Page 31 - 57802 Summer 2020

High unemployment adds risk of homeowners and landlords rid No one knows with certainty
rent defaults. If you’re a renter and themselves of the housing albatross what lies ahead for current real

can’t afford your rent, then your around their necks. estate investors, homeowners, and

landlord may face their own set of vacation rentals post-pandemic.
challenges. Many landlords used It is a well-known fact that fi nancing

their savings to keep their property is the sti cking point on every deal. As you navigate real estate investi ng
and lifestyle afloat. You can run a Whether it’s a real estate, retail or post-pandemic, beginning and

business without making a profit, but service transacti on, it’s all about the experienced investors can rely on a
you cannot run a business without money. few fundamentals.

cash flow. So, landlords of houses,
duplexes, and small apartment Financing, or lack thereof, will First, we always look for bargains.
complexes will face challenges compound this pandemics tumult. In As in any business, you make your
when their renters can’t pay their April 2020, Chase Bank announced money when you buy. Second,
rent as high unemployment adds their new requirements of a 700 run the rental cash fl ow numbers
risk of rent defaults. FICO score, along with a 20% down carefully with someone experienced,
payment to buy a home. According qualifi ed, and knowledgeable. Last,

The Vacation Home Rental Industry to Chase, those lending standards invest in areas that you know and
is big business, as many choose a also apply to refi nances on non- with people that you trust. As my
fully furnished home or apartment Chase mortgages. father taught me, there are two
with bedrooms and bathrooms times to invest in real estate. The

along with a full kitchen and laundry Wells Fargo is now requiring new fi rst ti me was 20 years ago. And the

facilities. For a family or gang of customers to bring at least $1 second ti me is now.

friends, a vacation rental is more million in balances if they want to
affordable and fun when compared refi nance a jumbo mortgage, up Stuart Gethner is a seasoned Real

to a resort or hotel. from a previous level of $250,000. Estate Investor who has personally
The change came in July, making it invested in over $10 million in

Last year, the online vacation rental far harder for customers to qualify. single-family residences, commercial

market accounted for almost 30% of properties, industrial complexes,

all vacation housing. So, here’s another dilemma. As land opportuniti es, and hard-money
this is a seller’s market, there are lending transacti ons.
Arizona’s number one crop is multi ple off ers on many properti es.
tourism. So, when the terrorist Some off ers have escalati on clauses From the start of his investi ng tenure,
attacks of 2001 hit America, the allowing the seller to take a higher Stuart has been educati ng others how

travel industry came to a standstill. price if and when there are multi ple to fi nd deals and properly execute on

There were few vacationers during off ers. Oft enti mes, the appraisal them.

the 2008 financial crisis, and families arrives, and it does not match the
were scrambling to keep their buyer’s off er price. The buyer must He is the CEO of Gethner Educati on,
homes. Currently, the pandemic has now come-up with the extra money Coaching & Consulti ng, and has
disrupted the travel industry from to ascertain the loan. coached hundreds of students on how
family vacations to business travel. to successfully invest. He also founded

Zoom has become a household Or, the buyer walks away from the and acti vely heads up Networking REI,
name. property, frustrated, leaving the a thriving real estate investi ng group
seller frustrated as well. that meets on a monthly basis.
Most of Arizona’s tourism is in the
winter/spring months as no one The COVID-19 virus pandemic and Over the years, Stuart has acquired a
wants to come to our fabulous subsequent recession leave us in great deal of experience in purchasing
resorts, golf courses, and outdoor uncharted territory. No one knows with cash, traditi onal fi nancing, seller

activities in the summertime. Hence, if a deadly second wave looms on fi nancing, and hard money lending. In

the advent of “staycations” to host the horizon or how long it will take additi on, he has parti cipated in Lease

local residents at discounted rates for businesses and job markets to / Opti ons, Subject To, wholesaling,

to keep the cash flow coming was recover. Morningstar and Financial Fix-&-Flips, as well as his favorite: Buy
invented. The pandemic is creating Times believe tourism won’t return & Holds.

havoc on the vacation rental to pre-pandemic levels for at least
industry, especially in Arizona. two years AFTER a vaccine has You can learn more about Stuart at
been discovered and distributed htt ps://stuartgethner.com/
Therefore, there will be upcoming worldwide. And Arizona needs

opportunities to help both tourism to help thrive her economy.
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