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.
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.
FYI - Property management is considered essential.
How much are you leveraged? If you have any free and clear properties, I think they may loan against that through collateralization. The government is trying it's best to starve off a deep recession. If you have a free and clear property, you may be able to get a cheap loan against it.
Real Estate Broker 路 Watertown, NY 路 Member since 2016 路 1k+ posts 路 1k+ votes
6y
@Calvin Thomas - Does that include showing apts? I know we can do emergency maintenance, but I haven't heard anything saying we can still show.
Nothing free and clear fortunately (I think that's good in this ? haha), but we are sitting in some very good positions on a few and doing pretty well as well. I'm very interested what they're going to want in exchange
@Calvin Thomas - Does that include showing apts? I know we can do emergency maintenance, but I haven't heard anything saying we can still show.
Nothing free and clear fortunately (I think that's good in this ? haha), but we are sitting in some very good positions on a few and doing pretty well as well. I'm very interested what they're going to want in exchange
They would lien the property I assume. I am not sure 100% yet. I have some calls placed in to some SBA lenders. As for showing property, do not think so, just maintenance and repairs. I wouldn't be renting in NY right now anyway with the eviction moratorium. NY has now become worse than CA.
Investor 路 Riverside, CA 路 Member since 2017 路 52 posts 路 22 votes
6y
@David H. Is there a submit button on the page? I was able to only upload the forms and documents and got a 'form uploaded' message but is there a submit button so we know it went through with all our uploaded documents? Thanks
Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
6y
@Vinci S.
Hi Vinci,
The site has been evolving as there has been more volume than ever designed for.
Form my understanding you need to upload the forms. I don鈥檛 know what the final screen looks like in terms of a submit button. I work for a bank doing SBA lending, and these loans come straight from the SBA and keep changing, so there鈥檚 unfortunately only so much I can say for certain.
Rental Property Investor 路 Newark, DE 路 Member since 2013 路 45 posts 路 11 votes
6y
@Michael Ablan is the weekly payroll assistance a separate application? I'd like to keep my one employee on but was looking for information on how to apply for that and haven't seen anything and I didn't see a spot for it on the Business Loan application.
@David H. Is there a submit button on the page? I was able to only upload the forms and documents and got a 'form uploaded' message but is there a submit button so we know it went through with all our uploaded documents? Thanks
There is a submit button. I am an investor both long and short term as well as a commercial banker by day. I applied and it was a beast to get through but SBA usually is. I submitted last Friday and this past Thursday I got a notice that it is under review. Supposed to be 3-4 weeks for a decision from what I understand.
Investor 路 Wynantskill, NY 路 Member since 2013 路 180 posts 路 77 votes
6y
Originally posted by :
@Michael Ablan is the weekly payroll assistance a separate application? I'd like to keep my one employee on but was looking for information on how to apply for that and haven't seen anything and I didn't see a spot for it on the Business Loan application
it is a separate application but process has not been spoken of yet. I expect we will know more on Monday or Tuesday.
Rental Property Investor 路 Cranford, NJ 路 Member since 2019 路 245 posts 路 148 votes
6y
@Bryce Cutler which form did you use please? I uploaded the Business Loan Application Form 5. I鈥檓 a landlord for both retail and residential properties.
@Bryce Cutler which form did you use please? I uploaded the Business Loan Application Form 5. I鈥檓 a landlord for both retail and residential properties.
Thank in advance for your help in this.
Form 5 is the correct form for the disaster relief fund.
I'm currently applying for a SBA 504 loan (already applied, but waiting on an appraisal). Will applying for the disaster loan affect my other loan? I just want to make sure that it won't make me look like a riskier applicant for the 504 loan.
Rental Property Investor 路 Manteno, IL 路 Member since 2009 路 2k+ posts 路 2k+ votes
6y
I think I read something somewhere that you do the cARES loan now while you're waiting for the economic relief/disaster loan to come through. And if you get that, then they will pay off the cares loan as part of getting the relief loan.
Investor 路 Wynantskill, NY 路 Member since 2013 路 180 posts 路 77 votes
6y
@Mike H. There are 3 separate loan options. The disaster relief fund which is out there and available to apply for now. The Cares program and bridge program are programs that they have told us are coming but haven鈥檛 finalized process and how to apply yet. It will go through the SBA but process is still pending. Might have full details tomorrow or Tuesday.
Rental Property Investor 路 Portland, ME 路 Member since 2019 路 160 posts 路 231 votes
6y
@Bryce Cutler
Hi Bryce and Mike,
The SBA Paycheck Protection Loan program that is coming from the CARES act is not eligible for rental property owners, only small businesses and non-profits.
The SBA bridge loan is unlikely to be a good option and may not even be eligible for rental property owners, though I鈥檓 not sure. Many banks are refusing to do the bridge loan as it caps at $25k and will bog down their processing department. The banks will be focusing on the PPP program.
Also, the SBA bridge program requires that the borrower have an existing relationship with the bank issuing the loan. Also, the bridge program has a guarantee fee which the other programs don鈥檛 and the interest rate will be much higher, prime + 6.5%. Even if rental owners could get the bridge loan, I would advice against this.
For rental property owners the EIDL loan is the only option as far as SBA goes.
STR's are typically not eligbile for SBA 7a loans. That being said, neither are non-profits, and they will be eligible for the PPP Program.
Something to consider though is that the PPP Program loan amounts are calculated specifically from 2019 payroll data, likely all will be verified and calculated from IRS Form 941. If the STR owner has been filing a 941 they may be able to receive relief, but my thoughts are it will be marginal compared to the benefit from the EIDL Loan as that loan accounts for lost rental income due to the disaster and the PPP loan does not.
Rental Property Investor 路 Kirkland, WA 路 Member since 2016 路 60 posts 路 19 votes
6y
@David Hulit You mentioned they may not be available for rental property owners (thought I read that above), I have a couple short term vacation rental properties and all guests have cancelled. So, operating expenses are piling up. Would this scenario be considered for a loan?