#105: Corona Virus Eviction and Foreclosure [Truths and Myths] with David Streeter

Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast.

Josh:  Hey, everybody, welcome back to Accelerated Investor. Josh Cantwell here with a special edition of our podcasting content, but I asked my attorney, my good friend David Streeter, who’s been a regular contributor of the podcast and that our live events at our Ohio Landlord Association and my personal attorney for many years to jump on and comment about what’s going on with foreclosures and evictions amid the Coronavirus. So, David, thanks for carving out a few minutes for us today. Absolutely. My pleasure. So obviously, David, there’s a lot of misinformation, I think out there, a lot of myths, but some truths about what’s going on with landlords and evictions, people who own rental properties. Obviously, that’s a big part of our portfolio and our students and our borrowers. Let’s talk about what we learned about. So why don’t we first talk about the truth? Like, what do we know as of today? And then we’ll get into some of the myths and the things that are probably out there that people are hearing that they need to kind of ignore or avoid. So tell me, what do you know as of today? What’s going on?

David:  Well, I mean, it’s funny. I would say that I know a lot a lot of this. What I’m saying is just my opinion, because we are in a period where there is such a gray area, there’s so much uncertainty. I don’t think anybody really knows. You know, the right answer, you know, right now. But one of the things that we do know is that we’re in the midst of a crisis that’s unprecedented. And, you know, none of us have had to deal with something like this within our lifetimes. You have a lot of courts. What we do know. Like Cleveland Municipal Court, where I practice a lot of in most of the courts in Cuyahoga County. It basically issued an order that is saying we are not going to accept any new eviction file or a lot of files, that the only hearings that are going forward in courts right now are like emergency. So emergency like criminal type cases where people have the right to a speedy trial. Things like that, constitutional rights. And they’re doing that a lot by video or telephone and things like that. They’re really doing the social distancing. But effectively what that means for the real estate investor is that, you know, you don’t have a means right now to enforce your contracts because like a typical lease, a tenant has an obligation to pay rent.

David:  If they don’t pay, your means are to work something out with them, and if you can’t have a meeting of the minds, they’re your ultimate recourse is to file what’s called the forcible entry and retainer to get them forcibly removed from the property. The eviction. Right. And we can’t do that right now. As a landlord, I’m a landlord myself, so. You know, there’s been a lot of talk about what can we do to try to, you know, just get through this process.

Josh:  The truth that we know is that Cuyahoga County and most courts around the country. Again, I can’t speak for all the courts. There’s obviously thousands of them. But we can all pretty much assume that courts are going to postpone evictions. They’re not going to hear evictions probably for 30 to 60 days until this kind of passes, which kind of eliminates us as landlords, our capacity to evict. That’s a truth. We know that. OK.

David:  And the other truth is, the other truth is, is that what people are hearing, like tenants. Tenants hear all this news going on. They’re just as scared as anybody else. It doesn’t need to be attended by a homeowner that has to pay, but has to pay a mortgage note to Fifth Third Bank or Huntington or whoever is holding that paper. The truth is, is that what’s going on isn’t relieving anybody of their monetary obligations to pay rent or mortgage. People are hearing that. That’s a myth. It’s just what does happen. The truth is that we’ve effectively lost our means to enforce it. And banks have to they can’t file foreclosures. So what the thing is, is that people are hearing this morning, don’t go in. I don’t have to file. I don’t have to pay my rent for six months. That’s not true. That’s not true. The truth is, you still have to pay your rent. You still have to pay your mortgage right now. A lot of that could change in the next week with a lot of a pending legislation. So we just have to wait and see.

