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 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 · 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.
I just found this site and wanted to give an update of my experience. I applied for an SBA disaster loan for my downtown Seattle Airbnb (condo), as soon as Washington State was declared a disaster state.
Today I talked with someone at the SBA and have been approved for a $20K loan. Paperwork coming soon, along with a case-worker to discuss details with.
Interestingly, I was sent a form Saturday that included a place to indicate the financial impact of the disaster. I gave an estimate of lost Airbnb revenue from March 12-June 1. And also for June 1-August. During the first period alone I will lose $7-10K in revenue. June-August is higher. The person I spoke with said she just needed my gross revenue for 2019 in order to determine loan details. Nothing was said about a grant, although I provided information that could have been used for that.
I assume they'll be ready soon to process those grants, and I can discuss at that time, but for now the person I discussed this with at SBA had no idea about grants - only taking information to process loans.
It really gets old hearing politicians say they will make us "whole". That's just not possible under any scenario other than people going crazy this Fall to make up for their lost travel opportunities. Cross your fingers.
I would suggest reaching out to your local SBDC's (small business development centers) or SCORE (service core of retired executives) for assistance. Both are free resources. That being said they are likely swamped with calls.
Question-SBA form 1368-this refers to sales/goods-do I as a sole proprietor need to fill out?
I can't say as I do not know your business structure or services. I doubt you would need to fill this out initially as the new streamlined application process does not require this form upfront. I would just focus on what is asked of as of now at covid19relief.sba.gov/#
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.
Just came into this thread, I have 6 Airbnbs, all hard hit by corona. I'm finishing my taxes as we speak (2017, 2018 yes very late!) so I can apply for a cash out on a house I just rehabbed, really need to pull the money so I can survive but as luck will have it the corona hit, seems the refi might get more complicated because of the taxes and the current situation. What are my options for this program? Is it possible to get a loan with my house as collateral? If so up to how much do they lend?
Thank you very much in advance!
You may have very limited to no options because you are only now finishing your 2017 2018 taxes. That will be an unfortunate consequence of the very late filing.
As I understand, if you were eligible, they would calculate for rental property owners the loan amount based off of your projected or realized losses of rents due to the disaster. The first $25,000 is unsecured, above that they would require real estate as collateral, though they wont deny a loan for lack of collateral.
Please keep in mind, these funds must be used for specific purposes and cannot be used for business expansion. The SBA should have a list of approved uses of proceeds available per a quick google search.
I am not 100% sure of this answer. My thoughts are, if this follows preceding SBA guidelines, non-US citizens could apply as long as they have a green card and complete and INS verification process, which will likely require a few documents.
I just found this site and wanted to give an update of my experience. I applied for an SBA disaster loan for my downtown Seattle Airbnb (condo), as soon as Washington State was declared a disaster state.
Today I talked with someone at the SBA and have been approved for a $20K loan. Paperwork coming soon, along with a case-worker to discuss details with.
Interestingly, I was sent a form Saturday that included a place to indicate the financial impact of the disaster. I gave an estimate of lost Airbnb revenue from March 12-June 1. And also for June 1-August. During the first period alone I will lose $7-10K in revenue. June-August is higher. The person I spoke with said she just needed my gross revenue for 2019 in order to determine loan details. Nothing was said about a grant, although I provided information that could have been used for that.
I assume they'll be ready soon to process those grants, and I can discuss at that time, but for now the person I discussed this with at SBA had no idea about grants - only taking information to process loans.
It really gets old hearing politicians say they will make us "whole". That's just not possible under any scenario other than people going crazy this Fall to make up for their lost travel opportunities. Cross your fingers.
Thanks for this discussion!
Scott
Hi Scott,
Do you happen to have the number to reach someone? I called the main number and I'm number 1,323 in the queue! crazy!
I also have airbnbs that have lost a lot of money on cancelled bookings, a loan would be amazing.
Hi Roy, Wow - that's a long queue!!! Sorry, but this site does not allow phone numbers to be posted.
