Real estate is a path to wealth. Large corporations and capitals started with a “For Rent” sign hanging in a house window. Being a landlord is a demanding job. It is necessary to deal with dozens of small and large details every day to be successful.
Preparing to become a landlord has several aspects. First, the new landlord must understand federal, state, and local laws. You can get information at various places, such as the Oregon Bar, the state Attorney General’s Office, The Oregon government website, and the public library or online.
The measurements taken by the CDC, the federal and state governments to protect the population from the COVID-19 hardship have produced a severe economic impact that has been slapping individuals, businesses, and the Americans’ peace of mind.
Housing laws in Oregon protect tenants from eviction at least up to December 31, 2020.
So far, the government office has not issued an extension on the eviction moratorium rule, but it is most likely governor Brown will sign an executive order to extend it.
As a consequence of the virus prevention rule, Mom-pop and small landlords are simply bystanders with no power to regain control of their rental properties when a tenant is unable to pay the rent. Tenants financially affected by the Coronavirus pandemic are authorized by law not to pay rent as of April 2020. Perhaps, there are small landlords with no income from their rental properties but with obligations to meet, such as property taxes, maintenance, and mortgages. Some of them have also lost their jobs or other sources of income because of the pandemic.
The Mortgage Forbearance Syndrome.
Homeowners financially affected by the coronavirus hardship with mortgages covered by the CARES Act are subject to an initial mortgage tolerance of 180 days. They can request another 180 days of clemency extensions if it is needed.
The homeowners without federally backed home loans and financially impacted by COVID-19 should contact their lenders for assistance. Many of them find that only a handful of lenders are willing to work with homeowners. According to customer testimonials, most banks have turned down applicants for mortgage forbearance without a reasonable explanation putting homeowners at risk of foreclosure.
Some lenders grant a 90 days forbearance plan to conventional loan homeowners, but at the end of the forbearance period, they are disqualified for an extension, again, without explanation.
The options for these non-federal-backed desperate homeowners and small landlords are either a foreclosure path or selling the property.
Every day in our Better Off Home Buyers offices, we receive emails and phone calls from single-family homeowners and small landlords. They ask if we purchase their properties. The tremendous impact on the economy has been devastated during the last half of 2020. It is necessary to point out the struggle small landlords face during the pandemic. At the time we are writing this post, dozens of small landlords are not collecting a single penny from their rental properties for the last seven months.
If an effective vaccine to eradicate the virus is not coming out before April or May 2021, and the number of unemployed does not decrease. Small landlords would face foreclosure and losing their property.
360 days mortgage forbearance won’t save homeowners and small landlords from disaster. Even after COVID-19, many will need way more time to get back on track.
Some Landlords Screwed Up By Their Tenants.
The temporary moratorium on residential evictions for non-payment only protects renters in Oregon.
Executive Order 20-56 prevents tenants from being evicted during the time set by the order. Although the move is intended to prevent the spread of the coronavirus, many tenants seized it for profit. Some landlords have informed us that their tenants falsely claim they were unemployed or on furlough.
In the Expert’s opinion, “When the moratorium on evictions comes to its end. Tenants who are unable to pay rent will simply move out without paying back a penny.”
The frame time to resume rent payments and the missed months is between January first to March 31, 2021. This critical economic situation makes us predict people will not pay their rent, even if they make enough money for it. Struggling landlords will be their lender’s prey unless they encourage themselves to take measures to improve their situation.
Recently, an independent landlord contacted us saying he owned a single-family rental house in Portland. A month after the coronavirus broke out, his tenant called him to notify him he was affected by the pandemic. He had lost his job, and it was impossible for the time to pay rent. Our client was renting his property for $ 1850 monthly.
This landlord called us right after the Oregon government announced the eviction moratorium had been extended to June 30 of 2021. He was concerned because his tenant has remained in the same economical situation, and all indicate the tenant will be struggling to meet rent payments in the months to come.
Using this landlord problem as an example, we calculated the total of money our customer may loss up to June 2021, as follows:
13 months rent X $1850 $24,050
Eviction process $ 800
Property taxes $ 2,500
Home repairs (assuming light damages) $ 9,500
Waiting time for new tenant (2 months) $ 3,700
Total loss $40,550
Our client (we don’t have his permission to use his name) manifested his intentions of selling his rental property to us. He inherited the property eight years ago.
His tenants had been occupying the house for two years. Only on a couple of occasions, they paid the rent a few days late. He told us that for this time, he was convinced his tenant was taking advantage of how generous Oregon law favored tenants.
With a Mortgage Forbearance Plan.
Requesting a mortgage forbearance plan for a rental property loan differs from a residential one. A rental house is an investment. Since getting a forbearance plan for your home loan, you just need to say you are struggling because of the pandemic. Otherwise, to obtain mortgage forbearance on the rental house, you must submit an application supported by documents. Banks will take their time to approve the request or reject it.
