Corona Consequences - Landlords Are Part Of The Solution

[Account Closed]

We have all been thinking about and living the Corona Virus. I suspect that most of the BP community is in the same state of mind as me which is, doing everything I can to work it out in my head but obvious and definitive answers to all questions seem hard to come by. 

I have been preparing my own house as has everyone else. My properties are part of that house, and the people that live there are people I am responsible for. You can argue that point if you like but you would be wrong.

I don't want my people to get hurt if possible. I don't want my buildings to get hurt either if possible. I want my people to stay where they are, and my buildings need to stay there too for the sake of they're lives first, and my financial interests second. I am not saying my financial interests are not a major consideration here, just illustrating how the one protects the other.

How one protects the other. My story is going to skip over all the little stories in-between and is going to jump to the end. There is no time to waste. The State Of CA quarantined the entire state today (March 20, 2020). The rest of the country will follow. I expect this to last 2 months, equal to Asia. Our renters are going to panic, as they should. In my opinion, in the best interest of everyone, for sometimes the same and sometimes different reasons, the people who can step up and do something ought to do something. The thing landlords can do, that's all of us, is get in front of this thing and take measures to settle the panic.

I am going to get in touch with all my tenants today and let them know I am accepting whatever they can afford in rent for this month and for the near future. I am going to tell them to purchase groceries instead. A frank and honest talk of the financial challenges for all is going to be had. My people need to know that they have food on the table and a roof over their head. If too many people are unsure of these things, people will become desperate and irrational, leading to desperate things, leading to irrational things. The suicide stories are already coming around. Just like I am frustrated to go through all of this without enough information and answers, so too are the people who rent from me, WONDERING WHAT MY ANSWER IS. I intend to give it to them in no uncertain terms.

I ask all landlords to do the same.

I predict my call for landlord unity to take similar measures will be futile in many cases. I get that. But I urge you to use the speculative mind I know you have and see the different outcomes. If we take the harsh and self-serving at-all-costs approach, the suffering for all will be worse. If we were to seize the moment and take the we're-all-in-this-together approach, it is very possible those efforts could really go far to HELP EVERYONE, saving lives even, quite literally. Maybe we won't be thought of as greedy and heartless afterwards either. Much talk of our tenants true colors showing though has been made in this forum. What are your true colors?

[Jay Hinrichs]

this will be interesting to see how the NO Pay No Stay landlords on this site react to that. I know when I posted this question 3 weeks ago 75% or more of the responders were of the mind if their tenants don't pay its not their problem.. they are running a business not a charity etc etc.. well I guess we will see how it all play outs. 

what I am coming to realize is that a lot of landlords that are worried about paying their own bills  APPEAR to maybe not have taken the advice of many and have proper reserves that you dip into during this type of situation. 

As painful as this is.. this is a wake up call to buy and hold investors that reserves are a MUST not just something to gloss over.. if you never use them that's great but if you need them you don't have to panic.

In one thread a person was talking to their lender.. and the lender said well U should be stacking cash so you can pay your mortgage and you should put off capital improvements.. I suspect lenders will want to see that.

this is not owner occ issues landlords are a for profit business profit or LOSS.. so they will be treated differently I suspect. 

but end of the day i don't think those holding mortgages want a repeat of mass defaults and will come up with creative workouts for borrowers.. 

I just had my talk with my Banker on Wed to go over our projects.  Banking relationships will be a key component as well. you dont always get the best rate.. but you certainly can talk to the guy that holds your mortgage instead of a servicing company.