Josh:   Yes. So the truth is, we’re also under the obligation to follow the contract, that we signed. Whether it’s a tenant signing a contract with the landlord and vise versa, whether it’s the landlord who signed a contract with a note and mortgage with our lender and vise versa. Right. These are still enforceable and still need to be paid. Now, what that those are those are truths. Now a lot of misinformation, the myth is I don’t have to pay for you know, a month or two months or six months, but all that really is, again, back to the truth is that there is not the enforceable opportunity right now to enforce the eviction or enforce the note mortgage through a foreclosure. But as soon as this moratorium is over, then the courts can certainly speed up and we’ll get back to the truth. They can speed up now. And while the eviction and kick somebody out, they can also file the foreclosure. It could have a significant negative impact on somebody’s credit. And that whole thing can start over right from square one like it’s supposed to. Right.

Josh:   So, couple of things. So one of the truths that I’ve heard is that if you are a tenant and you need some relief from your lease, call your landlord and work out a deal. The other truth is that if you are a landlord and you’re having trouble paying the mortgage is that you need to call your bank or your servicer and again, cut a deal in writing through what’s known as a forbearance agreement. And a forbearance agreement might allow you to defer and not pay for 60 days or 90 days.

Josh:   It might allow you to not legally have to pay the mortgage, but you’re going to have to make it up at some point. See, with the rent payments. Right. But that all has to be something that’s agreed upon, not just cause you know, Trump was on a briefing and said, hey, you got to pay your mortgage just before. That is not a legal binding thing. Right. Call your landlord. Landlords, call your lender to work out a deal. Right, David? So what kind of recommendations are you making?

David:  Let’s talk about maybe some best practices for a landlord. Sure. You would just say, hey, if there are a ton of good things you should do is reach out to your landlord to strike a deal. Let’s flip that around. This is I mean, I represent mostly landlords. I don’t represent tenants very often. Let’s talk about as a landlord. As a landlord, what’s your mindset? You own real estate, right? Why are you owning it? To make money. A lot of times when you acquire real estate, you have some sort of debt against it. So you have a debt service. Maybe it’s a mortgage payment. Maybe it’s a private lender. Maybe it’s someone, a family members IRA or so you have to pay a certain amount. In addition to the debt service, you have other hard carrying costs, insurance and taxes and sometimes utilities. OK. And you have to maintain the property. The Ohio revised code says that a landlord, regardless, has a certain duty, an obligation to keep minimum standards to make that place happen. So in order to do all that, you need cash flow coming in. Right. Which is rent. That’s why you have your rent.

David:  So what I’m advising my landlords to do is to be proactive, get ahead of it and call their tenants if it’s possible and call the tenant up. And it’s not basically the type of phone call to shake them down for money. You want to come across by saying, and it’s not just a sneaky ploy. I think there’s some truth to it. You want to find out first how they’re doing. You know, let them know that, hey, we’re in this together, we’re business partners. I always say the landlord-tenant relationship is a good employer-employee relationship. You want to have good employees working for you just like your A players in your business. Right. Yeah. Reach out to them and say, hey, how are you doing with this? Are you healthy? How are you feeling these stressed out? And it’s not. Let’s talk about being able to have an open conversation to figure out what’s going on. Identify what the problem is, and then work together to get a resolution.

David:  And a lot of times people are saying, hey, I’ve been laid off of work. I’m not sure I’m going to make ends meet. I was a waitress at a restaurant. And, you know, they’ve all been closed down and say, OK, how are you like, can you pay anything? Right. It’s a lot of times, it’s a lot of landlords entering into what’s called deferred payment agreements. And we’ve drafted a lot of those. And talked about even more, but the idea is maybe the rents, you know, a thousand bucks a month. And say, hey, can you pay $500? They say, yes. OK. Let’s assume the agreement says on April 1st or maybe by April 15th, you’re going to pay me five hundred bucks. I’m not going to charge any late fees or penalties. The remaining balance of five hundred is just going to get deferred and pay it according to his schedule in time. Maybe an extra hundred bucks a month moving forward. So on May 1st, you have to pay me your thousand. You can pay me another hundred. Now, I’m not going to charge you late fees or penalties. I’m not going to report it. I’m not going to evict you. I’m going to work with you. And then the idea there is, is that you have enough properties, at least you as an owner, maintaining some cash so you can service your debt to get through this storm.

