
Also, I have 2 refinance transactions going on right now. If I apply and SBA does an inquiry against my credit, won't that raise red flags with my refi bank and potentially cause issues?
I believe that the estimates would be a reasonable projection if lost rents due to the disaster. If you suspect 3 units vacant for 3 months I would just do the math and input that. Cant say for certain but that would be logical given the circumstances and options availible.
In regards to the refinances I would highly suggest contacting your lender. I cannot say for certain if the SBA will pull against your credit, though I would assume so. Also, if. you worry it would raise friends with your refi bank I would ask rather than risk it.
@David Hulit --- thank you for your response and for the entire thread. I went ahead and completed the application. I guess I got the light version without having to upload too many docs. I realized I have my credit frozen anyways, so once they get to processing the applications, they will need me to unfreeze it anyways. It's possible I will be long done with my refis by the time they get to me and if they don't I can always delay the application.
Engineer 路 Fawn Grove, PA 路 Member since 2015 路 93 posts 路 10 votes
6y
so i just saw this thread. Filled out the instant assistance forms on line. The ones we upload need an SBA # how did any of you get that? I called the number without much luck trying to get that.
Rental Property Investor 路 Dayton, OH 路 Member since 2015 路 312 posts 路 273 votes
6y
Hi all, need some advice here as I really need a quick 10k. I am like a sole proprietor doing buy, rehab, and self manage business with 10 doors and growing. but as of 2018, I was only filing schedule e. That could cause complications, right? In 2019 I added my two kids with pay and I will file as a SP. Should I file 2019 before completing the application? thanks
Investor 路 Idaho Falls, ID 路 Member since 2016 路 935 posts 路 629 votes
6y
@David H. In the streamlined version, are the COGS to be all the normal expenses or does that get left blank? I did not see anywhere else that asks for operating expenses. Before I click the submit button I want to be sure I filled that part out properly.
Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
6y
@Don Spafford
Honestly Don there has not been clear guidance given on this yet. I think most people are treating COGS as operating expenses.
The SBA just simply hasn鈥檛 provided enough clear guidance to rental property owners on these specifics.
I highly suggest you and all those with questions participate in the daily calls from the New Hampshire District at 9am and 2pm EST
The number is 2o2-765-I264 and the access code is 522409519#
The call at the end allows for people to ask questions. I鈥檓 sure other states are offering this as well. I was on it again today and they answered some questions of mine
Financial Advisor 路 Duluth, MN 路 Member since 2012 路 157 posts 路 194 votes
6y
I just applied for the loan this afternoon. It was the most straightforward loan application I have ever experienced outside of an Amex Next Step loan I have used in the past. It took less than 15 minutes since I have reliable financial records that are easy to access.
I entered all my expenses (mortgages, CAPEX, utilities) under the cost of goods sold since there is no other way around showing your expenses. I also kept the loan amount under $200,000 just to avoid more collateral.
It will be interesting to see if the 10K advance option comes fast. It was strange adding my bank account info, but I must give kudos to the SBA for streamlining this process. Just check a box for a 10k advance!
The government/Fed sure learned a lesson or two from the last crisis. Both the speed and size of this stimulus is blowing my mind. I will keep you posted on how this works out.
Rental Property Investor 路 Columbia, SC 路 Member since 2019 路 38 posts 路 10 votes
6y
I think this is all panic just my opinion that's all, when you think about it we are only in the beginning stages and people are still paying their bills I say weather the storm and not get crazy yet. The rest of the world hasn't such down so why should we be thinking about going in to more debt than we already have? The banks, bill collectors and loan offices are still collecting on debts so if we start overloading systems with panic borrowing for money that we can't possibly spend then how will the economy survive what is going on? I just say let's not feed into the panic like the toilet paper craze its panic thinking and the only ones getting richer are the manufacturers.