In general, private lenders approve just three months of forbearance and extensions are rare. If a landlord with a mortgage loan has difficulties making monthly payments, there are big chances he defaults and faces foreclosure.
In today’s sanitary and economic conditions, owning tenants-occupied property is one of the hardest things to do. Many people have lost their jobs, businesses, and the ability to earn money. In Portland, the demonstrations and thousands of protesters have destroyed the beauty and peace of one of the most beautiful cities in America.
If conditions remain the same, small landlords could not keep their rental properties. Foreclosures and abandoned properties will abound in Portland and Oregon’s real estate market.
Some landlords are looking for other solutions to avoid future headaches. Many have contacted us to inquire about our home buying process. We gladly have helped some of them during 2020, and we will in 2021.
Landlord Without a Mortgage Forbearance Plan
Conventional mortgage loans are those non-federally-backed. Typically, these loans require special treatment from lenders to qualify for a mortgage forbearance plan. In many cases, lenders reject them without any explanation.
Mr. Frankie Small came to our offices in Lake Oswego to get information about our home buying program. He owned a well-located rental property in Bethany. His tenant, a restaurant manager of one of the most visited restaurants in downtown Portland lost his job. After the first Oregon lockdown order, the restaurant reopened to sell to go only. With a few employees, his tenant was able to sustain the restaurant business at flote. The place was just hanging there until a Saturday night, when violent demonstrators broke the restaurant doors, looted, and burned down the building.
In late October, Better Off Home Buyers purchased Mr. Small’s rental home. As usual, the home buying process was quick and clear. Additionally, we include the needs of Mr. Small’s tenants. For our company it is important that everyone involved in a home purchase-sale transaction be a hundred percent satisfied.
Better Off Home Buyers Is The Solution.
2020 is a year to forget or to recall forever. COVID-19 has been the start of many changes that will remain in our lives for many decades to come. To eradicate the virus, we had compromised the economy, our families, and the traditional way of living in our country.
We Americans are well known as hard-working people. Any immigrant that steps on our soil falls in love with our traditions, and soon becomes one of us. A free human being pursuing happiness and the American Dream.
All dreams have a price to be paid. Sometimes circumstances act out of people’s control, but that is part of life. The key to success is not to give up. If one fails, just get up, shake it up, and hit the road again. The goal is just a few steps ahead!
Nationwide, we are struggling with the pandemic. Many lives are gone forever, and many more will be gone until a vaccine can defeat this mortal virus.
In the meantime, we must move on, we must take precautions and follow the recommendations of the authorities to prevent the virus from spreading. Unemployment has reached record levels, people have lost their jobs and are struggling to meet their basic needs. When the situation gets most difficult is when the head has to be colder.
Every problem has its solution. In the area we work every day, we have contact with a lot of people that are going through difficult moments. Nobody was expecting a pandemic and its associated negative aspects. There is no doubt 2020 has been a different year, for hundreds of thousands, the personal economy is a problem growing bigger and bigger.
The CARES Act does not provide protection to all homeowners and small landlords. Those with non-federal backed mortgages have to go under more complex requirements to be mortgage forbearance approved. Many of them just get a rejection for an answer.
The small landlords and homeowners who are having a hard time keeping their properties are considering selling their houses. According to their testimonials, they couldn’t sell their homes throughout the regular real estate market.
To sell a property on the real estate market, it has to be issue-free, otherwise, no real estate agent would accept it. Many people need to sell their houses or their rental houses because the crisis pushes them to do so. Lack of income is affecting more people in Oregon and the United States. The government and the health authorities force us to an imminent closure in December and January. Citizens must be aware that drastic measures must be taken to end this coronavirus virus.
Small landlords and homeowners are permanently contacting us. They want to find out more about our criteria to buy properties. We have one simple answer to their questions, “Better Off Home Buyers buys your home AS-IS.”
Some homeowners are behind payments, others have a mortgage forbearance plan, pre-foreclosure, or a foreclosure process. Many small landlords with only one rental property haven’t collected rent payments for several months. We are a professional home buying company with years of experience purchasing properties in Portland and across the nation.
Contacting us is easy, just fill out the information form on this page or dial directly (503) 212-9641. We will contact you back in less than 24 hours. Then, we will schedule an appointment to visit your property. Visiting your house wouldn’t take more than 30 minutes. We’ll wear a mask, gloves, and shoe cover, we are committed to avoiding the coronavirus from spreading.
The selling-purchase process takes about 7, sometimes a few days more, sometimes a few days less. Every transaction is different. Our home purchase process is fast, transparent, easy to understand.
For more information please contact us. We are happy to help you.
También hablamos español.