Attn: SBA Disaster Loans for Landlords

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Attn: SBA Disaster Loans for Landlords

David H.
Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 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 đź’Ą

- 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!

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Mike H.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 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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  • Calvin Thomas
    Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
    6y

    Landlords should probably put together a spreadsheet listing their liabilities and projected income per building. I believe I saw that was one of the items that they will be requiring anyway. Right now, just upload the initial application along with the T-4506 to start the process. When it is assigned to a rep., they will give you a list of what they need and process. I am guessing, due to the urgency of the need for funds for small business, they will do a quick verification with the IRS via your tax return, send you some papers to sign and issue the funds by mid-April.  The gov't knows if they do not get the money to all of the businesses, then we're all screwed. I believe Pres. Trump will be filing one for his real estate empire as well. That should be an interesting conversation between the President an an SBA official (he is still the owner of the Organization I believe).

    1Reply
  • Calvin Thomas
    Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
    6y
    Originally posted by @David H.:
    Originally posted by @Calvin Thomas:

    It might help if people knew what the 10k grant is called and what is needed in order to quality for it. 

    Hi Calvin,

    The grant is called the "Emergency EIDL Grant". To get the grant you only need to be eligible for the EIDL Loan and to have made application for the EIDL loan.

    The grant is referred to as an "advance" that must be requested at time of application. It is currently not live, as it was just put into law on Friday night. They expect to have it live on the website this week.

    Essentially, to qualify you must have a business that has been affected by the disaster, which at this point is everyone.

     Yes, I saw this on the form that you have to submit.  They will advance you 10k pretty quickly after submitting.  It does not say that the 10k is capped at 1 million businesses or forgivable. So, not sure.

    0Reply
  • David H.
    OP
    Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes
    6y

    @Calvin T.

    Hi Calvin,

    I know the grant is forgivable for two reasons..

    1. I read the CARES Act, page 67-68 spells this out

    2. The nature of a grant is you don’t have to pay it back, otherwise it would be a loan

    The reason I know that only 1 million business will get $10,000 is because the CARES act specifically allocated $10 billion dollars to this grant. $10 billion divided by $10,000 = 1 million businesses

    Hopefully that helps

    1Reply
  • Ashley Nowka
    Rental Property Investor · Salvo, NC · Member since 2018 · 13 posts · 8 votes
    6y
    This may be a stupid question, but in the section "Download Business Forms" there are 3 forms- 1.  Business Loan Application 2.  Home or Sole Proprietor Loan Application 3.  Economic Injury Disaster Loan Supporting Information.  Do Landlords complete all 3 forms? Or, Choose number 2- Home or Sole Proprietor Loan Application? Thanks
    1Reply
  • Rajesh M.
    Member since 2009 · 16 posts · 0 votes
    6y

    Me and my wife own several 1-4 family properties. They are all held in our personal names. Some joint, some sole and separate. There are no trusts or LLCs.

    What form do we fill out for EIDL?

    Form 5 says if you are a sole proprietor (not a partnership, Llc etc) then fill out form 5C, that is the home owner and soul proprietor form.

    @David H. or anyone else she’d light on this?

    0Reply
  • Amy Dorlig
    Realtor · Fairfield, CT · Member since 2018 · 3 posts · 1 vote
    6y
    0Reply
  • David H.
    OP
    Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes
    6y

    @Rajesh M.

    Hi Rajesh, it is my understanding that sole props must use Form 5c

    That being said, if you are not organized as a sole prop and just report the income on your schedule e, not schedule c, there could be complications. For example, I have 2 duplex’s but just report the income on a sch. E, therefore I personally don’t believe I am eligible, tho I’m not 100% sure, I wish I knew for certain.

    I suggest reaching out to your local SBDC (small business development center) or hop on an SBA webinar (google search EIDL webinars) and ask your question at the end of the call, it’s probably the fastest way to talk to a living person at the SBA.

    Hopefully that helps!

    0Reply
  • Jay Bob
    New York, NY · Member since 2019 · 65 posts · 15 votes
    6y

    @David Hulit

    Hi David,

    Thanks for the info. I owned two family house in NYC which I'm living in one unit and rented other unit. I'm afraid that my tenant may not pay rent for the coming months. I'm I qualify to apply for this loan? Thank you for your feedback.

    0Reply
  • David H.
    OP
    Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes
    6y

    @Jay Bob

    Hi Jay, I can’t say for certain. If you are organized file taxes as a business or sole prop then yes. If you just file under your schedule e as passive income then I’m not certain. I’d reach out to your local SBDC (small business development center) for guidance or attend one of the webinars the SBA is hosting (google search SBA EIDL webinar)

    If I was in your situation I would explore getting a mortgage deferral. Many banks are willing to do this at this time. Just make sure that if you do a deferral that they do not make a balloon payment at the end of the deferment period.

    1Reply
  • Jay Bob
    New York, NY · Member since 2019 · 65 posts · 15 votes
    6y

    @David Hulit

    Thanks for your quick response.

    1Reply
  • M Herzig
    Member since 2020 · 1 post · 1 vote
    6y

    @Mike H. I like your thought about paying down higher interest loans. From what I’ve read, though, this loan can not be used to refinance long-term debt. What are your thoughts on that?

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

    @M Herzig

    You are correct, this loan cannot be used to refinance debt.

