How are you coping during this time?

33 Replies

Some people are really struggling with the market and how Coronavirus may impact their personal lives, their investments, or even the entire country. We can't control the economy. We can't make much impact on unemployment rates, government response, or the price of tea in China. Heck, I can barely maintain my own work schedule!

So what are you doing to protect the things you do have control over? How are you protecting your family? Your income? Your investments? Your renters?

@Nathan G. We are encouraging family members to stay isolated at home. That includes our youngest daughter who lives in Barcelona. Lots of family Skype calls. I hope all my tenants are doing well-I tend to leave them alone, I am just a LL after all. Reserves are covered in case of an emergency. Pretty soon there should be some buying opportunities coming up. I have had enough of the 5 caps!!

I don't watch the news...I watch the actual news conference.

I read actual reports, and not interpretations.

I realize that any economic impact on purchases, business, investments, etc...aren't based on an economic problem, they're based on a temporary medical problem.

I firmly believe, the medical problem will be solved in a short enough period of time and will not have any long term major negative impact on the economy.

I know that when the "hounds are released", any negatives that might have happened to the economy, will bounce back and head north faster than it went south because of a built up demand...and the fact that this problem wasn't ecomonically based in the first place.

Originally posted by @Bjorn Ahlblad :

Pretty soon there should be some buying opportunities coming up. I have had enough of the 5 caps!!

I have a very healthy account right now and am poised to snatch up some deals if the opportunity presents itself! I don't wish hardship on anyone, but I won't shy away from the opportunity, either.

 

@Nathan G. I just posted moments ago how I got two different 4 plex owner carries to lower their rates on a loan modification, as well as one removing a balloon payoff in 8 years. I also got a seller of a fixer house to lower the price $25,000 while under contract currently. So, those ways are how I combated this virus so far, but moving forward my sales commission W2 will get hammered and my college rentals is my biggest fears. IF colleges do not show positive signs of reopening, but 9 vacancies for July 1 to fill to get rough in May when I book them up. I have plenty of reserves, but my stock portfolio......well! 

Originally posted by @Todd Powell :

@Nathan G. I just posted moments ago how I got two different 4 plex owner carries to lower their rates on a loan modification, as well as one removing a balloon payoff in 8 years. I also got a seller of a fixer house to lower the price $25,000 while under contract currently. So, those ways are how I combated this virus so far, but moving forward my sales commission W2 will get hammered and my college rentals is my biggest fears. IF colleges do not show positive signs of reopening, but 9 vacancies for July 1 to fill to get rough in May when I book them up. I have plenty of reserves, but my stock portfolio......well! 

I suspect colleges are done for the year. These were my first casualties: two apartments with students and one with a student teacher.

 

Originally posted by @Todd Powell :

@Nathan G. I just posted moments ago how I got two different 4 plex owner carries to lower their rates on a loan modification, as well as one removing a balloon payoff in 8 years. I also got a seller of a fixer house to lower the price $25,000 while under contract currently. So, those ways are how I combated this virus so far, but moving forward my sales commission W2 will get hammered and my college rentals is my biggest fears. IF colleges do not show positive signs of reopening, but 9 vacancies for July 1 to fill to get rough in May when I book them up. I have plenty of reserves, but my stock portfolio......well!

Now that is being proactive good for you.. we see a lot of folks on BP worried and are frankly in my opinion relying too much on the tenant and their lease.. and not doing enough with their own debt like you just did..  I had a nice 45 minute call last week with my banker in Oregon and checked in with my two in South Carolina.. my construction loans are still happening.. 

I had a buyers agent try the Hey knock the price down becasue of this.. he kept going on about like the GFC.. I said well we own it free and clear this is our price and they met it.. but they tried hard :)  

So far its business as usual we nailed a smokin deal in Vegas on Friday.. right off of MLS big price drop and then we offered 5% lower than that all cash close as soon as escrow can get it done and as is where is.. we had our contractors through it the same day.. so speed and cash are going to work in this market as well.

