The Eviction Moratorium Extension? Landlords Beware! CDC Update

Welcome, everyone, to the Main Street Business Podcast with Mark Kohler and Matt Sorenson. We're so excited to be here today. And Mark Kohler's fired up. Just before we talked. He's a little fired up today. I'm like, dude, this is gonna be our podcast.

Yeah. We're doing this as our topic today. The abit.

Save it for the podcast.

Yeah. Matt's like, well, tell us how you really feel, Mark. Yeah. This eviction moratorium has me really upset. I wrote an article Two days ago, two days after the moratorium was lifted, after 10 months of this ridiculous moratorium. And now we'll bring you. Now, I don't want to say ridiculous. We're going to. Okay.

All right.

So chill out, everybody. I'll give a disclaimer here in a moment. But after 10 months, it was lifted. I write an article, and yesterday, a day after my article comes out, the Congress has urged the CDC to extend it further. So we're going to give you the details. I'm just really. I'm a little chapped. It's really.

Yeah, okay. That's a good word. It's a good word. And chapstick does not help that. So. Well, that's what we're going to talk about today is the eviction moratorium. As many of you guys remember, the pandemic came, and if you're a landlord, you know, one of the things that happened through all the stimulus and PPP and all the things that came out, you know, was an eviction moratorium, which, if you were a renter and you couldn't pay your bills and you lost your job, it was awesome. And it was, I think a good temporary measure was a nice thing to do for a temporary period of time. Well, if you're a landlord, you're like, well, this sucks. How am I going to pay my bill? You didn't do a moratorium on my mortgage payment. I still got to pay. So. So it was this obvious conflict, of course, and we'll get into the details here, but that's going to be talking about today. Now, this moratorium is extended October 3rd. It's the latest update from the CDC. Yesterday, I think that was in response to Mark's article.

Yeah, I'm sure

now.

So here we are.

But I want to. I got some tips on that. Just. Mark and I are landlords ourselves. We've got rental properties. We fill it from that end. And I. I know there's people out there that. That are hurting through the pandemic. But in many ways, the Economy's rebounded and employment is not hard to get right now. And that was the intent of this was people are going to be out of the workforce. We want to. Don't want them to be evicted until they have time to get back on their feet and get employed.

Now, if many of you are regular listeners, by the way, thank you. If you're new to working, listening to

Matt and I sometimes listening to our show is also. It's work.

It's work. Yeah. We're going to give you a mental workout. We want to make you smarter by the time you're done with this show, that's for sure. And welcome to all of you. We're here about building wealth saving, taxes, and obviously we're concerned for our clients, many, many, many of which own rental property. We're also concerned for our fellow man, fellow woman in America and the hardships that Covid created. And both Matt and I are very involved in our communities and charitable. And we have family members that rent extended in our immediate family. And so we're not trying to come from this from a jaded standpoint entirely. So please put your guard down. Some of you may listening to this are tenants that are utilizing the eviction moratorium and need it desperately, or you have a family member that is in that situation. But okay, so now on to my disclaimer. For those that have listened to our show before, you know that we're also

both attorneys, by the way. So every. Everything starts with a disclaimer in our world. So there was the disclaimer. If you decide to listen on. You have agreed to that disclaimer.

Yeah. And you'll love a lot of. We've got 3, 400 plus podcasts in the hopper over 10 years on almost every topic you can think of about running a business or rental property or investing. And we hope that you find this channel a really unique find and a diamond in the rough. But if you've listened to our show, you know what Matt just did there, you know what he did, right, folks? He gave a preemptive disclaimer because he knows Mark's gonna stick his foot in his mouth if I don't kind of give some of these disclaimers away and hopefully satisfy Mark's feistiness today. Was that true?

Yeah, that's true. That's like. So when I said that, it was then I gave you liberty to say whatever you want. It's kind of like when you start off something you say. Now I say this with all due respect. Yeah.

You know, it's not gonna be good.

You can't say anything after that that you want. Yes, it does. That's what it's for. That's exactly what it means.

Yeah. That statement, with all due respect and bless your heart, you know, it's not good. What's coming next. So, okay, so here's. I. And this show could turn into a really. A political commentary and we could go down that rabbit hole. And I. So. But I am going to.

We're going to try to avoid that.

No, I was just going to say I'm going to briefly touch on it.

I'm just going to jump into it.

Yeah, I'm to. I'm freaking going in head first. Chill, chill out. Okay.

All right. Because what you got to do.