David:  Now, you might have cases where they can’t pay. And, you know, it’s a waitress totally laid off, no cash reserves, a living paycheck to paycheck to paycheck. So how about we do for all of it? I’ll give you, you know, because effectively what’s going to happen is we’re not going to be able to file. But if you’re out there being getting ahead of it in that time and feels you’re really working with them, they’re going to be more inclined to pay you. And then with all of this legislation going out, you can also say, hey, if we don’t know what’s going to what the government’s going to do for us. But right now, part of the bill the CARES program is that, you know, every taxpayer is going to get twelve hundred bucks if it’s a husband or wife and a twenty-four hundred and five hundred bucks, you know, per minor children. So that’s effectively like thirty-one hundred bucks if you have two kids and say, hey, that money is being provided you to provide food and shelter. So we’ll enter into this deferred payment agreement. So when that money comes in, we have the understanding that you’re going to use that to pay me so that I can go ahead and pay my mortgage and all of that. Right. And so at least you have that. And the important thing is you get that agreement in writing. So if it doesn’t come to fruition, if they don’t meet the guidelines of that agreement, then you have a document to then enforce the eviction. And the court’s going to see that you tried to work with and you tried to do the right thing. And I think that’s going to put a landlord in the best position. And I think that’s going to put a landlord in the best position.

Josh:   Yeah, no doubt then. So love it. It’s great advice. You know, you’re at the forefront of this with your clients, including me. Guys are doing lots and lots and lots of units and they’re thinking, OK, I’m gonna kind of get squeezed at both ends. What if my tenants don’t pay and my bank enforces my mortgage? So same thing at the other run, you know, we’re planning on next week picking up the phone, calling all of our banks, lending institutions, credit card companies, lines of credit, just everything that we’ve got and talking to our servicers and lenders and saying, hey, right now we’re not really feeling the pinch right now. OK. So but the government is putting in. Everyone feels like this April 1st is gonna be the tsunami of nonpayment.

Josh:   And we don’t know that’s true or not, but I would encourage all of us on the phone with your services and lenders, your credit card companies, your auto loan companies, everybody. I’m just asking, OK, what are the guidelines? A lot of them are coming from Fannie Mae, from Freddie Mac, from HUD. And they’re saying, well, we’re going to we’re going to allow, you know, landlords or borrowers to do some sort of forbearance agreements again. I did a lot of those for other people back there in the foreclosure crisis of 2007, 2011. All of that has to be writing. If it’s not in writing, then it’s gonna be a he said she said and the lender, if they don’t get your payment, could still negatively report you to the credit bureaus. If it’s in writing or forbearance agreement, you might be able say, okay, I’m not going to pay anything on my mortgage in April or it might just like you said with the tenant, maybe half maybe rolling some payments down the road or defer it till the end. But it all has to be in writing. So you’ve got this forbearance agreement with your lender. It could be all your lenders, your credit card companies could postings offer 30, 60, 90 days, your your your car notes. Thirty sixty. You don’t know. But they’re all getting guidance from the government. Fannie, Freddie and HUD. And most lenders are going to follow Fannie, Freddie and HUD’s guidelines. And right now what we’ve heard is that there is this potential trap that’s being set not on purpose, but by accident. David, I’ll get your comments on this. But what I’ve heard from some other lenders is that people that are deferring their loan payments with Fannie and Freddie. Again, this isn’t fact yet because the stimulus bill is not final. When the stimulus bill is final through Congress, if you get some sort of deferral or forbearance and you accept that and you’re not making a full mortgage payment. Well, you also then cannot evict, and if you get the forbearance agreement, you have to get caught up on all of your payments with your lenders, especially their Fannie Mae, Freddie Mac and HUD.