I just really hoping that all the stim money that our work force folks who are without jobs right now will do the right thing and pay their landlords maybe not full rent but as much as they can..and not just pocket it and move on. I fear a lot of that is going to happen in the lower end rental world.. where those folks are pay check to paycheck and are very accustomed to moving annually and or frequently. 

 

@Nathan G. I totally agree that colleges are shut down through June school year, but the bigger picture is IF I cannot fill them during my normal May timeline for July 1 for the following school year that begins in Sept.  IF this virus gets bigger, I will be in worse trouble if students are still online?

@Jay Hinrichs my son said, "dad, you have bigger ba*** than I thought you did."  I said, "Son, you have to act when blood is in the streets."  I felt this was an opportunity to actually refinance, or better yet, get my owners to adjust the terms. It would have cost me 1.75% each 4 plex in rate, appraisals, and of course standard escrow and titling fees.  My way it cost me ZERO and I achieved this within weeks and my note holders were thankful I did not pay them off. The 8 year balloon I would have dealt with, but probably not the one already at 4.75%. Hey, he who speaks first loses! 

Originally posted by @Todd Powell :

@Jay Hinrichs my son said, "dad, you have bigger ba*** than I thought you did."  I said, "Son, you have to act when blood is in the streets."  I felt this was an opportunity to actually refinance, or better yet, get my owners to adjust the terms. It would have cost me 1.75% each 4 plex in rate, appraisals, and of course standard escrow and titling fees.  My way it cost me ZERO and I achieved this within weeks and my note holders were thankful I did not pay them off. The 8 year balloon I would have dealt with, but probably not the one already at 4.75%. Hey, he who speaks first loses!

people that hold notes can be really funny that way.. at first they are nervous did they do the right thing being the bank.. then you pay them for a few years and they get hooked on the easy mail box money.. then you tell them your going to pay them off and they are like NO NO dont do that.. I would only get 1% in the bank and this way I know i have basically a 100% safe investment with this property as collateral and you as a payor.  

 

My wife and I are teachers so we get to be home with our 4 y/o son. Here is what I have been doing for the past 1-2 weeks.

1. Tapped HELOCs just in case the lender decides to freeze. I'll pay the interest as "insurance" for the peace of mind knowing that I have ample reserves to cover tenant defaults (and be ready for a buying opportunity).


2. Sent the Brandon-esque email to tenants. No response. Most of mine are yuppies still earning income from home (like me). I'm predicting 80% pay with no issues, hopefully that doesn't get worse in May.

3. Built storage shelves in our basement.


4. Built a raised garden bed in the backyard.


5. Going to deep clean the interiors of our vehicles. My wife is doing the spring cleaning/organizing early this year.

6. Going to touch up paint where needed. We have a lot of mini hand prints and small drywall repair spots. The kid broke a corner bead with his knee while running!

7. Going to paint the front of our rowhome's bay window and roof cornice details with 2 colors.

8. Going to continue grilling a lot of meat, drinking coffee, and drinking beer. We've had some rainy days but a lot of nice ones as well.

9. Going to perform small maintenance tasks on the rentals myself as they come up instead of hiring it all out. Today I installed new deadbolt strike plates on the front/rear doors of a college rental. The tenant had heard about a lot of recent break ins (now that most students went home) and was worried.

10. And most important of all - STAY SAFE! I am making no more than 1 trip out of the house per day (other than outside rec time with the family at the park). And when I do I rock that homemade (by mom) face mask that gets washed daily, plus use that hanitizer and frequent hand washing. Make the best of it. Enjoy time with the family. And tackle that honey-do list at my leisure. 

@Jay Hinrichs You nailed it EXACTLY! The only thing they did not like, was what if rates go up down the road? Yup, we cant have it both way can we, but they like my payment history and also how I dumped massive cash into their old dogs. Its a pretty easy deal for them being the bank. 