Okay. I'm going to say it because Mark

Kohler unleashed, you know?

Yeah. Unleashed. Yeah. I. Through the COVID pandemic, one thing that I've learned myself about society that I probably would have generally agreed to before this happened, but I've just learned it and it's been in my face and it's been a huge reality check for me is the human nature to take the path of least resistance. Now, we say that, and we say, yeah, people will take the path of least resistance. Covid has demonstrated that social and human characteristic to its fullest. Because now this is where I was going to say, I know some of you are struggling, but there's a lot of people that aren't. They have found, oh, working from home is fun. Oh, I can get extra unemployment. How many people have you met or heard of or seen that have said, hey, if the government's going to pay me, why, I can make 80% of what I regularly make and I can stay home. I'm staying home. Yeah.

And by the way, I think that's the smart thing to do. If the government's going to pay you more money to do nothing or maybe to start your side hustle at home while you're collecting unemployment check and you don't have to go to work, Would we expect people to be like, no, I'd rather go to work and make, you know, 70% of that? I mean, I. Isn't anybody shocked by that? And I appreciate the value of hard work. That's. That's one thing I think is, like, the satisfaction of, like, earning a paycheck. I think that's a lot of our mental health issues and stuff going on right now, I think, is it's not a lot of it, but some of it's related to that. Like, you There's a lot of satisfaction and self worth made from going and working and earning something rather than just getting sent a check.

Yeah, no, I totally agree. And we're going to get into the moratorium and the details and what you can do as a landlord. Yes. But maybe you're feeling a little bit of camaraderie here. I don't think the landlords have been heard. Every article I've seen in the last week on the eviction moratorium has been tenant centric like, oh, 10 million of tenants around the country and this and that. And every statistic says poor tenants, poor tenants. What about these poor landlords? And I know a lot of our listeners want to own rental property if they don't already and you felt neglected and unheard. And so maybe this is an opportunity for you to feel like at least we're venting on the airwaves for you,

that

we hear you, we've lived it ourselves and it's very, very frustrating. And so point number one is I think the eviction moratorium was again necessary for a short period of time, especially in the heat and the, I guess I would say the hysteria and fear that was going on last year. But to extend it again is not helping the economy and it's not helping homeowners. Okay. Yeah. You okay with that point?

I, that's fair. I concur.

Okay, so let me give you a few statistics that and, and my article I think is really hard hitting. I make some very important comment. I think that are important comments that would offend the left a little bit. But I'm sorry if you've. Anyway, okay. And I'm all over the board on left and right issues. I don't want you guys, everybody out there to think, oh my gosh, Kohler's just extreme this. I'm not, I'm just on this eviction thing. I'm a little upset. Okay, so this is, according to the US Department of Housing and Urban Development, hud just last year they reported during the COVID pandemic they wanted to give statistics especially for Congress that was grappling with what to do. 72% of all rental properties in America are a single one unit rental, a single family home rental, 72%. This is not big corporate America against little David. You know, David and Goliath thing. If some of you are like, well this, these poor tenants are being evicted all over the country and these big corporations can afford it. No. 72% are single family homes. 41% of all rental units are owned by A single individual sole proprietor. When you add into that a two member LLC, well over 50% of all rentals in the country are owned by one or two people.

Wow, that's surprising. I don't think a lot of people realize that.

No. Now, what was interesting is not in

the conversation for sure, in the rooms of the cdc.

And so another study back last summer, the Aspen institute and the COVID 19 Eviction Defense Project. There's a title for you. Last year in August noted that over 12 million households, and they extrapolated approximately 24 million people, two people per household on average. So they came up with that in their survey and study. 12 million households were at risk of being evicted. In my article, I said, the COVID 19 Eviction Defense Project determined that over 12 million property owners are in the threat of losing their rent. There's two sides to this coin, people.

Yeah.

If 12 million households might get evicted and can't get evicted after this moratorium was implemented, that's 12 million property owners. And you multiply that by 71% or 55% or 60%, those are millions of Americans that are relying on rent to pay their bills. Can't do anything about it.

Yeah, yeah. No, I think the counter argument of when you know, from the political side is, well, we've given all these emergency rental assistance funds, you know, and sure, that's helping the tenant, but they're paying the landlord. So the landlord's still getting paid with all this emergency rental assistance.

Oh, you want to go there?

Yeah, that's.

Let's go there. Okay.

Counterargument.

