On September 4th, 2020, the CDC enacted a temporary eviction moratorium that is valid through December 31st, 2020.[1] This is in response to an executive order from President Trump, which reacts to the expiration of the Corona virus Aid, Relief, and Economic Security (CARES) Act.[2] If a tenant is unable to pay rent and faces the possibility of eviction, then they can take advantage of the moratorium by signing a declaration stating that they meet the eligibility requirements for eviction relief.[3] The order shows compassion for the tenant who is having trouble meeting rent obligations. It is necessary due to the record unemployment the country is experiencing. If we don’t do this then there will be a lot of people who will end up homeless. It would be a mess. However, compassion is excellent, but what about the laws of finance? You know those laws that state that if an investor has 20 rental properties and doesn’t receive the positive cash flow of a few hundred bucks on each house to pay the mortgages, he or she will default on the mortgages and end up in foreclosure? This sounds like a ticking time bomb waiting to happen but is it? Landlords have several options to seek relief, as well. One option may be to refinance and bring down the payments lower since interest rates are at record lows. Another option is landlords may be allowed to fall behind on their mortgage payments amid the corona virus outbreak in return for not kicking renters out of their apartments for federally backed loans.[4] Additionally, a lot of states have specific programs to help the tenants and the landlords. Multiple states have imposed a temporary foreclosure moratorium, and courts have shut down to halt the spread of the virus and are postponing foreclosure hearings as part of the process.[5] Jury trials in my area were not allowed until August 31st. There are a few more resources to consider if you are a landlord and are facing foreclosure. The FDIC has help on this.[6] Additionally, the HUD website has information as well, including a program if you become unemployed[7] Unfortunately, the small business administration Paycheck Protection Program (PPP) isn’t geared to help landlords. But the TheRealDeal website reports there is a loophole that enabled big-name landlords to get relief from the program.[8] After learning about the new CDC law, I am glad that I did not purchase the rental property I had an offer on two weeks ago. After all, there is a greater risk that the tenant doesn’t have pay and a risk that a landlord won’t be able to get assistance. Also, I have recently quit my job, so that “dependable” good income is a goner. To learn about why I quit my job sooner than I had planned, check out the link below: https://drpaulkeller.com/financial-freedom/ Currently, I have one rental property, a primary residence, and a loan. I’m in an excellent financial position to handle this loan since I am not overextended and over-leveraged. Even if my bank calls the loan, I will be OK and be able to pay it. But this is not the case for many real estate investors. Check out Dave Ramsey’s story when the banks called his loans.[9] It is nice not to have to worry because I was conservative in my taking on of risk when it comes to leverage. Luckily, I also have a great tenant that has a job, and they are paying their bills. The reality is, though, that there may be homeowners who may fall through the cracks where the programs cannot help them. Many financial experts are suggesting a housing collapse or price drop in a year. Nobody knows if this is a certainty, but the pressures of a downturn in the real estate market seem to be mounting. The unemployment number and how it recovers is a crucial factor in how the real estate cycle will play out. I will be monitoring the unemployment number, will you? Well, that’s all for now. To learn more about rental property investing, check out my book, The Beginner’s Guide To Rental Property Investing Good luck and keep safe, Dr. Paul Keller. [1] https://www.whitehouse.gov/presidential-actions/executive-order-fighting-spread-covid-19-providing-assistance-renters-homeowners/ [2] https://www.whitehouse.gov/presidential-actions/executive-order-fighting-spread-covid-19-providing-assistance-renters-homeowners/ [3] https://www.cdc.gov/coronavirus/2019-ncov/downloads/declaration-form.pdf [4] https://www.bloomberg.com/news/articles/2020-03-23/landlords-granted-mortgage-relief-if-they-hold-off-on-evictions [5] https://www.nolo.com/legal-encyclopedia/coronavirus-foreclosure-relief.html [6] https://www.fdic.gov/consumers/assistance/protection/mortgages/fc-prevention/consumer.html [7] https://www.hud.gov/topics/avoiding_foreclosure [8] https://therealdeal.com/2020/05/26/loophole-allowed-big-name-landlords-to-get-bailout-funds/ [9] https://www.daveramsey.com/careers/about-dave #book #stockmarket #investing #protection #portfolio #stockmarketcrash #bubble #crash #sotckstrategy #stockanalysis #rentalproperties #realestate #habits #investors #masters #buffett #minervini #dalio from https://drpaulkeller.com/hosuing-nightmare/