Originally posted by @Todd Powell :

@Jay Hinrichs You nailed it EXACTLY! The only thing they did not like, was what if rates go up down the road? Yup, we cant have it both way can we, but they like my payment history and also how I dumped massive cash into their old dogs. Its a pretty easy deal for them being the bank. 

Been working with that personality since the mid 80s those that hold notes get addicted its like financial crack

 

Originally posted by @Nathan G. :
Originally posted by @Todd Powell:

@Nathan G. I just posted moments ago how I got two different 4 plex owner carries to lower their rates on a loan modification, as well as one removing a balloon payoff in 8 years. I also got a seller of a fixer house to lower the price $25,000 while under contract currently. So, those ways are how I combated this virus so far, but moving forward my sales commission W2 will get hammered and my college rentals is my biggest fears. IF colleges do not show positive signs of reopening, but 9 vacancies for July 1 to fill to get rough in May when I book them up. I have plenty of reserves, but my stock portfolio......well! 

I suspect colleges are done for the year. These were my first casualties: two apartments with students and one with a student teacher.

 

 By the year, you mean for the academic year, not calendar year.  We are working on setting up online exams for April, so there is no chance of classes starting (next week is our last week of classes where I am).  As far as we are concerned, the rest of the semester is online.  Universities have also cancelled graduation ceremonies normally held in May.

I'm ok, I sold my last project on Thursday. That had me nervous and I learned a good lesson on how much capital of my own to have tied up in a deal. Business wise things are done until we can get outside and do things, tenants... I'd guess 85% can pay and I'll work with the ones who can't. 

For me I'm finding this hard as I think the nation as a whole is going to suffer terribly through this. We aren't built to look after people not working, our healthcare system isn't up to the task either. I feel sad, scared and embarrassed that this wasn't taken more seriously early on and that so many Americans will lose their livelihood and some their lives.

-My wife and I are among the fortunate ones who can telework. 6 of our 8 tenants can do the same. I have already begun receiving rent via Zelle from a few. I don't foresee any issues on the rent front for now, but from 2 of my inherited, grandfathered, rent-stabilized tenants. We have a good line of communication and they are very appreciative of where they live- so I don't fear the "decided not to pay." If they run into problems I would have no issues with adjusting future rent to cover a short month or two.

-I am able to save some money to be around for our 1 apt. renovation, so that is good. And while at the buildings it seems like business as usual except a lot more laundry getting don... go figure... Love my quarters! Inspections are still taking place- so finishing up our roughs.

- I cover water and gas for heat, so I am expecting those expenses to be a bit higher as tenants shelter in place. Especially water as it is quarterly and already through the roof.

-My greater concern is for the economic future. I was fortunate enough to move my 401k out of the market when I saw this coming back in February. For 2 days I thought maybe I was nuts and the rest of the world knew something I didn't. After this past week I am feeling the same way- I am afraid it is going to get worse.

- I think the 401k adjustments in the stimulus package should give a lot of W-2 landlords some breathing room, seems like a big break and will allow them to cover expenses.

*** I do believe we all need to look at what Sweden is doing right now. I read an article this morning in the NYTimes and they are alone in not shutting down their economy, not pulling the young children from school... ski slopes are open, cafes are open. Everyone is exercising social distancing and handwashing- but not putting people and business out of work. I can tell you, as someone close to the epicenter- it is a complete farce to shut down a coffee shop but leave open a grocery store. Or better yet- let a separate coffee shop in a grocery store remain open! My elderly parents and at risk neighbors are sheltered and quarantined in, but shutting down one business over another is just stupid.

*** And can we get someone on the mic letting people know that we landlords are the great guys and gals in all of this! We are the one institution that didn't let them down.

I just released one of my rentals. I have work going on at 2 properties.

I also have some cash and am.looking for some opportunities.

I am working on one now where the owner is in prison and an attorney has POA for the convict. Trying to get a really low price as house has been vacant for some time.

