All Forum Posts by: Mark S.

@Kevin Knight, did you read your SBA loan documents?  Assuming you’re talking about an EIDL, the money is not to be used in this way.  

@Wayne Brooks, I believe I read that somewhere about the ability to transfer to SMLLC as long as loan was originated after a certain date (within past few years).   Was it Freddie, Fannie, or both?  That’s the part I don’t recall.  

@Paul Ellerbusch, I have my title company quitclaim from my personal name to my SMLLC after closing. If LLC is on the lease, you'll likely want the LLC to own the property as well (even if loan is still in your personal name). That's been my experience anyway.

@Tim Silvers, lots of ambiguity in the contract language.  On the one hand, it’s difficult to get oneself to sign it; on the other hand, it seems like they just went overboard on the language to protect themselves and at the end of the day as long as you spend the money on normal operations of running your business, I would guess we’re all fine.  There are people on here stating they’ve taken the loan and then asking “now what?” as far as what to spend it on.  Crazy.  My plan would be to keep the funds separate and use those funds to make normal mortgage payments (not refinance, not large principal paydowns, not acquisitions, etc.).   Making those regular mortgage payments allows me to stay afloat and keep my properties.  Some tenants are starting to fall behind.  I don’t think we’re out of the woods yet.  The question I’m essentially asking myself is whether or not I want to be a hero and put the burden solely on myself/my existing reserves if things get much worse and be “too scared” to sign documents with some strong, yet ambiguous, language, or do I want to put my big boy pants on, take it in good faith, use it for its purpose, and be glad I have it if you know what really hits the fan even worse?  That’s essentially my dilemma.  

I have an inquiry into my mortgage officer as to whether or not taking the EIDL will hinder me from qualifying for any additional investment property loans in the future (other than the obvious change to my DTI ratio). Surely I'll buy another rental in the next 30 years. If he gives the green light, my bias leans even further toward signing the documents.

@Shefali Rai @James Allen

Guys,

Any updates on your end?

@Donna Pattani

Any updates on lump sum vs installments on the loan disbursement?

@Tim Silvers

I ran some quick numbers and it appears to match standard time value of money (TVM) calculations (assuming deferral of interest in year 1 and then amortized over 29 years). It was within a few dollars a month of the monthly payment mentioned on the documents.

Are you going to take the loan? I’m still scratching my head.

@Linda Weygant

Would you consider making mortgage payments on rentals a reasonable and intended use of the funds? Some are saying it can’t be used for long-term debt, but I think they mean paying down (accelerated) or paying off completely. I’m talking about regular monthly mortgage payments.

Depends on your goals. We'll all have healthcare-related expenses down the road. With that said, HSA is a no-brainer if you're on a high deductible plan (and even better if your company provides some employer funds). Roth IRA is also fantastic. These are probably two of my favorite account types. I would generally say both. If it's one or the other, and you know you won't need access to the funds for a long time, HSA all day.

I agree with @Edward Liu.  Inspection $ is almost surely the best money you’ll spend.  My inspections (on my turnkey rentals) always finds items that the seller repairs at their cost.  This has always been more than the nominal cost of the inspection.  

@Jason Monaco, yes and yes so far.  Why do you ask?