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Today was a fantastic day for me—I quit my job! This was not according to my plan, though. I was planning to work another four years and retire at 55. But the unexpected happened. The COVID pandemic occurred, and commercial aviation experienced a 90 percent downturn. My company, which makes aviation products, was struggling financially, and the people in charge gave the employees in my position around a 20 percent compensation cut, a voluntary separation plan, an involuntary separation plan, and a partial furlough. Despite all of this, they expected the employees who remained to work overtime and no schedule relief. It was as if they were operating as none of this ever happened. I experienced many unreasonable schedule deadlines, expectations, and I had a tough time standing up for the quality of the product. I had to push back often, it caused me great stress, and they did not appreciate my stand. It came to the point where I was given a trip to HR and an incredibly complex improvement plan to follow from my boss. If I didn’t improve, then I faced disciplinary action or termination. All of these factors and many more made me decide to leave the job and not do the performance improvement plan. Luckily, I had finished the schematic and left my team well-positioned for success with the new product. The good news is I was ready financially. I never believed my corporate job was the answer to my financial problems. During my 20-year career, I studied investment often and was always scheming to make a little money on the side frequently. My knowledge paid off big time in my stock market and real estate investments, and finally, I became a millionaire after the bottom of the Corona crash. As I go forward with financial freedom, I plan to make my author business my number two priority. My priority is my family and friends, of course. So far, I have written three books in the Financial Master Series: The Beginner’s Guide to Rental Property Investing My fourth one that helps readers choose a side hustle that fits them perfectly will be on Amazon in a month or two. After I quit my job, I opened an order from Amazon and saw the label they had put on. It said, “Future you say, thanks.” This label and its message seemed to be so relevant at this point in my life. If you work at a job that you don’t like (80 percent of workers don’t like their job), then I encourage you to work towards securing your future as I did so one day you can leave your employment with dignity and with the confidence, you can make it on your own—your future self will thank you. Good Luck, Dr. Paul Keller #book #stockmarket #investing #protection #portfolio #stockmarketcrash #bubble #crash #sotckstrategy #stockanalysis #rentalproperties #realestate #habits #investors #masters #buffett #minervini #dalio from https://drpaulkeller.com/financial-freedom/ We just cleared a significant milestone on August 18th. The S&P achieved a new high. Of course, you know why this is important. But let’s recap what happened for 2020. The market crashed due to fear and the strangulation of the world economy from COVID. The S&P experienced a 34 percent drop, the NASDAQ went down 31 percent, and the DOW dropped 38 percent and was at its lowest on March 23rd. Check out the graph of the DOW below. The first index to recover was the NASDAQ, and it did so on June 8th, 2020. This is quite phenomenal when you think about it. It took only 77 days to do this, which is about two and a half months. It continues to make new highs and is currently about 14 percent above the old high. The S&P took 148 days or about four and a half months. But the DOW is lagging, it has not yet recovered fully and is 6 percent below its previous high before the crash. To give you some context with other crashes, consider the table below of crashes and their recovery times.
If the DOW recovers before seven months, it will be the fastest recovery for all the major crashes, which would be unprecedented. When the market goes up too fast, it may experience a nosedive. In this case, I am not sure if the market is going up to fast. Are you? Will this be the W shaped recovery that investors often talk about? Right now, it looks like a U shaped recovery. In any case, it would be wise to think about protecting your investment for the next crash, whether it is sooner or later. You might be interested in my newly updated book, Crash Proof Your Investment, which offers eight protection methods to consider. It usually is $9.99, but until the end of August 2020, it will be 99 cents. Check it out at the link below: Crash Proof Your Investment by Dr. Paul Keller That is all for now. Good Luck Investing. Dr. Paul Keller #book #stockmarket #investing #protection #portfolio #stockmarketcrash #bubble #crash #sotckstrategy #stockanalysis #rentalproperties #realestate #habits #investors #masters #buffett #minervini #dalio from https://drpaulkeller.com/stockmarketmastersbook-2-2-2/ |
About UsDr. Paul Keller is a best-selling author who holds a Ph.D. from Georgia Tech. ArchivesNo Archives Categories |