All Forum Posts by: Franky Aikens

I've been reading through the comments of the livid landlords about this new bill. Totally understand why they'd be up in arms. The originator of this post called it "theft" by the government. It was also assumed and stated that there wouldn't be any relief for the landlords, only the tenants.

But then I read through the proposed bill on the NY State Senate Bill site I found the language below. Correct me if I'm wrong, but according to the language below, landlords WILL get relief and the form of suspended mortgage payments for the same length of time rents will be suspended. Am I missing something here?

(b) (i) Any person or entity who faces a financial hardship as a result of being deprived rent payments for property pursuant to this section shall receive forgiveness on any mortgage payments for such property for ninety days, in an amount determined by the following frac- tion multiplied by such mortgage payment, up to the total dollar amount of lost rent: (A) The numerator shall be the total amount of rent payments suspended for his or her tenants over the ninety day period laid out in this section;

@Tony T. I appreciate your frustration. There aren't many winners in this scenario. But, I have to disagree with your characterization of this NY law as theft. Investors who are in this position should seek a full understanding of the government's role in a situation like this. This is a humanitarian crisis that we are facing that carries real consequences that dwarf losing three months of rent. We're talking about the preservation of life and livelihood. This requires taking measures to provide relief in the short term and the long term. Long term, we have to think about what it will take to recover from this crisis. It won't be easy. Hence why loans provided to small businesses as per the small business legislation will be forgiven IF they retain their employees. Again, this measure focuses on recovery. I'm assuming rent forgiveness falls along the lines of the same logic.

I can see how those who've made sacrifices to build a business can feel slighted. You took the risks and now you want to be rewarded not penalized. 

But lets put this into perspective. 

1.) Those renters who you think are being given your property for nothing by the government - remember, those are the same people who are making it possible for you to realize your financial goals. You need them. Without them, you have no business.

2.) I think most investors don't know what it really means to "own" property in the United States. I put OWN in quotes because although it's a right to "own" private property, it is perceived ownership when it comes to the government. Ever heard of imminent domain? What about property taxes? Sure, your name is on the deed and you could own the property free and clear. But go an extended period without paying your property taxes and guess who will own your property then - the government.

Net/Net is - you're a property owner but only under the conditions set forward by the government. 

No one likes losing money. It sucks. But you did find a way to become a property investor. There's so no reason to think that you wouldn't find a way to make up for the lost income.

What we are facing is affecting every aspect of our lives. Few are completely insulated from the impacts of COVID. The only thing that'll get us through this is for each of us to look for ways to be a part of the solution.

Be well and be safe!

@Scott McElhaney You've done a great service by offering your experience and insight on this matter. I know many are anxious about how to navigate this issue. Very solid advice here! 

It's interesting - the situation is like a microcosm of the economy in that is a balancing act between safety and financial preservation.

The answer to the question is definitely based on location. I'm days away from closing on a property in Philadelphia. It's a gut reno with a 3-4 month timeline. But, Philly is one of those cities that has an "essential business" mandate in place. Nothing moves until that's lifted.

@Jonathan Lyford Best of luck with that. But be safe with it as well!

The stimulus package is in. The checks are on the way. 

Some people will have more income through unemployment than they did working full-time. They are the lucky ones. (If there are any lucky people in this madness) 

Others will struggle to make ends meet because the benefits will be much less than what their full-time income was.

How do you work with tenants who still won't have enough to pay full rent and cover their other expenses? e.g food, utilities, etc.

@Marlen Weber

I'd agree with you, Marlen. We're all trying to find our way down a dark hallway with a flashlight that only lets us see a few feet ahead of us. Many won't know what to expect until the unexpected is upon them.

In my opinion, it's in the uncertain times that you should 10 fold your efforts where you can. While others are scaling back due to fear, what can you do to elevate your position? Should you be doing more marketing to a specific group who are more motivated to sell because of the current environment? Is this an opportune time to seek out partnerships that are optimal for the moment.

Or even better, how can you use generosity for those who need it most during these unprecedented times to create a lasting and meaningful relationship?

As Winston Churchill once said, " In challenging times one must question the accepted reality because things are going wrong, rapid answers are needed and the solution may well be found outside the usual compass."
However tragic and unfathomable things are today, it's also an opportunity to stretch yourself to come out of the darkness a better person on all levels.

It feels like the world has been frozen on its axis over the last few weeks. All aspects of life have been slowed to a crawl or halted altogether. What are you doing to try to keep up the momentum you had before the pandemic hit?

@Clarence Watkins

The effects will be widespread. No one will be in the market for a new place to rent while instability is and uncertainty is so high. So you'll have your choice between options - 1. keeping a good tenant who is having a hard time because of this crisis (through no fault of their own) by coming up with an agreement on late or unpaid rent, or 2. displace the tenant in search of another tenant when there may not be any.

Personally, and this is just my opinion, relief from the banks would be great. But, it shouldn't have any bearing on what your considerations will be to help someone instrumental in helping you get closer to your financial goals. Especially if they've been a great tenant.

Of course, the numbers should work to see this through with mitigated damage but I also think empathy and compassion need to be our north star at the time.

First, put yourself in their shoes. The paradigm shift will tell you what's the right thing to do.

This your opportunity to contribute to the healing.