John Casmon

Critical Conversations to Survive the Coronavirus Pandemic with Matt Faircloth, Episode 177

Matt Faircloth was scheduled to talk about multifamily and marketing, specifically his YouTube and BiggerPockets presence. However, with the impact of the Coronavirus on many multifamily investors, we felt it was better to talk about how he’s adjusting operations real-time in response to the Coronavirus pandemic.

Matt is the President and Director of Operations at the DeRosa Group and has completed over $30 million of real estate transactions. He also is a frequent contributor to BiggerPockets and the author of Raising Private Money. In our discussion, Matt shares the key conversations he is having now to continue to run a successful multifamily company, why money hard is a bad idea, and how he is diversifying his portfolio going forward.

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Key Insights

Resident base is workforce housing, which is not able to work right now
What will April, May and June rent collection look like?
Goal is to get his business stabilized over the next few months
Speaking with property managers to focus on retention and working on payment plans as needed
Local SBA is offering loans to small businesses
Have empathy for a resident and their financial situation
Some states have stopped evictions and agency loans have made it a requirement for loan forbearance
Did not plan for a “pandemic” event, seeking options for mortgage reprieve
Bridge loans are structured to get you from “temporary” loan to an agency loan (Fannie or Freddie mortgage)
Downside of asking for forbearance is showing weakness to the bank and having it impact future loans
If you have interest reserves, it may be worth asking the bank to use those funds
Worst thing for a resident is an owner losing the property to the bank
Older owners may be ready to sell coming out of this pandemic
June – Aug may be a great time to get deals that make sense (not trying to be a shark)
Think equity (passive investors) are waiting to gain clarity before investing
Working on creating a blended, diversified investment fund
AirBnB arbitrage investors are being crushed
Now is the time to over-communicate with investors and keep the marketing wheel spinning