Attn: SBA Disaster Loans for Landlords

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Attn: SBA Disaster Loans for Landlords

David H.
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 are up to $2MM

- The loan terms are 30 years, 3.75% rate

- First 12 months of payments deferred 馃挜

- No prepayment penalty

- Funds are to be used for working capital needs

Apply for free at the following:

https://disasterloan.sba.gov/e... sure to select Economic Injury!

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!

72Reply
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Most Popular Reply

Mike H.
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. 

We'll find out....... :-)

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  • David H.
    OP
    Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
    6y

    @Bola A.

    Hi Bola, as I understand interest will accrue once the loan is disbursed to your account. This will function as a term loan for permanent working capital rather than a LOC.

    1Reply
  • Bola A.
    Rental Property Investor 路 Houston, TX 路 Member since 2014 路 146 posts 路 35 votes
    6y

    @David Hulit

    Has anyone gotten this loan and what is the interest rate?

    1Reply
  • David H.
    OP
    Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
    6y

    @Bola A.

    This iteration of the SBA disaster loan was just rolled out so my guess is no one in the country has received the funds yet.

    That being said, the interest rate for all small businesses and landlords is 3.75% Fixed, for up to 30 years. Non-profits get a rate of 2.75 fixed

    Unsecured up to $25,000

    2Reply
  • David H.
    OP
    Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
    6y

    @Bola A.

    I鈥檝e also heard on a conference call with the SBA this morning that there is a comment section on the application where they suggest requesting the length of the term desired (I suggest 30 years to minimize payments, keep in mind there is no-prepay penalty).

    You can also add in the comment section your rationale for a higher loan amount. The SBA will be decisioning the loan amount, but they indicated the comment section was the best place to request more funds if appropriate.

    My suggestion to all is to use internet explorer, and print a hard copy in case the site crashes, you can have the info written down and easy to access. Unfortunately, website crashes will be a reality.

    Best of luck!!!

    6Reply
  • Sati Ah
    Member since 2020 路 5 posts 路 4 votes
    6y

    Thank you for this.  Applying now. 

    1Reply
  • James E.
    Investor 路 Boston, MA 路 Member since 2014 路 232 posts 路 165 votes
    6y

    @Mike H. did you hear back from the SBA yet? Curious to see how they look at your application. 

    1Reply
  • Kirk R.
    Peoria, IL 路 Member since 2013 路 967 posts 路 383 votes
    6y

    bump

    1Reply
  • Ellen A.
    Member since 2019 路 50 posts 路 11 votes
    6y

    During Harvey hurricane I was  Employed by an engineering firm and had no rental properties. I was able to get an SBA loan because of the disaster.  I remember thinking it was odd to not have a business and get a business loan. But that's how it worked out. Now I'm going through the process of filling this out because I have 3 rental properties. The application is interesting because it asks questions like

    Current management since. I put 2018 because that's when I 1st started being a landlord. It says date business was established. I put 2018. Even though I'm a lander Lord with investment property but no LLC.

    It asks how many employees. I put one that would be me. 

     It asked what percent i own. I put 20% for me and 20% from my husband. Because the mortgage company is probly considered owning the rest of it.

    I might be wasting my time but I would rather waste 3 hours doing this and get denied then to not know.

    4Reply
  • David H.
    OP
    Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
    6y

    @Ellen Alvarez

    Hi Ellen,

    Thanks for reaching out via message and sharing your experience.

    I think it鈥檚 definitely worth applying at this time. A few hours work for thousands of dollars of low interest long amortization fixed rate money is worth it in my opinion.

    Interesting developments I鈥檓 reading in the CARES act that is being voted on now would allow all applications for EIDL loans to request a $10,000 advance grant, which must be distributed within 3 days of application request, and even if the loan is denied the $10,000 grant doesn鈥檛 have to get paid back. That鈥檚 effectively $10k in free money for any applicant of the EIDL loan if this is approved.

    6Reply
  • Dale G.
    Landlord 路 Overland Park, KS 路 Member since 2012 路 8 posts 路 7 votes
    6y

    Line 15 of the application asks the amount of the estimated loss.  I know how many tenants are no longer paying rent. But who knows how long this will last.  How is one supposed to come up with the loss amounts at this time?

    6Reply
  • David H.
    OP
    Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
    6y

    @Dale G.

    My thoughts are to assume the worst and ask for more. In my opinion in these types of scenarios, especially this one, it鈥檚 best to ask for more.

    They won鈥檛 give you more than you ask for, so you might as well project a huge loss and get less of a higher amount.

    Projections I鈥檝e been told are framed on 6 month time frame if that helps. It may be increasing to 12 months FYI.

    3Reply
  • Dale G.
    Landlord 路 Overland Park, KS 路 Member since 2012 路 8 posts 路 7 votes
    6y

    I also wonder if we can claim damages for existing commercial vacancies since prospective tenants have all evaporated.

    1Reply
  • Mike H.
    Rental Property Investor 路 Manteno, IL 路 Member since 2009 路 2k+ posts 路 2k+ votes
    6y

    @James E.  I have not heard back from the sba. They had actually shut down their website for a few days and now thats its back up, I can no longer login and see what the status of my file is. They're saying to call or email to find out the status.

    I tried calling but its forever on hold. I sent an email.  We'll see what they say. But if its this hard to get the status of the file, i'm guessing they're not really doing much in terms of being able to process the files.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    6y
    Originally posted by @Ellen A.:

    During Harvey hurricane I was  Employed by an engineering firm and had no rental properties. I was able to get an SBA loan because of the disaster.  I remember thinking it was odd to not have a business and get a business loan. But that's how it worked out. Now I'm going through the process of filling this out because I have 3 rental properties. The application is interesting because it asks questions like

    Current management since. I put 2018 because that's when I 1st started being a landlord. It says date business was established. I put 2018. Even though I'm a lander Lord with investment property but no LLC.

