We Are Human

March 23, 2020

Dear Wealth Rebel,

As I sit here writing this letter, the world has changed drastically in the last 11 days.  Really in the last few weeks…but the last 11 days have been quite possibly the most disruptive time that most of us have known.

I’ll speak for myself.  As an infectious disease epidemiologist, I’ve been glued to the stats of COVID-19 for weeks now, watching how the very disease I was trained to stop move like a silent enemy across the world.

Viruses know no borders, economics, gender, race, ethnicity.  They don’t care what job or office you hold or your political preference.

Viruses have one job… to take over the genetic machinery of its host and reproduce.

That’s it.

We are battling an enemy we cannot see.  And that, I know, that can stoke fear.

And rightfully so…

I trained for this exact moment.

But, even though I trained for it… I can’t control it.

I can only control what I can… my humanity

Is this “THE” disease that unravels humanity?  No, it is not.

It is definitely a reminder that we humans are indeed a vulnerable species.

But most importantly, this pandemic is a reminder we are HUMAN.

And what makes us human is our ability for compassion, faith, and love.

I know that might be hard to comprehend if you are living paycheck to paycheck…

… if you have lost your job,

… if you have little in the way of savings.

Or if you have a loved one that is ill or in a vulnerable population group right now (Hey…I’m there with you… asthmatics unite!).

In a time like this, I wanted you to know that I am walking this road with you.

Remember, you can only control what you can control…

Your preparedness, your emotions, and how you react.

With that, I want to share my resources with you… my personal resources and answers to questions I’m getting daily.  And, if you are on the Ash Wealth Club email list, you will get updated educational resources you can use NOW to build your business or get your financial house in order.

My Personal Resources

I will keep this section updated over time!

Do you need a basic preparedness gameplan?   Here is the exact preparedness gameplan that we use.

Do you need to homeschool?  I’ve always wanted to homeschool (albeit, I wish the situation was very different).  Here are my schedule and resources I’m using with my daughter during these next few weeks as schools are closed.

Do you have rental property and you need a plan for the next few weeks? Neal Bawa of Multifamily University did a great presentation on this virus will affect the stock market and shares wonderful tips on how he will handle upcoming tenant issues.  He will also update this presentation it appears weekly, so check back here for the latest links.

Are you just starting out in real estate and aren’t sure how this will affect the real estate market? BiggerPockets did a great round table discussion on what this “black swan” event means for real estate in the near future.  BP will also do a second panel in a few weeks as the situation evolves.

Answers to Your Questions

Many of you have written to me and asked what I’ve done about (insert situation).  Well… It really all depends on your situation.  Here are a few of my answers to your burning questions below:

1. “What do I do about my stocks in the stock market?”
   • Well… (you are going to hate this) it depends.  Personally, I think the stock market is akin to a gambling casino.  I don’t gamble.  My husband does have a TSP account. When China went on lockdown in February (and knowing what I know about global pandemic response and the impact that has to supply chains), I begged him to move the majority of his holdings to cash (mostly, so we could take a cheap loan against his account if the bottom fell out of the market). That said… what I didn’t foresee was the bond market getting ravaged as well (where I have some smaller holdings from a previous account). Should you sell now?  Personally, at the time of my writing, I don’t think we have seen the bottom yet.  But, you can only know that in hindsight.  My plan is to hold since I don’t need these funds for years.  I think the question this brings up for most people, can you really stomach having money in the market, and what exposure are you truly comfortable within stocks?
2. “What are you going to do with your rentals if your tenants don’t pay?” 
   • First, I like investing from a position of strength.  So I’d encourage any investor they have a minimum of 6 months of cash on hand to float their personal finances, and a minimum of 6 months cash on hand to float your investment hard costs (PITI).  Now… if you did this backwards and don’t have the reserves to support your investment, here are some thoughts on what to do for the next few months regarding rents:
     • April – Operate with the expectation your tenants are going to pay.  If by the 10th (or whatever day your lease says), they don’t pay, post a pay or quit notice.  This will identify the tenants who truly can’t pay.  Get a letter from their employer they are indeed unemployed.  Then, supply these tenants with a one-pager on how to get financial support in your jurisdiction (ie. rent relief, unemployment, etc).  If the tenant still can’t pay, think about reworking their lease to give them 1-month free rent, and amortize that month over the remaining time of the lease.  You are working with them and they are avoiding an immediate eviction. ***NOTE*** Work with a local property manager or lawyer to stay compliant!
     • May – If your tenant does not pay again, reach out to your lender to know your rights to forebear your loan.  This does not mean you aren’t going to pay your obligations.  It means you are preserving YOUR reserve cash now to work out the situation on the backend of the loan.
     • June – Many economists are predicting the recovery to begin by middle of May based on the math that this virus will have burned through most of the US by then.  But let’s say your tenant doesn’t pay again.  Think about applying for government relief in the form of an SBA loan.  (And for those who have to, eviction courts should be back up and operating by then).
     • If delinquency still high in July and August, think about if this property is viable.  This will be a personal question to answer.  Personally, I have 6 lease turns happening between May to August.  I’m pretty stoked in this situation, as I can work to keep my dream tenants in place.
3. “Are you still buying right now?”
   • I continue to execute my investing plan for the year.  However, I’m not in a hurry to pick up a deal in the next 6-8 weeks.  I’m preserving my cash now and I continue to look at deals.  If one really hits me, I’ll consider snagging it.  I do believe that investors will have big problems to solve for people in the next 6-8 weeks and should be prepared to help out by offering solutions to those who have to sell (ie. I think there will be deals coming soon).
4. “I have a property under contract. Should I buy (X) now or wait?”
   • Again, it depends.  I encourage everyone to invest from a position of strength.  Make sure you have personal reserves for 6-12 months, reserves to cover your property(s) for 6-12 months, and THEN think about investing. If you can check those boxes, and your potential property makes sense with very conservative underwriting, then consider going for it.
5. “How are you handling rehabs and other holding costs right now?”
   • If you are doing a rehab right now (or have one planned), underwrite that your rehab will go twice as long.  Additionally, if you are flipping, think about multiple exit strategies (this might not be the time to flip!).  Also, add additional time to get anything from the city (ie. permits, sign-offs)

Keep your questions coming!  I will update this page accordingly.

Where to Go From Here

I know I started this letter to you on quite the frank note about our global situation.  I don’t believe in sugar-coating things.

I also believe HUGELY in resilience.  We will get through this.

We will do it by watching out for each other, sharing resources, picking each other up when the other is down, by showing the world love…

By being human.  

Remember, even now, you are just one deal away….

Whitney