    You could make standard monthly payments if related to business purposes, but you can’t pay down/off the loan.

    0Reply
  • Keith GhionPro Member
    Rental Property Investor · Newark, DE · Member since 2013 · 45 posts · 11 votes
    6y

    The streamlined application looks to be live?



    https://covid19relief.sba.gov/#/

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

    @Keith Ghion

    Awesome! Thank you for sharing Keith!!!

    0Reply
  • James York
    Member since 2020 · 137 posts · 158 votes
    6y

    @David H. you seem to have some pretty good info. I’ve got 4 lots I was preparing to build rentals on. Is this something I could utilize or is that not an acceptable use of the funds? My thought is it keeps construction workers employed now and tenants housed in a few months when they’re done. Can I just apply and be 100% honest and see what they say?

    0Reply
  • David H.
    OP
    Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes
    6y

    @James York

    Thanks James,

    I honestly can’t say for sure. My understanding was real estate development was ineligible, but I could be wrong.

    My feelings is as long as you are 100% honest it shouldn’t hurt to try. I would just be sure to understand the eligible use of proceeds on the funds and again, be 100% honest.

    Best of luck!

    0Reply
  • Barb Asay
    Rental Property Investor · Member since 2018 · 64 posts · 40 votes
    6y

    I just started working through the application and I have so many questions.  I don’t usually need my hand held but this is so different for me.  

    Is there a good resource to help work through the application?

    For example: I am a single owner LLC who reports rental income on a schedule E. I don't see that as an option for business structure. Cost of good sold? I don't sell goods, is this where I would put operating costs? Lost rents? It doesn't ask for "projected lost rent" so would you put $0 if you haven't actually "lost" the money yet? Number of employees? Do I count? I'm guessing not because I don't get a paycheck...

    I could use a hand in the right direction. I have 20 SFH's and 1 duplex. I have lost 2 tenants already (didn't want to work payments out, just moved out) and anticipate difficulties re-renting the homes. Also, laid off tenants and expect lost rents to happen in May, if not April.

    2Reply
  • James Edwards
    Lake Oswego, OR · Member since 2017 · 88 posts · 11 votes
    6y

    Anyone apply yet? 

    0Reply
  • James Edwards
    Lake Oswego, OR · Member since 2017 · 88 posts · 11 votes
    6y
    Originally posted by @Barb Asay:

    I just started working through the application and I have so many questions.  I don’t usually need my hand held but this is so different for me.  

    Is there a good resource to help work through the application?

    For example: I am a single owner LLC who reports rental income on a schedule E. I don't see that as an option for business structure. Cost of good sold? I don't sell goods, is this where I would put operating costs? Lost rents? It doesn't ask for "projected lost rent" so would you put $0 if you haven't actually "lost" the money yet? Number of employees? Do I count? I'm guessing not because I don't get a paycheck...

    I could use a hand in the right direction. I have 20 SFH's and 1 duplex. I have lost 2 tenants already (didn't want to work payments out, just moved out) and anticipate difficulties re-renting the homes. Also, laid off tenants and expect lost rents to happen in May, if not April.

     Considering this app went live in the last 30 minutes I'm guessing there is no guidance for a while. I would be counting the rents you lost guaranteed right now. 

    1Reply
  • Joseph Aaron
    Member since 2020 · 1 post · 0 votes
    6y

    Does anyone know how the SBA will be treating affiliation rules with the grants?

    I have several LLCs, each owning one rental building, with its own EIN number. I am the sole member of each LLC.

    In addition, I have an LLC that has payroll and provides services to the properties (construction, management, etc.). I plan to apply for the PPP loan for this entity.

    Can each of the property-owning entities apply separately for the EIDL grant? 

    0Reply
  • Bob B.
    Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    @David

    @David H. All of the webinars are sold out.  Are there other cities doing this?  Atlanta isn't 

    0Reply
  • Jon S.Pro Member
    Investor · Tampa, FL · Member since 2015 · 530 posts · 92 votes
    6y

    @David Hulit

    Thank you for posting this info!

    1Reply
  • Joe Carter
    Rental Property Investor · Rockaway, NJ · Member since 2020 · 24 posts · 21 votes
    6y

    @David Hulit good morning I’m trying to navigate the site myself to see where I sign up. I am a sole single person with a duplex. My tenant that was just infected actually left with owing me $10,000 in rent. He’s an illegal and trying to chase it down has been an issue. With the SBA loan be something I could try to obtain. From the post I’ve read I can get a 25,000 unsecured and a $10,000 loan as well not having to be paid back? 

    0Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    @David Hulit. Thank you!

    Irish Jones Realty4.947 Reviews
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    0Reply
  • Joshua Robinson
    Rental Property Investor · Dallas, TX · Member since 2020 · 10 posts · 17 votes
    6y

    @David Hulit

    Hey David, so I went to apply for the loan from my phone and it maybe took 20 minutes. 3 pages to go through. On the last page it asked me about an advance and for my bank information. I got nervous that I was on the wrong site or something. No one had mentioned that and many had suggested there were places to attach files/paperwork. I did not experience any of that. Has the application been changed that much to where it would seem really simple? Also, this advance mentioned is that the grant you’ve spoken of throughout this post?

    Thank you for all the info!

    0Reply
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