Working from home on my day job.

Carrying an as usual by rehabbing a property. Today I did some maintenance on our own place such as fixing lights in the garage, working on the compressed air system in the shop, installing some tool hanging brackets, repairing extension cords, fixing a rototiller, etc. I'm concerned about the rents that are due in just a few short days. Other than some occasional tree work, rentals are our entire income. No W-2 or pension, just rents. So this next week is going to be a nail biter.

I was working on my vacation rental today. Should have it ready by end of April. Our tourist season is short and heavily dependent on Yellowstone National Park. I still expect to at least cover my expenses. 

It's a long game.


I wake up, put on "Riding the Storm Out" by Illinois' very own REO Speedwagon (lol, I just realized that's gonna trigger for those who have the keyword REO for "real estate owned"), write my affirmations, remind myself I got this, and start my day.

Control what I can control and make my decisions based on the long-term horizon.   

I'm still working as much as I can as an agent, and have been submitting lots of offers. There's a little delta between what investors are looking for right now and what sellers still expect, but I think in a few more weeks they'll be hitting. I only had one deal fall out of contract. I think this will actually be a great year on the agent side, because I only work with investors. I also expect an increase in new property management clients, as people move, but wait to sell. I'm working a lot less, because I'm now homeschooling my 6 year old. That's the only real struggle. My wife still works full time in healthcare.

We moved 100% of our stocks to cash in January. I didn't predict this specific issue, but felt like there were a ton of potential shocks this year. I've never been a big fan of stocks anyway, and didn't have a lot of money in there. We will be reinvesting that cash into real estate locally this year. Even if there isn't much of a correction in real estate (which I'm not expecting here), I think it will be a better long term play than stocks.

We've been building our cash reserves for several months. I've also opened several new credit cards in the last couple weeks. I don't expect to use these, but I know it's better to have credit available before you need it. I have financed rehab work with CC before, and will happily do it again, if it's my only option. I'm expecting to be much more active on my own account this year. 

I don't believe there is much I can do to be sure my tenants pay rent, but we'll be fine if we don't get it for a few months. I have been researching resources to share with them, as well.

@Nathan G. - good discussion! Regarding family, I’m married with 2 preteen kids who are now virtual learning like everyone else. For us, we’ve been maintaining our normal schedules with getting up like a normal school/work day to keep a routine. We’re not leaving the house, except for groceries, but keeping as much of a normal schedule as possible keeps the kids balanced. My income is from my W2 job, which just enacted temporary 30% pay reductions. I’m confident I’ll remained employed as a solid/proven revenue generator for the company. Our monthly expenses are closer to 50% of my income so we’re really just saving less. That was a conscious decision we made several years ago when we started having kids...thank God for that wisdom being given to us when we were younger HA! As for my rentals a big decision we made thanks to reading this site was to maintain healthy reserves! That alone was worth its weight in gold and lets me sleep at night. We also stay in touch with our PM company and let them know we would work with tenants who lost income. Hopefully the passed stimulus will help tenants with rents and not new big screens, HA! Thanks for the question as I’ve enjoyed reading the replies.

@Nathan G. If you are employed at a W-2 job, now is a good time to start making yourself irreplaceable as companies will be making tough decisions in the coming months.

If you are an investor, you want to be prepping to buy a lot or as much as possible as prices will go down in the coming months or years as the recession fully sits in.

Originally posted by @Patrick M. :

-

-My greater concern is for the economic future. I was fortunate enough to move my 401k out of the market when I saw this coming back in February. For 2 days I thought maybe I was nuts and the rest of the world knew something I didn't. After this past week I am feeling the same way- I am afraid it is going to get worse.

AGREED with pulling money out of 401 K / Stocks.  Not sure why it was up so much this past week, seems like major smoke and mirrors.  

So many strange things happening so quickly with markets... lots to study and make strong decisions in the coming weeks and months.