Let's discuss the Heroes Act - Are you worried?

Property Manager · Lakewood, OH · Member since 2015 · 250 posts · 258 votes

So, like many of you, I recently heard about and read some of the Heroes Act legislation.

It's fantastic that the government is attempting to help everyone, but, honestly, am I the only one that's worried about this?

If rent goes to zero for 12 months, I would still be responsible for

-Water bills in buildings that aren't separately metered

-All repairs; roof, furnace, water heaters, appliances

-Landscaping and other services

-Fuel to and from properties

-Equipment maintenance

-Taxes and insurance for properties that aren't mortgaged

-Any legal fees

-Property management software fees

Am I looking at this wrong?

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Michael Lamando

Member since 2020 · 7 posts · 17 votes

This is the most complicated insanely written piece of garbage with respect to handling the housing situation ever written. There is nothing written to prevent people from freeloading. With the stimulus checks and the boosted unemployment, the tenants that had any rights of complaining that they don't have enough to pay the rent are making more money than they ever did in their lives. If they want tenants to have free rent then the government should pay the landlords directly for the rent No documentation required, rather than pretend that forbearance is the solution.

Forbearance doesn't pay for the plumbers to auger out paper towels being used as toilet paper. There needs to be language that clearly requires "Proof" that tenants are not receiving enough income from the stimulus checks and boosted unemployment with comparison to their original job. There must be documentation requirements. To say that tenants are at risk of losing their housing, while simultaneously saying that tenants can not be evicted for not paying rent is insane.

If they are going to let tenants live for free in buildings that are owned and maintained by real people and not the government then they need to take away the stimulus checks, and the boosted unemployment and tell tenants that they can have one or the other, but not free rent, AND stimulus checks and an extra 600 per week, my God!

When all is said and done, the tenants that have saved up money freeloading for a year should have to pay the back-owed rent as a lump sum or have the judge stop the pain cycle immediately and give the landlord his unit back. The administration of this bill will cost a fortune and take months to implement. I can't imagine how a 1000 unit apartment building could survive without rents. Stop the cranes.

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Karl B.
Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes
6y
I watched a Meet Kevin video and learned about the Heroes Act. It sounds like the most ridiculous thing ever.

Personally, I have good tenants who work and I'm confident all of them will continue to pay rent so I can pay my mortgages.

But for landlords as a whole - yes - if this happens it's quite worrysome. It boggles my mind.

0 Reply
Anthony R.
OP
Property Manager · Lakewood, OH · Member since 2015 · 250 posts · 258 votes
6y
Well at least I know I'm not the only one concerned. Though, not exactly the response I was hoping for.

The correct answer was "Com'mon Anthony, don't over react. Rentals will actually produce double rent and everything will be fine"

¯\_(ツ)_/¯

1 Reply
Joshua Ferrari
Rental Property Investor · Mobile, AL · Member since 2018 · 121 posts · 136 votes
6y

@Anthony R.

This is all I'm seeing under the HEROES Act. Nothing about non-rent payments. That was the Rent & Mortgage Cancellation Act, which likely won't pass.
0 Reply
Terry McPhersonPro Member
Investor · Greenville, KY · Member since 2017 · 16 posts · 3 votes
6y
Yes very worried. Seems good in the short term. Long term not so much. Ken McElroy has some excellent youtube video’s on some of the things going on now.
2 Reply
Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y
I guess I should not be shocked that some people in government have so little respect for private property ownership that they can commandeer property and infringe on contracts entered into by persons of legal age. On the flip side just because you can't evict does not mean a tenant won't pay rent. It takes a freeloader mentality for a tenant to 'stop rent' and it takes a 'freeloader enabler' mentality for a politician to need or want to buy that vote-with tax payer money- and unfortunately we have some of both in increasing numbers. I guess we need to add a line or two to the screening process.
3 Reply
Derrick Dill
Investor · Hawaiian Gardens, CA · Member since 2015 · 308 posts · 386 votes
6y
There are lots of proposals for lots of things. First it goes through (step 1)house, then senate, then presidents signature. It hasn't passed step 1 yet, or even closed to passing step 1.
4 Reply
Doug Wilson
Financial Advisor · Austin, TX · Member since 2018 · 4 posts · 5 votes
6y
This act is an 1800 page behemoth that has a roughly 0% chance of passing the Senate, much less being signed by the President.
4 Reply
Caleb Heimsoth
Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
6y
@Anthony R. I’m with @Doug Wilson. This won’t pass at all. Take some deep breathes. No way this passes ever.
2 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
6y
When I told my adult children that I was not the stimulus package, I thought I was joking...
4 Reply
Calvin Thomas
Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
6y
Yes, I am sure all the rental property owners in the US Congress and The White House are looking to waive any rents that they receive for the next 12 months.
3 Reply
Austin Brewer
Realtor · Member since 2018 · 9 posts · 3 votes
6y
@Anthony R. One thing on there that does scare me is the unemployment extension. It may have been good for a short term but by extending it to January I believe may encourage people to keep getting the benefits instead of going back to work.
1 Reply
Jeffrey Boyce
Investor · San Mateo, CA · Member since 2018 · 34 posts · 14 votes
6y
Following this convo.