Josh:   If you’re caught up on those payments before then, you’re allowed to evict. So part of the forbearance language is that if you’re in a forbearance agreement, you’re not allowed to evict your tenants. So I don’t know if that’s true or not, but I’ve heard that from some very large, very big lenders who were in this space for both apartments and residential properties. So you have to be careful. You can’t squeeze your tenants for money and then ask your bank for a forbearance. Right. Right. You can’t do that like they’re tying the two together. So it’s sort of a happy dance. Have you heard any of this? Also, are you hearing some of these things in the marketplace?

David:  I have heard of that. I think it makes sense to me. You’ve got to make the solution consistent, because it doesn’t matter if you’re a landlord, you’re the lender for your tenant. If you’re an owner of property and the borrower on the not, you know, you have to. It’s got to go all the way through. And I think another thing is, is under the CARES Act that’s going through the House today. I spent a lot of time reading through a lot about last night. And if anybody has problems sleeping, I would suggest just trying to pick that up and trying to read it.

David:  But one of the things is, is that so if you’re an owner of property and you have a federally backed mortgage, you know, FHA, VA, you know something. There’s actually a moratorium within that act that says as a landlord, you cannot like place an eviction notice. You cannot terminate a tenancy. And the reason for that is, is because that’s the other part of that bill says, is that those lending institutions have to give the borrowers some relief, too. So they’re trying to tie it all up, like you said. But that doesn’t mean anymore. Like Freeland. You mean all your products are in federally backed. So that doesn’t mean if if your Freeland borrowers, who’s a landlord, that doesn’t, then moratorium’s not going to apply to that borrower. So you have to understand what type of mortgage product you have to.

Josh:   Yeah, exactly. If you got your mortgage from a regular lender, you know, Fannie Mae, Freddie Mac lender like Quicken Loans or Cross Country Mortgage in our area, you know. Nations lending that primarily sell to Fannie, Freddie, FHA, VA gonna be federally backed for the most part. But there’s a lot of what are called non QM lenders. And there’s also lots of people that are originating paper on warehouse lines and selling them off to alternate institutions, alternate lenders. None of that product, as David said, has to follow the government guidelines. Right. Because they’re all basically independent investors selling that product, originating the loan and selling it off in secondary market to another investor. So there’s really no guidelines there. So, yeah, we’re hustlin it’s the end of March, beginning of April. We’re hustling to collect payments for for March and the beginning of April. We’re certainly going to be very smart with that work. We’re going to be smart with our borrowers because we know all borrowers are going to be pinched a little bit. So we want to make sure we cut the best deal for everybody there to.

Josh:   It’s interesting, David, have you read the bill? I read the bill, it’s 883 pages, the initial draft. Yeah, I have it up on my screen right here. Yeah. Did you read the first 50 or 60 pages that have to do a small businesses? Yeah, I talked about that a little bit. Yeah. Let’s talk about it because this is right. I text this to you, I’m sharing it with my entrepreneurial friends. Again, this is not final as of this recording, but we hope it’s going to be final here in the next day or so and then signed off by Trump. But. So this started circling around, so my entrepreneurial buddies about the potential to get an SBA loan.

Josh:   So you guys all know Small Business Administration, the SBA loans are called 7A loans. If you get a SBA loan for your business, you have to go through underwriting and have collateral and all these different kind of things to start a business or submit a business plan. Well, they’re basically taking the same framework of the 7A SBA loan. But part of this legislation is to allow small business owners. So it could be David and his law practice, it could be Freeland lending could be your real estate investment business. Maybe you just you know, maybe you sell something, eCommerce, whatever that is. But you take your business and if you apply, could be what? Yeah, whatever. Right. Shares everywhere. Yeah. Yeah. So it’s amazing. All the different opportunities and things are based on what, small business owners not to lay people off. So what they’re doing is they’re relaxing the guidelines. They’re making these loans non-recourse. They’re making these loans had very little collateral. And you can get loans for all your different business expenditures.

