The COVID-19 pandemic is wreaking havoc among businesses and renters/homeowners, and real estate investors are feeling the effects. Whether you’re a residential investor, worried that your tenants won’t be able to pay rent, you’re a commercial investor, worried that the businesses in your properties won’t make it, or you’re an investor in the middle of a 1031 exchange, worried that you won’t make the deadlines, you have concerns. We want you to know that our team at Diversified Investment Strategies is here to help. If you have questions, you need assistance with your investment needs, or you just need someone to lend an ear, give us a call! We can talk virtually and get through this together.
The $2 trillion COVID-19 economic relief package that was passed includes:
–Mortgage Forbearance: Borrowers of government-backed mortgages can request up to 360-day payment forbearance without proof of hardship. There may be no foreclosure actions for 60 days except for abandoned or vacant property.
–Owners of multifamily properties, current on their mortgage payments as of Feb. 1, 2020, may request forbearance for 30 days due to financial hardship, with extension of up to a total of 90 days. These borrowers may not evict or charge late fees to tenants for duration of forbearance period.
–$1.25 billion for Section 8 voucher rental assistance for seniors, disabled and low-income working families experiencing loss of income due to coronavirus.
–Moratorium on eviction filings, fees or penalties, for tenants for nonpayment of rent for 120 days on properties protected in any way by HUD, Fannie Mae, Freddie Mac.
–The relief package also includes $5 billion for CDBG to help communities and states, $1 billion for project-based rental assistance, $50 million for Section 202 Housing for the Elderly, $15 million for Section 811 Housing for Persons with Disabilities and more.
So far, an extension has not been made for 1031 exchange deadlines, so the period for a taxpayer to identify a replacement property in a 1031 exchange is still 45 days, and 180 days to receive replacement property. A group of real estate associations has asked the Treasury Department and IRS to delay deadlines for 1031 exchanges, so we will see what happens.
A down cycle is inadvertently coming for the economy. it’s important to keep in mind that down cycles can lead to great opportunities, as long as investors continue to believe in long-term viability.
There are lots of unanswered questions, and the industry is changing hour by hour as new conditions arise. Right now, the best course of action is to do what is necessary to stop this virus, which is work remotely, stay home as much as possible, practice social distancing, wash your hands for 20 seconds regularly, and remain calm, for yourself and your investment tenants. Seek the latest real estate news, but don’t panic.
Remember, this isn’t just affecting you, it’s affecting all of us. We will all be affected in the end, and we will all have to work together to get through this. Our team at DIS is here to help! If you need guidance with your real estate transactions, or you have questions about the current market, give us a call. We are here for you.