@Joshua Ferrari - looks like the rent and cancellation act you're referring to is actually bundled into this Heroes Act: https://docs.house.gov/billsthisweek/20200511/BILLS-116hr6800ih.pdf (jump to page 961 for the start)

If this passes it indeed has pretty significant ramifications on the real estate industry. As an investor - I'm of course hoping against the way its packaged but one has to wonder what will happen if its made it this far to be presented to the House. Although mortgages and rents can be frozen for a year, property owners are still on the hook for the things @Anthony R. mentions in addition to the general wear and tear that happens over the course of a year. As a real estate investor, your investments are essentially 'frozen' for a year while many of your expenses still exist.
Hope they'll make revisions by considering the consequences on the real estate industry while also accommodating the millions who've lost their jobs.
3 Reply
Michael Lamando
Member since 2020 · 7 posts · 17 votes
6y
This is the most complicated insanely written piece of garbage with respect to handling the housing situation ever written. There is nothing written to prevent people from freeloading. With the stimulus checks and the boosted unemployment, the tenants that had any rights of complaining that they don't have enough to pay the rent are making more money than they ever did in their lives. If they want tenants to have free rent then the government should pay the landlords directly for the rent No documentation required, rather than pretend that forbearance is the solution.
Forbearance doesn't pay for the plumbers to auger out paper towels being used as toilet paper. There needs to be language that clearly requires "Proof" that tenants are not receiving enough income from the stimulus checks and boosted unemployment with comparison to their original job. There must be documentation requirements. To say that tenants are at risk of losing their housing, while simultaneously saying that tenants can not be evicted for not paying rent is insane.
If they are going to let tenants live for free in buildings that are owned and maintained by real people and not the government then they need to take away the stimulus checks, and the boosted unemployment and tell tenants that they can have one or the other, but not free rent, AND stimulus checks and an extra 600 per week, my God!
When all is said and done, the tenants that have saved up money freeloading for a year should have to pay the back-owed rent as a lump sum or have the judge stop the pain cycle immediately and give the landlord his unit back. The administration of this bill will cost a fortune and take months to implement. I can't imagine how a 1000 unit apartment building could survive without rents. Stop the cranes.
5 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
Simple solution to help people and comply with the constitution is to have the federal government cut rent checks directly to landlords. Make people prove hardship and administer the payments directly to the landlord, like they do with section 8. This isn't rocket science...
4 Reply
Anthony R.
OP
Property Manager · Lakewood, OH · Member since 2015 · 250 posts · 258 votes
6y
Instead of canceling rent and sending hundreds of billions of to big corporations, they could provide a small subsidy to all Americans for a few months so that they can pay their rent while this is going on.
Then the system continues to function and no one gets wrecked. I guess that's too complex of an idea though.
0 Reply
Nicole Heasley Beitenman
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
6y
Originally posted by @Anthony R.:
Instead of canceling rent and sending hundreds of billions of to big corporations, they could provide a small subsidy to all Americans for a few months so that they can pay their rent while this is going on.
Then the system continues to function and no one gets wrecked. I guess that's too complex of an idea though.

Yeah, maybe a small business loan like a Paycheck Protection Program or an Emergency Injury Disaster Loan! Oh, wait, they gave all that money to large, publicly traded corporations like Potbelly.