Josh:   But what I read, David, I’d like to hear your take on it, too, is what I read is that for eight weeks after you closed the loan and the loan is funded, whatever portion of the loan that you use for payroll, mortgage interest, rent, utilities, those types of business expenses are very defined in there. They’re pretty black and white. You can package those up and then at the end of the eight weeks you can go to your mortgage or your SBA servicer and petition them to say that you used the dollars to fund those specific. They’re called it, It’s called a covered period during this eight week covered period. 7

Josh:   If you use them for those expenses, then forgive and essentially turn that part of the loan into a grant. They’ll forgive that loan. That portion of the loan that you used to get for rent, mortgage interest, utilities, salaries, commissions and payroll. The other thing that’s amazing about this loan is that they’re deferring payments on the loan for six months to a year. So if you qualify for the loan is funded, you get the dollars to fund your business. You don’t have to pay an interest payment on the loan for six months to a year. So in theory, I think that I’ll kick this over to you now. In theory, you could just go get a loan for the next eight weeks of business expenses that all of those categories. Close that loan, fund that loan, pay for those expenses and then get a complete forgiveness of the loan, if you use the loan for those qualified business expenses and essentially have a grant and have free money from it. It’s amazing if that’s what I read becomes the reality later today. What was your take?

David:  Yeah, the same thing. And another thing is, remember last week they were saying everybody all small business go to SBA.gov and apply online. This is different than that disaster relief loan that was online last week. And that site went down the middle last week because they were having some problems and probably everyone was I don’t know when I went on and I went through and filled out the allocation, just do it. But this is different. So this isn’t something that you’re going to apply for directly with the SBA. You’re going to do it through a servicer. So I was on the phone with the banker friend of mine at a local branch. I said, what do you know about. And she basically said that we don’t know a whole lot. But I just got off a conference call with our senior V.P. of lending in the region and they laid out some bullet points of how they think it’s going to look. So I might be able to share some insight there, but everything that you said is true. But some of the things that aren’t specifically in the bill…

Josh:   Let’s pause here real quick and just tell our audience this is not law yet. Yes, it’s very close. So I don’t want anybody taking this video and being like Josh and David said, look, it was signed in the Senate. It’s on the House floor right now. If they ratify it, sign it as is, because what we read could change. Right. Let’s just make this disclaimer. It could change even later today or tomorrow, Monday, and then Trump’s got to sign it. So this is just what we know so far. It’s not final, but we think it’s gonna be some version or very close to what we just read and what we just told you guys about. So let’s make that disclaimer. Now, what did you hear from your banker?

David:  So what we know was supposed to be, what, three hundred and fifty billion dollars allocated to small business owners with a max loan amount of 10 million dollars. You know, I know a lot of small business owners they don’t need 10 million dollars. They just need fifty thousand twenty five thousand get to the next eight weeks. Like you said, you can borrow more. But like you said, only the amount of expenditure for eight weeks could be being forgiven. So if you borrow more, you’re going to be repaying it? Sure. Low rates, low entry. There’s no loan costs. There’s no application fee. And I just want to see them get a mechanism in place to effectively, you know, get this. Like you had sent me that Wall Street Journal article yesterday, they said, oh, we hope to have this up and running next week where you apply and fund the same day. But you’re going to have to go into it like a local bank or service provider to apply for this loan. Then they the SBA will back it to them. And so so if you’re going to your corner bank, they’re going to actually fund it.

Josh:   Yes. The question is right is there is a lot of people and banks are already SBA lenders like Huntington Bank, PNC. They already have SBA loans as part of their business model. They have an SBA division. So you just have to ask your bank. Do you guys already do SBA loans? Just the framework. I believe what I read is that current SBA lenders and I think there’s already eight hundred eighteen hundred banks lending institutions that are already SBA lenders if they’re going to be the same ones that do these loans. So you just have to ask that question like I know my bank that I think personally is not an SBA lender, but my business banker is an SBA lender. So you just got to ask that question, right.