Sure. Here's your counterargum. This is in paragraph three of my article. In December of 2020, Congress said, yeah, let's do it. Let's give rental assistance that'll indirectly help the landlord. It wasn't directly for the landlord. Landlords could not get PPP money. They couldn't get the EIDL grant. They couldn't get an EIDL loan. They had nothing. So we're gonna give 25 billion in rental assistance. Oh, but guess what, landlords, you gotta go through your tenant to get it. Good luck. And then again in March, they gave another 25.5 billion and added it to this fund. So the math there, everybody is 46.3. No, 40. Gosh, I just had it right here. I thought it was 46 billion. Yeah, it was. 46 billion was allocated to this fund. Now guess how much of that fund has been actually distributed as of August 1st this week.

Of 45 billion.

Of 45 billion. I don't know.

I'm guessing it's going to be small since you're 40 billion of the 45,

3 billion, 6% or less has actually been distributed. There's over 340 different state agencies administering the fund, asking for sometimes extensive proof of need, making landlords get the tenant involved, or not the landlord or not the tenant. It's a nightmare out there trying to get this money. And so if you think, well, yeah, the government's helping them, you know, then we should be okay.

Yep, here's one thing, because I've been on the receiving end of this on one of my single family rentals that I had a tenant in there that had lost their job temporarily. They were kind of furloughed, they'd been brought back, but they got rental assistance for almost six months and the. They just moved out of their place. The last request they put in for rental assistance, and this is a pain in the butt by the way, for you to do as a landlord, you have to produce your lease, assert the amount owed. You got to fill out some forms, but you know, it's worth it to freaking get paid. So I'm not, We're not. I want. It's just for me at least I'm saying, still chase this money down, do everything you can to go get this rental assistance money. But what happened was in my case is they had three months left on their lease and this is administered by the city here in Arizona for the rental is they just sent me the whole. Every. All the rent due on the rent. On the rest of the lease, the rent was even due, yet it wasn't even owed. This person could have got a job next month or come back to work. The city just sent the whole money. And I think what's happening is these cities and places have all this stimulus money and they are trying to pay it out, which I appreciated getting three months of advance rent and paying off the end of my lease. But it shows you this system we're in right now and some of the problems with it. So remember though, I'm just saying if you're a landlord, this rental assistance money, and this is a single family rental, is 2,300 bucks a month. You know, they're paying full rent on this stuff in addition to covering some utilities costs for tenants as well. So I just. My advice as a landlord, even though this is a crappy situation to be in, or you have a tenant not paying that you cannot evict, you really got to assert and go after this rental assistance Money. And, and that's. And it's a check that's not going to bounce, but you are going to have to fill out some paperwork. So just keep in mind that's still there. I just want to say there are resources. I don't feel totally helpless here. And it's one I've at least experienced myself. And so.

And I want to get more into the details of that. I just quickly pulled my numbers just so that I had it accurately. I'm sorry. It was December. In 2020, they issued 25 billion to this fund and created it for landlords, slash tenants. And then in March they added 21.6. So the total was 46.6. And only 3.2 billion, I think is where they're at, has actually been distributed. Now, there's a lot of political issues on why the SBA was a perfect fit to distribute PPP money with the banking system. And there was an incentive for banks to assist cause they got paid to distribute PPP money. Eidl loans came directly out of sba. But I think the problem for landlords and tenants in this whole situation is Congress was like, okay, here's 46 billion. Well, how do we get it to the right landlord? How is this not abused? How is it not taken advantage of? Well, we don't have a national SBA for small business owners, for tenants, like we do for business owners. So let's just give it to all these state agencies that might be an equal housing opportunity, whatever.

State housing. State housing. And then a lot of the states just pass it down to the cities. Yeah, and some of the cities have. And states have non profits actually administering this. Yeah, there's a non profit involved in the application process just because the city can't handle it. But this non profit, luckily kind of like got involved.

