Rental Property Investor · Chicago, IL · Member since 2019 · 25 posts · 29 votes
I just acquired a 6-unit building December 31, 2019 on the south side of Chicago, the plan is to rehab and refinance so I have a one year short term loan. I ran into some tenant issues with squatters that has slowed down the rehab process, so far I have only completed two units and the roof. Last week finally the police removed the squatters. Now that I have finally gotten the tenants out and I am ready to finish up the process, yet now comes the Corona Virus. So the question is, will the loan company grant me a forbearance during this corona virus national emergency? The building is not generating any income as I have no tenants. With this virus emergency, even when I finish the rehab, I have no clue as to when I can market the units as available rentals. I have written the investment firm and I am waiting for a response. Is anyone else facing this? Is your bank working with you? Will investment firms grant forbearance on rehab loans as the state is mandating a stop on paying rent, mortgages, and foreclosures?
Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
6y
@Michael Taylor I think you are feeling and experiencing a-lot of what everyone is facing at the moment....uncertainty. I think it will boil down to the state and federal mandates that come down in the coming weeks surrounding that Corona Virus, I also know there are a-lot of Small business loans floating around. A skin care company I consult with here in Columbus OH is currently applying for a substantial business loan to help them prepare to scale this next year. It could be worth researching if there are any new, or alternative options for your financing because of the coronavirus because you may be able to qualify for a "relief" loan of sorts that could have better terms than what you're in right now.
Regarding your tenants and advertising the property after your project is done, its not going to be constructive to sit here now and try to play the "what if" game for after the virus. All you can do is plan based on the data you have regarding rents and vacancy rates for your area. For all we know there will be a huge influx of people looking for housing when this is over so your rents might even end up increasing due to demand.
Don't get caught up in the hype and worry. Concentrate on the facts, and the data you have. If you did your homework its a good deal, and it will still be a good deal after the virus is over. We are in unprecedented times and their will be unprecedented measures from the government, stay flexible, stay calm, and stick to the data.
Rental Property Investor · Chicago, IL · Member since 2019 · 25 posts · 29 votes
6y
Michael, thanks for your reply. The planet did actually go through this before in the modern era, the 1918 Spanish Flu Pandemic that spread around the world. My guess is that there is not enough available information from that period to know, but I wonder how did we recover from that? About 675,000 Americans died from that pandemic that lasted over a year. I don't know how it affected the markets, but after that came the roaring 20's. Just wondering what specific recovery measures were in place after that for the real estate market? Thanks again.
I just acquired a 6-unit building December 31, 2019 on the south side of Chicago, the plan is to rehab and refinance so I have a one year short term loan. I ran into some tenant issues with squatters that has slowed down the rehab process, so far I have only completed two units and the roof. Last week finally the police removed the squatters. Now that I have finally gotten the tenants out and I am ready to finish up the process, yet now comes the Corona Virus. So the question is, will the loan company grant me a forbearance during this corona virus national emergency? The building is not generating any income as I have no tenants. With this virus emergency, even when I finish the rehab, I have no clue as to when I can market the units as available rentals. I have written the investment firm and I am waiting for a response. Is anyone else facing this? Is your bank working with you? Will investment firms grant forbearance on rehab loans as the state is mandating a stop on paying rent, mortgages, and foreclosures?
Regarding marketing the property as the units become available, the answer to that question is yes. Real Estate is considered an essential service in the State of Illinois & at the time I'm writing this, is exempt from the Stay At Home Order. What we've done for our clients is virtual tours of properties. This includes clients who are looking for apartments or homes to rent.