Real Estate Investor 路 La Fayette, NY 路 Member since 2017 路 110 posts 路 27 votes
6y
Did anyone get an email after your application? I printed out application number page but never received an email like "Here is your app number we got your application and will be processing" just thought that seemed strange they don't send an email out
Real Estate Agent 路 Boston, MA 路 Member since 2016 路 15 posts 路 3 votes
6y
Hey everyone,
I own mutiple residential and commercial RE in MA. I applied for the 10k immediate assistance but I am confused if I apply for the 7a or 7b loan. I own all properties in LLC's which then pay a management fee up to my S Corp which I am the sole owner. If someone can shed some light into this that would be so helpful. My commercial tenant is struggling as are a few bar industry tenants residentially. I dont think the PPP loan applies to me but any feedback is super helpful! Thank you!
Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
6y
@Joyce Williams
Hi Joyce I鈥檓 not sure what your referring to.
There are two elements of the EIDL loan/grant program now
The new streamlined application allows for you to request an advance, which will be up to $10k, and it is a grant. I.e. it does not need to be paid back. Also even if you are not approved for the loan, you may Keep the grant.
The streamlined application that offers the grant is also the first step in applying for the EIDL loan, which has terms of 3.75% fixed rate for small businesses and a term of up to 30 years
I own mutiple residential and commercial RE in MA. I applied for the 10k immediate assistance but I am confused if I apply for the 7a or 7b loan. I own all properties in LLC's which then pay a management fee up to my S Corp which I am the sole owner. If someone can shed some light into this that would be so helpful. My commercial tenant is struggling as are a few bar industry tenants residentially. I dont think the PPP loan applies to me but any feedback is super helpful! Thank you!
Hi Heather, the EIDL loan/grant is likely the best option for your situation as it is eligible for rental property owners.
The PPP loan is unclear whether it is eligible for rental property owners, my thoughts are it is not, as typical 7a loans are not. Also, even it you were eligible, the PPP loan is based off of a calculation of your average monthly payroll costs for the prior year X 2.5. It is really designed for businesses with a lot of employees.
These EIDL loans will not be forgiven. There is currently a $10k grant that can be applied for. See links above.
The loan forgiveness people are referring to is a component of the new Paycheck Protection Program loan. The PPP loan is likely NOT eligible for rental property owners.
Also, if it were, the PPP loan size is based off of payroll from the prior 12 months times 2.5. Most rental property owners have limited payroll, even if for independent contractors.
Also the forgiveness is only for an 8 week period after the loan origination and the funds must be used for specific purposes, such as payroll. It is incredibly important to understand the PPP loan is not a blanket forgivable loan, there are strict rules attached, and it is likely NOT eligible for rental properties.
I believe the PPP loan size is 2.5 times the average MONTHLY payroll, not 2.5 times 12 months of payroll.
You are correct! Thanks for catching that. It was the average monthly payroll from the prior twelve months X 2.5 or < $10MM
Investor 路 Almont, MI 路 Member since 2015 路 361 posts 路 302 votes
6y
@David Hulit I just submitted our application last night at the SBA.gov website. The only two choices given were Realty or Real Estate Developers as type of business. They didn't have a choice for Rental Landlord. Is that what you meant by ineligibility?
(1) I thought I heard that if you kept the tenants that the loan relative to their direct rent would be forgiven. True?
(2) we have a sole proprietorship for a 4-unit and 3 out of state properties under a self-directed 401k trust FOR our business. Can all of these properties' rents be covered under this EIDL LOAN?
If you have more than one rental property do you apply for multiple loans or one loan for all properties?
I think loans apply to the homes owned by a specific corporation entity. I.e. if you have one LLC per home, one loan issued to the LLC covers the one home it owns. If an LLC owns 10 homes, one loans covers all 10 homes etc. Talk to your tax advisor obviously but the corporate laws are structured for this very purpose.
Real Estate Investor 路 Southern, IN 路 Member since 2015 路 34 posts 路 8 votes
6y
I have to say that was suspiciously simple. Other than some categories obviously not being designed to consider landlording, that's the most "streamlined" government form I've ever seen.
Don Spafford, Each LLC should have its own EIN number? You can submit for each EIN, according to what I read on the Krost site above. I think most people are estimating their losses for 6 months based upon gross income for the prior 6 months. But this is just an estimate. They will ask for more specific information going forward. But IDK for sure.