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 don't see a spot to upload any documents during the application. Am I missing this or will they request this at a later time?
Hi Derek,
I believe they are requesting it at a later time. To streamline the process and get the grants out the door they rearranged the application process. From my understanding a case manager will reach out to you if more info is needed.
I have rental properties and have a question on the EIDL disaster loan application.
What should I put for Business Activity? Real Estate?
Detailed business activity? Property Management?
Hi Andy,
I can't say for certain, though my best guess from looking at the application process would be to select real estate and the property management drop down. Though it likely would be fine to select the "other" or "not listed" option as well.
Unfortunately the application was largely designed for standard small businesses not rental property owners.
I had the same issue as @Derek Jones. They never asked for any documents to get uploaded.
Hi Steve,
Please see response just sent to Derek. The new process seems to have postponed the requirement for documents until after the initial "streamlined" review. Likely the SBA will reach out to you if more documents are needed. This process was created to get the $10k grants out the door quickly to those affected.
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.
Thank you for the reply David,
I FINALLY was able to get someone on the line, he said that the taxes shouldn't impact me but I had the feeling that the rep wasn't that knowledgeable. I did put an application and we'll see what happens, it's crazy that it's such a simple application that they're going to go by to approve or deny you, I feel I should have fudged the application so I could get approved then I can show the lending rep my "real" situation and have the rep determine if I qualify, which I would guess should be no problem with so many losses.
Rental Property Investor · Member since 2018 · 64 posts · 40 votes
6y
Is anyone able to verify on which entity structures are eligible? I see many people asking about this.
Is a single member llc reporting on schedule E (disregarded entity) eligible? It doesn’t seem to be an option on the application, just sole proprietor
Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
6y
Question is.. Since they are supposed to give the 10k within 3 days of submitting the application, will people who submit their apps today receive their 10k Thursday?
Investor · Cardiff by the Sea & Baja CA · Member since 2018 · 18 posts · 5 votes
6y
I applied for the 10k under both my wife's and my Corporation, I felt that was cleanest as opposed to my rental properties and their various entities. It's strange that the 2MM loan went away and was replaced by 10k that if I'm reading correctly doesn't need to be paid back?!
Property Manager · TX · Member since 2019 · 327 posts · 69 votes
6y
@David H. one of our restaurant tenant asked for help with April rent. We told them to check out SBA website and they said they can't take more loans. Can they still be eligible for the 10k grant? Or they have to apply for the loan in order to get the grant? Thanks!
Rental Property Investor · Albany, NY · Member since 2019 · 47 posts · 16 votes
6y
Can you guys tell me if this is a loan or a grant? I'm only interested if there is "forgiveness" attached to it. Otherwise, I may as well use our HELOC to get us through.
I have a question you. I am also a CPA and have rental properties in an LLC taxed as a partnership.
I am most concerned about the PPP. I have been reading your posts and it appears that you believe people who have rental properties will not qualify for PPP “forgiveness”. There was one slide today in our CPE that talked about people being able to use what they paid to subcontractors (issued a 1099) as the salary calculation. For instance in 2019, I paid 70,000 to subcontractors and issued a 1099. Have you heard of people using the PPP calculation in this method?
70,000 divided by 12 months x 2.5.
Of course when this slide came up in the cpe class I asked multiple questions about it and no one could answer me either way. People acted like they did not have enough information to answer the question. I am still doing research on this , but have you heard any insight on this.
Buffalo, NY · Member since 2017 · 62 posts · 56 votes
6y
I’m a small business owner “hvac company”, and I own a 4 unit rental, and a flip house that I’m focusing on currently. The 4 unit rental has 3 vacancy’s, the plan was to get it going for this spring but now I don’t see that happening but I wonder if I am eligible and if I can claim loss of income on the vacancy’s?
My understanding is that as a LL you are considered a sole proprietor if you own 100% of the rental property even if you use Schedule E. I could not find any information that restricts eligibility to earned income (Schedule C). Let me know if I am wrong.
I have few properties under LLC and few properties under my name and 1 under my wife's name. Do I need to apply 3 times or is it 1 loan per person or 1 loan per SSN/EIN? Thank you.
I am expecting a few months of lost rent but hopefully NOT eviction. Tenant is sitting at home for last two weeks.
I can float utility bills for the few months but a majority of my rental revenue goes towards property taxes.
If I lose a few month of rent, I am really worried about being able to pay property taxes when they come due. The grant wording specifies the following.
(A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;
(B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;
(C) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;
(D) making rent or mortgage payments; and
(E) repaying obligations that cannot be met due to revenue losses."
As a landlord, most bullets don’t apple.
I am not making the rent payment. I don’t have a mortgage payment. Would using it for to pay property’s taxes due to revenue losses be valid.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
6y
Update: I got an email, inviting me to apply for a $ 10K advance and which will not hold up or influence the application that I already filled out. This advance will be forgiven.