David:  Yeah. And sorry I’m looking for my email with the notes. They had on it, it just disappeared on me. But. So minimal moment, tremendous, but answering your e-mail, no collateral, no collateral. Up to twenty-five thousand. So if you’re borrowing more than twenty five thousand seems like they’re maybe going to want some collateral for. You know, machinery, real estate, something like that. So they’re really starting to narrow this down already? On the lender stand point. The lenders are taking out the bill. Remember, it’s just like sometimes a law can be really broad. And then when it goes in the lenders hand, like underwriters, they take that law and they narrow it down. So, I mean, this is what the law says. But this is what we’re willing to do. Yes. Of all the things I’m hearing is twenty-five thousand loan amount unsecured. They’re going to minimum credit criteria. And you basically have to show that you’ve been in business since March 1st of this year, which is going to be easy to do. And then you’re also going to show that you’ve been affected by the COVID-19 crisis. So what does that mean? Nobody knows. I mean, I’m looking at it from my standpoint. I’m still busy. I’m still working a little bit. But I can tell you with me losing my eviction docket. Like, you know, that cash flow is going to go down. I mean, it’s just the reality of it and we’re all in the same boat together. So you’re going to have to be able to demonstrate that. So as a business owner, start thinking about these things. How can I do it? They’re going to want a personal financial stake. So if you don’t have one, get one of those together. Get your last your tax returns revenue. That’s a requirement.

Josh:   They might also take up maybe one of the factors should be a percentage like two times or two and a half times 2019 payroll. So there are some factoring of like last year’s payroll. So again, if you get your tax returns done, even if you don’t, you probably have your payroll company or your own payroll that you know what you spent last year and 2019. Pretty easy for you to grab and be able to say, OK, I know I’m going to want this for two months or get two and a half times this number. Something along those lines.

David:  So they want you to prove that pattern and history, because that’s where they’re going to look for that. That footprint there, that history. Because I can go to my call, my payroll provider. They say, you know what, I’m bumping my base salary to 200 grand a year. So I qualify for more. So that’s why they want to see that you’ve actually cut some checks at that amount.

Josh:   So, yeah, my understanding, too, is it’s going to cover employee salaries up to where the employee was making up to one hundred thousand dollars. So if you have a highly compensated employee, including yourself. Right. You could be on your own payroll and be highly compensated. You’re not going to let you just throw that on there and cover that and write that off and forgive it up to one hundred thousand dollars, which is basically eighty-three hundred dollars per month of monthly payroll, if you will. So you can indeed put yourself on there. But they’re probably going to want to see that you were on there before. And you’re going to continue to do that. You can’t just all of a sudden jam yourself, your wife, your kids and everybody else on the payroll. And then forgive it, is my understanding. So I’m sure there’s going to be, you know, just got to prove it and to get the loan and then you’re going to have to prove it again. David, it’s my understanding to get it forgiven. You have to prove it to your servicer right after words that you actually use the dollars for that purpose. So it’s not like you’re just giving money away. There’s going to be some documentation.

David:  And they’re also going to there’s also part of this as a deferment for your payroll tax liability. You know, they’re kicking that. Then they’re going to say, hey, we want you to pay half of it by December 31st, 2021 in the remaining balance of 2022. So they’re deferring your payroll tax liability essentially for two years.

Josh:   Yeah. So again, some really cool stuff. You know, really good points in this interview. Really cool stuff. And getting Congress is working on to me. Those seem like pretty reasonable and useful tools, frankly. It seems like they’re actually using common sense this time around regarding this eight, eight weeks of potential forgiveness, but doing some reasonable underwriting, you know, giving landlords and tenants some relief. But again, making it both, you know, all three sides. The lender gives the forgiveness. The landlord gives the forgiveness. The tenant may also get some forgiveness. But then it’s all going to come back online together maybe eight weeks from now, twelve weeks from now. Where, again, tenants need to make their payments. Landlords need to make their payments to their lender. And lenders are coming back on line and they’re all full steam. Again, I think just everyone feels like this is a two to three month hiccup. And hopefully we’re all back to business, you know, start of Q3. And back to normal. That’s kind of how it feels to me and Congress seems to be acting in that fashion, right? Yeah, it just did. Anything else that, you know, any other time, other points, any other legal or tax ideas? Again, we’re not getting legal and tax advice. You’re gonna make that disclosure. You know, talk to your own accountants and attorneys on anything you’ve heard or seen in the marketplace before.