I wanted to add that to get the normal loan with usual terms (3.75% interest, no payment for 12 months) the person helping me just wanted to know my gross revenue for the year 2019. She asked if I had done my taxes and I said "no", so she figured out the loan based on the numbers I gave her. I believe they are under direction to make this as easy as possible, so don't have a heart attack when the usual red tape doesn't show up. I've also been finding that EVERYONE is nicer to deal with right now. It's amazing to see what we are capable of in tough times.
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
6y
This reminds me of taxes. Lot of people would rather pay $100 [turbotax] to get done for them, or at least streamlined. Big side hustle money. You're welcome.
Denham Springs, LA · Member since 2015 · 133 posts · 35 votes
6y
@David H. what does it specifically say about the PPP not being available for people that don't have a payroll? Here is the bullets from the US chamber of commerce . The 8 week expenses would not be marginal to me. I would prefer the grant but this is enticing. I do think the eligibility info for the two sba offerings often gets mixed.
You are eligible if you are: • A small business with fewer than 500 employees • A small business that otherwise meets the SBA’s size standard • A 501(c)(3) with fewer than 500 employees
the next two look like it could be for business owners with no employees
• An individual who operates as a sole proprietor • An individual who operates as an independent contractor • An individual who is self-employed who regularly carries on any trade or business • A Tribal business concern that meets the SBA size standard • A 501(c)(19) Veterans Organization that meets the SBA size standard
@David H. what does it specifically say about the PPP not being available for people that don't have a payroll? Here is the bullets from the US chamber of commerce . The 8 week expenses would not be marginal to me. I would prefer the grant but this is enticing. I do think the eligibility info for the two sba offerings often gets mixed.
You are eligible if you are: • A small business with fewer than 500 employees • A small business that otherwise meets the SBA’s size standard • A 501(c)(3) with fewer than 500 employees
the next two look like it could be for business owners with no employees
• An individual who operates as a sole proprietor • An individual who operates as an independent contractor • An individual who is self-employed who regularly carries on any trade or business • A Tribal business concern that meets the SBA size standard • A 501(c)(19) Veterans Organization that meets the SBA size standard
Hi Chad,
The PPP loan is not eligible for rental property owners as far as any of the banks have been made aware at this point.
The PPP loan may be eligible for sole props with no employees, but not rental property owners.
If you have a small business that isn't a rental, sure go for it. I can tell you upfront that the PPP loan is going to be a struggle and the loan forgiveness is based primarily on payroll so I don't see the point in taking that loan if you have no payroll. Especially since the PPP loan is a 10 year term as opposed to a 30 year term. Granted the PPP is completely unsecured, but again, its not eligible for rental property owners, so not relevant for the majority of this website.
Hi Roy, Wow - that's a long queue!!! Sorry, but this site does not allow phone numbers to be posted.
I wanted to add that to get the normal loan with usual terms (3.75% interest, no payment for 12 months) the person helping me just wanted to know my gross revenue for the year 2019. She asked if I had done my taxes and I said "no", so she figured out the loan based on the numbers I gave her. I believe they are under direction to make this as easy as possible, so don't have a heart attack when the usual red tape doesn't show up. I've also been finding that EVERYONE is nicer to deal with right now. It's amazing to see what we are capable of in tough times.
This is incredible insight. Thank you!
Please everyone read this before freaking out to much over the paperwork.
Real Estate Agent · Heber, UT · Member since 2016 · 56 posts · 46 votes
6y
We are soooo conflicted on whether or not to apply for this! We currently have another SBA loan in process for the purchase of a commercial property, but we hold 50+ units as part of another business that will undoubtedly get flogged by this crisis. Our SBA lender for the loan in process said he'd be wary about applying for disaster relief because it could look bad...but that potential 10K grant alone would really help right now. Not sure what to do at this point. :(
Rental Property Investor · Friendswood, TX · Member since 2010 · 663 posts · 508 votes
6y
@David H. I think a big thanks from a lot of people on bigger pockets for you posting here with your expertise on this product and fielding questions and bringing it to peoples attention you probably deserve more than a few pats on the back thank you David for sharing this information with the community