1 Reply
Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
Originally posted by @Nicole Heasley Beitenman:
Originally posted by @Anthony R.:
Instead of canceling rent and sending hundreds of billions of to big corporations, they could provide a small subsidy to all Americans for a few months so that they can pay their rent while this is going on.
Then the system continues to function and no one gets wrecked. I guess that's too complex of an idea though.

Yeah, maybe a small business loan like a Paycheck Protection Program or an Emergency Injury Disaster Loan! Oh, wait, they gave all that money to large, publicly traded corporations like Potbelly.

To be fair, tons went to small businesses too. There is even landlords on here that had experienced no hardship and got money. The problem with these programs is they let businesses self declare hardship. With nobody vetting anything, the fraud is overwhelming. Of course there is not time or resources to verify, so I get it.
To play devils advocate, we need to rescue some big businesses like airlines. Letting some of these businesses fail would have devastating long term effects. Yes they should have put money in an emergency fund instead of spending it on stock buybacks, but everyone wants their 401K to increase in value. It is easy to hate big business, but they are owned by our friends and family through stock market investments.
2 Reply
Anthony R.
OP
Property Manager · Lakewood, OH · Member since 2015 · 250 posts · 258 votes
6y
@Joe Splitrock I think we should let the free market command itself honestly. If that means that some companies, big and small, fail then so be it. That's rough but if 99% of businesses are in this category, all of us included, then maybe Delta, and United, and American Airlines should be too. It wouldn't be the first time an airline went under.
I don't see the feds rushing to save my rental business which took me 10 years to build. Despite the fact that it has provided affordable, well maintained housing to the people, accounts for a huge portion of my net-worth and would be devastating to my family if lost.
I don't think the feds give a **** about us. If anything, this crisis has made that abundantly clear. We, as property managers, are on our own when things go sideways.
The feds turn their back, the banks provide no support, and the people want our blood.
2 Reply
Jeffrey Boyce
Investor · San Mateo, CA · Member since 2018 · 34 posts · 14 votes
6y
Its easy to get caught up with a negative outlook if this passes as its stated verbatim but unless you're a legislator or politician who can take a vote or help amend the bill, its best to begin planning ahead on how to best handle the various scenarios if it goes through. Would it be devastating and frustrating for property owners? Absolutely. But i'm more curious to hear of solution-oriented proposals and thoughts if you have a big contingent of tenants not paying. I guess accepting forbearance is the only option unless you can handle all of the mortgages? Or is it?
0 Reply
Anthony Wick
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
6y
@Anthony R.
I’m not worried at all. I’m also not believing that people will receive $2,000 a month (back dated to March) until the pandemic is over. Just Negotiation tactics.
1 Reply
Anthony R.
OP
Property Manager · Lakewood, OH · Member since 2015 · 250 posts · 258 votes
6y
@Anthony Wick yeah I agree that a lot of this is far fetched - I usually ignore these bills but there's a lot of support around this one so I'm curious what will get trimmed

@Jeffrey Boyce I've analyzed our position and I decided that the moment tenants start skipping out on rent, I'll take all the forbearances I can. If I can take them all, my expenses drop 75% and I can last for something like 6 years on what we have in saving right now lol

I wouldn't continue to rent to people though. Each tenant that invoked this no rent privilege wouldn't get their lease renewed. I may not be able to evict them, but nothing says I have to provide them free service indefinitely
0 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
6y
If you operate your business based on what politicians may or may not do, you're going to have a difficult time as a Landlord.
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1 Reply
Michael Lamando
Member since 2020 · 7 posts · 17 votes
6y
Just got a text from my cousin in FL. He says Senator Rick Scott says it’s DOA in the senate. Thank god. Maybe if they just get rid of all the red tape and stimulus and unemployment boost and forbearance and just pay landlords directly for tenant rent and homeowners mortgages so long as they can prove covid policies or the disease itself has taken their job income away.
0 Reply
John C.
Member since 2018 · 50 posts · 39 votes
6y
Has anybody thought about shifting to month to month leases so that if a tenant stops paying rent they can choose to not renew? Then give 30 day notice of non renewal on the 2nd if rent isn't paid.... Not mentioning any particular reason.... In theory this would only delay evictions by a month...
1 Reply
Anthony R.
OP
Property Manager · Lakewood, OH · Member since 2015 · 250 posts · 258 votes
6y
@John C. yeah that's going to be our strategy if we get forced down this route
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