David:  No, I think we did a good job covering it. And I bet we could probably do another one of these on Monday, and it’ll be totally different. You know, let’s just see what happens in the next 48 hours and see if it gets under the president’s desk, one side. And then we have to figure out to see how can they mobilize that up for actually put it into practice. I mean, that’s gonna be tough. Yeah. Lot of people are going to be working a lot of hours. But to see the progress they’ve made so far is pretty amazing. You know, one last thing I see we’re both in uniform today.

Josh:   Yeah. You got to love it.

David:  You’ve got those quarter zips on.

Josh:   Yeah, for sure. I’m actually creating an online store that will have all of our gear. So this a target? You got that at target. Tree line stuff on the shelves. But where we got our own store, we’re building an online. So it’s actually something that a lot of our students and members and listeners can use. And I know I’ll kick it out to everybody. You can see we’re building an online store with all of our stuff logoed and then we’re gonna send our high VIP clients, attorneys, vendors, borrowers, students, you know, credit where they can go buy the room gear and then they just put a little code in the checkout and then the gear is on us. So they’ve got some of his gear on and we’re gonna spread the word even more with this virus stuff is done.

David:  So I would appreciate the time, Josh, and if you need anything, as always, you know how to reach me.

Josh:   David, just check out what’s your what’s your contact information for anybody that wants to reach out to you, especially if they’re in Ohio. And there is some advice. What’s your phone number? Email website? How can they get hold of you?

David:  Yeah, my direct line is that 2 1 6 4 0 7 6 6 4 4. And then my email is dstreeter@demerlaw.com.

Josh:  Perfect. I’ll put that in the show notes as well. Thanks so much again for all.


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Rumors are flying around daily about what tenants, landlords, and banks can do right now in this unprecedented time. None of us have ever faced anything like this, so I want to set the record straight on what we know for sure, what we don’t know, and what this might mean for real estate investors right now. I talk with my personal real estate attorney and friend, David Streeter, for his professional opinion about what landlords can do to weather this storm.

Let’s get this out of the way: despite rumors, you still have to pay your rent or mortgage, no matter what is being said in a press conference. If you cannot pay your rent, you need to have an open and frank conversation with your landlord, your bank, or your lending institution.

And you need to get that conversation and agreement in writing to protect yourself.

The tenant-landlord relationship requires some trust. Just like your tenant wants someplace to live, you want them to pay the rent. David’s been suggesting to his landlords to contact their tenants about a deferred rent payment schedule. The idea behind this is to have some cash flow, even if it’s not the whole amount it was before this storm.

SBA loans being offered by the current stimulus bill have the potential to float you through the next eight weeks, but there are definitely stipulations for this bill that you’ll need to be aware of. I share some of the most exciting parts about these loans for small businesses, but you should reach out and contact a local lender about your circumstances. The CARES Act hadn’t been signed into law by the taping of this conversation, so we still haven’t seen the final version of this bill yet. And of course, we cannot offer you legal advice.

What’s Inside:

  • Everyone feels like April 1st is going to this tsunami of non-payment.
  • The conditions that might be set on a landlord’s forbearance or a tenant’s deferred payment.
  • Some important points for what banks can offer landlords and for what landlords can offer tenants.
  • Federally backed home loans (FHA and VA) will have different rules under the CARES Act.
  • The SBA loans in the stimulus package have the potential to float many small businesses through this mess.

Mentioned in this episode​

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