And then what happens there is you get people that are in political positions at the local level that may not care about the landlord or they may. And they're making it easy for landlords or they're making it hard for landlords. They're making it easy for tenants or hard for tenants. And the uniformity in the application is a disaster. And so I get it. But anyway, so the. In my summary here, that's the issue that really bugs me is that I think the landlords have been neglected in this process from a practical standpoint. I know there's some difficulties in trying to help them directly and how to do it, but it's not working and throwing more money on it is not helping. And then to Take it and give them another moratorium for two more months where these poor landlords can't evict someone now anyway. Now here's why I think they extended it two months. Okay, so let's get practical here. I think it was a huge reality check back to my original point that a lot of people that took the path of least resistance, they didn't think that they might actually get evicted someday. You know, there's a. I get an unemployment. I'm not evicted. Woo. I'm not going to go to work. I'm not at all. We have employment shortages everywhere. People can't. We can't even get ships, container ships unloaded in Long Beach. We've got all sorts of employment problems around the country. So I think what happened this week too is a lot of people in their homes got that eviction notice that said these landlords were dying to send that eviction notice on August 1st and it freaked them out. Now what are they going to do? Hopefully, here's my recommendation. I'm going to say it a different way than Matt. Now. Maybe your tenant is being forced to take this seriously and this is a chance for you to contact him. Because you can get up to 18 months of prior or future rents through the program. So if you can find the program in your area that fits where your property is located, I would reach out to your tenant and go, okay. Luckily you, the cdc. Lucky for you, the CDC gave you two more months. That was a wake up call. We got two months to get you. Give me some money. If we can get me some money, I won't evict you. Landlords don't want to evict. Just. And so I think, I think this is actually. If I'm. Look, glass half full. This is a good thing that the CD that this was a reality check that need to happen. And CDC, in my opinion, said there's $43 billion out there. People, get your shiz together and go get with your landlord and landlords, go get with your tenants. You got two more months to get up to 18 months of back rent. Let's fix this. There you go. Yeah.

What I want to do is look after the CARES act rental assistance, okay? This money was allocated under the CARES Act. There's states and cities that have thrown their own little money into this. Cause they want to. But all the big money's in it. The federal government money under the CARES Act. So let me just say the number one reason someone's going to qualify if someone's still collecting unemployment or, or was, you know, even if they are, you know, we know that employment benefit has been reduced. It's a criteria qualifying under for unemployment. They automatically qualify for the rental assistance. Even someone. This is, then this varies from location, location. But let's say just in Phoenix here where I'm at, if you're a family of four with making 62,000, making less than 62,000, you'll get the rental assistance even if you're employed. So that money is out there. And I think unfortunately the way they've done this is a little backwards because it's up to the tenant to go claim it. Now the landlord can do certain things to go get the money, but it's hard because how do you know the situation of your tenant? How can you attest to their unemployment or not? And so they, they've tried to allow the landlord to do some certain things if they get written permission of the tenant, but it's still hard because they did this backwards. Unlike Mark, what you said about ppp, it didn't go to the customers of those small businesses to go buy from that small business. It went to the small business.

Yeah.

Much like a landlord, it's like they don't, they're sending the money to the tenants to go use the money to then pay the landlord rather than just send the money to the landlord and saying you got a tenant that qualifies, we're just going to send the money directly to you, you apply and come get it. And so that's what's been hard is you do really have to work with your tenant. But here's the thing too, and I know those of you have the property managers and the big, frankly property management companies and landlords, they have staff to do all this crap. They have people that they can go hire for their apartment building with 200 units to go chase down the 20 in there that qualify for this to get them a check. But those of us that are like half the rental properties out there with single family homes that just have one or two of them and you're so you got, you got your own job, you got to show up to every day or your own small business, it's a little hard to go get this money and you got to do it every freaking month.

Yeah, great point, Matt. I should add that to the article. And with that said, my article has a lot of links and resources. Corey, Jack, can you guys make sure that my article's in the show notes and at the end of the article I also give you a link to The Consumer Financial Protection Bureau, which created a new tool to help you or your tenant apply for rental relief. I also provided a link to the National Low Income Housing Coalition that has a state by State list of 483 programs giving out the federal fund money. And if you're in a local area that may have three or four programs or. Sorry, let me say it this way, in your local area, whether it's Phoenix or small town usa, find out which programs are administering this money in your area. Do a little Google search. Find out which program people are enjoying. That's helping. That's not a pain in the butt. Walk into each one, take a half a day or call them and go, what are you requiring? Oh, see, they're going to, they can add crap to their application and make it harder than a different group. You may think they're all going to do it the same way. They're not. They're not. So, yeah, shop around to find the best program in your area.

Yeah, yeah. And I just, you know, want to say one thing we've had though is at least your real estate values maybe gone up. You may have a tenant not paying, but hopefully the value of your property has been going up. Is the, is the real estate market has been very, done very well for the last year during the pandemic, which is surprising. Again, this is, this is this quandary of this weird economy we're in, how there could be massive growth in business, huge, you know, GDP growth. And yeah, there's still a lot of unemployment out there. And it's, you know, without getting into too much politics, we all know that the politics behind it and where you can stand on it. But let's just be practical. That's what I'm trying to do just for my own rentals is like, let's just be practical. I know it sucks. I wish there was a better resource. Use the ones that you can. It at least worked for me. And I know many of you have tenants that won't even talk to you or take your call that are just hunkered down because they think they don't gotta pay. But you know what, what's gonna happen when in October 3rd you're gonna be able to go after them for all the past due rent.