    It asks how many employees. I put one that would be me. 

     It asked what percent i own. I put 20% for me and 20% from my husband. Because the mortgage company is probly considered owning the rest of it.

    I might be wasting my time but I would rather waste 3 hours doing this and get denied then to not know.

    you and hubby own 100% mortgage company is simply the lien holder NOT the owner. unless you bought on a contract for deed type deal were title stayed in the sellers name

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    15Reply
  • Michaela G.
    Investor 路 Atlanta, GA 路 Member since 2013 路 3k+ posts 路 3k+ votes
    6y

    FYI - I applied 4 days ago and yesterday I got an email, that said "status changed to 'Received in Review'. 

    9Reply
  • Charles Welch
    Rental Property Investor 路 Mendenhall, MS 路 Member since 2013 路 1 post 路 0 votes
    6y
    0Reply
  • Mike H.
    Rental Property Investor 路 Manteno, IL 路 Member since 2009 路 2k+ posts 路 2k+ votes
    6y

    @Michaela G.   Were you able to upload all your docs on the website or did you have to email them?
    I had to email mine because the upload feature wasn't working. 

    0Reply
  • Michaela G.
    Investor 路 Atlanta, GA 路 Member since 2013 路 3k+ posts 路 3k+ votes
    6y
    Originally posted by @Mike H.:

    @Michaela G.   Were you able to upload all your docs on the website or did you have to email them?
    I had to email mine because the upload feature wasn't working. 

    I had problems with uploading on Chrome and then went to Internet Explorer and it worked 

    2Reply
  • Jonathan W.
    Kansas City, KS 路 Member since 2018 路 67 posts 路 70 votes
    6y

    @Mike H.

    Do you already have losses because of the shut down? Are you guessing at you estimated losses? You have to have losses from my understanding to get approved.

    0Reply
  • Jeff D.
    Real Estate Investor 路 Portland, OR 路 Member since 2012 路 70 posts 路 26 votes
    6y

    No more online applying as far as I can tell.   Mail in only.  And it asks for a PFS to be submitted with app.  Which means schedule of real estate, which means show your total equity.  Which means on paper you look rich.  I am nervous about this part.   I am cash poor (like very), but asset rich.    Won't this be a problem to qualify?    I guess given current conditions,  property values have plummeted, so maybe it's actually zero or negative equity!  yay!  

    2Reply
  • Mike H.
    Rental Property Investor 路 Manteno, IL 路 Member since 2009 路 2k+ posts 路 2k+ votes
    6y

    @Jonathan W.   No. My understanding they were going to base the loan amount for landlords on gross profit. I saw one of the commercial lenders that put out an faq on it that said it was to be based on six months of gross profits - for landlords. I assumed gross profit was rent minus piti.  But we'll see.  The lender put the faq out there so nobody would call and ask them questions about as they have no way to make any money off those loans. They didn't want to take up their time. But they seemed to have quite a bit of guidance for the loans.

    It also said that once they came back with a loan amount, you could negotiate the total loan amount. Not sure what would allow them to change their number exactly but we'll see.

    I have yet to receive the email stating my application is received and being reivewed as Michaela did above. So I may have to call in and wait the hour plus to find out whats going on with mine.

    1Reply
  • Rick Botti
    Member since 2018 路 4 posts 路 1 vote
    6y

    I was able upload the applications today but I didn't receive a confirmation or an email as of yet.  I assume I wait or try calling this week.  

    0Reply
  • Gaspare U.
    Rental Property Investor 路 Cranford, NJ 路 Member since 2019 路 245 posts 路 148 votes
    6y

    Which application are Landlords using? The one I filled out was very basic and simple. I have a retail strip mall where tenants are already asking anywhere from rent forgiveness to using the security deposit for April's rents. I also have multifamily, where I haven't heard anything from them yet.

    Thanks in advance!!

    0Reply
  • Tom Wong
    Investor 路 Austin, TX 路 Member since 2016 路 11 posts 路 10 votes
    6y

    I'm a retail center investor who has commercial mortgages on all my properties. While the EIDL does look like it could be an attractive option to consider, I have a question/concern: since any EIDL over $25,000 requires collateral--and the SBA specifically says it takes real estate as collateral when it is available--wouldn't that be a problem for the existing lenders? I would think the first mortgage holders would not want other lenders (especially not the federal government!) to have a claim on the same collateral.

    Would greatly appreciate it if anyone might be able to share their thoughts/experiences on this question!

    4Reply
  • Michael Ablan
    Real Estate Broker 路 Watertown, NY 路 Member since 2016 路 1k+ posts 路 1k+ votes
    6y

    I took a chance and applied with all of my businesses.  I worried I may have bombarded them with too much, but then again, my state has deemed that brokering, construction, and apartment showings are non-essential, so I figured why not.

    It's my understanding that they have a $10k option that may not be required to be paid back.   Then there's unsecured loans up to $25k.  Then we have to pledge after that.  I have to sign personal gaurentees for all my loans regardless, so to collateralize isn't that big of deal for me as long as they don't demand 1st position liens.

    They're also offering 250% assistance on your weekly payroll if you keep your employees paid.  They'll then forgive that loan if you continue to keep them working after this is all over.

    Regardless, this situation has tanked my Airbnbs, my brokerage, my flips, my downed unit rehabs and my large conversion project. Fortunately I have nearly 100 units, but I'm still uncertain what effect it's going to have on my rental income.

     I have to imagine there's something they can do for our situation.

    3Reply
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