Oh, they are. There's not gonna be another extension.

Yeah, someday. But. But here's one thing you're going to need to do and you know this. Any of you single family, you know, landlords out there that have had a few properties here and there, you know, if you have to chase someone down to a victim and you get a judgment against them, that judgment's not worth the paper it's written on. You're not going to be able to collect that. Are you going to spend more money and legal fees to go collect on a judgment from someone who wouldn't pay you your rent while they were there? No. Like you're just that, that, that judgment is frankly worthless. So from where's your most likely source to get paid? The government that can go back. They can pay some back rent. So you want to get engaged on this? I know it sucks, but it's, it's the only way right now.

Yeah. Yeah. Well, and one last political disclaimer. I do get some hate mail from the right side of the left side. I know it's weird. Some of you are like, well, Mark, you are totally on the conservative right side today on this rental issue. And I will concede and probably say yes. I think the government should stay out of the private sector in this area. After the emergency order was issued, things have settled down a little bit, back out, let people run their lives financially. But I want you to know too, there are some right side Donald Trump politics that I hated. Donald Trump wasn't perfect. The Bushes weren't perfect. Right now Biden is doing some great things in some areas, whether he knows it or not. But there's some things I don't like about Biden. So all of you, I would ask you this as a final little side

note, by the way, go finish your

thing is be politically understanding. Be understanding that no one party has all the answers. No one political position is going to make it all the world. Right. There's good and bad things Biden's doing, there's good and bad things Trump did. And we can go back from and analyze every president in our history, whether what side of the aisle they were on. And so be a little temperate in your hate mail on the web to everybody, anybody that's out there. Now, if they're is staunch in a position that they don't see both sides, then they maybe need a little slapping around. But Matt and I are trying to recognize the good and the bad and be moderate and just try to make life work anyway. Is that okay? Matt?

Yeah. Mark really cares what you guys all think, so, I mean, I do too. But when it comes to politics, I know everybody disagrees on it, so I just can say what I think. I don't care. You may not think what I think. That's okay. I'm frankly, kind of all over the place.

So.

And I think everyone's wrong in politics and they all suck. So. But, and if you don't agree, that's okay. That's fine like that. That's. We don't need to agree. But I just, we just want to get this out there for those landlords. This is a different conversation than what you've heard out there. If you're a single family landlord or maybe you even got a larger number of units, there are resources and tools out there. Hopefully this is helping understand where things are sitting right now, things you can be doing. And maybe you got, you know, feel a little vindication here on some of Mark's comments about how it is affecting the landlord. This particularly the small single family landlord out there. That has been forgotten in the conversation.

Yeah, yeah, well said, Matt. And I like what you said. I was trying to say it's okay and be with, be good with. It's okay. That's the roundabout way of what I was trying to say too is if you don't like my opinion or Matt's opinion, it's okay. And it's okay if we don't like your opinion, but we can get together on a podcast and talk about building wealth and not have to kick the crap out of each other. It's okay. So let's, let's play nice in the sandbox. You know, I hated that kid in the sandbox that came in and would kick sand in my face and. Yeah, beat me up. She was really mean. I mean. Yeah, she was. She was. Oh, sorry. He was. Maybe I got beat up. Girls in the sandbox. I'm just saying.

But you know, whatever you got, let's see Alice, talk to your therapist about that. Well, thanks everyone for listening to the Main Street Business podcast. You can go to mainstreetbusiness.com to check out more about the show, other episodes, and also to sign up for our newsletter which comes out every week announcing the shows you may have missed. Also some of our articles like Mark talked about and you can get details on our upcoming workshops.

There you go. You wanted to say we've got all sorts of workshops. We've opened up Dallas for a master's class one on one with Matt and I in the evening on high end self directed strategies. We've got the self directed IRA Summit with the golf tournament for charity in Phoenix. I've got workshops in Chicago, Orange county and Honolulu and a one day in Dallas.

So the business owner's workshops.

Get out, have some fun.

Yeah, we're workshopping, baby.

Yeah, we're back to normal.

Yeah, we're workshopping.

All right. See you next week, folks.