Julian Sage:                       00:00                    In this video, we’re talking about payments that you have to make to your landlords using the master lease for rental arbitrage model. So stay tuned.

Julian Sage:                       00:08                    Vacation rental machine helps. So suggests like you learn how to start, grow and scale your short term rental business. The show’s all about creating systems that help you automate your business, give any more time and money freedom. If you’re ready to start living the vacation rental life, then subscribe to this podcast today, come and join us on our Facebook group, the host nation, where we’ll be talking about starting automating and scaling a short term rental business. Now onto the show.

Julian Sage:                       00:34                    Hey, welcome back, host nation to another episode of vacation rental machine. I’m Julian Sage with Jon Bell, who is in his garage. Well, it’s not his garage. It’s his the library. Let’s go.

Jon Bell:                              00:45                    I’m just using a virtual background just because I can’t go anywhere. I’m stuck in the house and I just need a new change of scenery. But Julian, you got a great question today and it’s really about us rental arbitrage hosts making payments as we continue to go through this Coronavirus pandemic. And right now the best thing that you can do is if you know that you cannot make your next months’ payments is too proactively go out and contact the landlord and just let them know, “Hey, I’m probably want to be a little delayed in making these payments to you. Is there some arrangement that we can work out so I can get you what I owe once things either start to rebound or once I have my SBA loan”

Jon Bell:                              01:31                    You kind of need to give them an exit on when you can make these payments. Right now, they kind of are in a catch 22. They can’t kick you out right now because everywhere just you can’t foreclose, you can’t evict anybody right now. So definitely be proactive. Go out and talk to the landlords and let them know what your strategy is to either pay or if you have to vacate and pay whatever fees that you need to pay.

Julian Sage:                       02:04                    So Jon, you have quite a few properties that are using the rental arbitrage master lease model that you are responsible for these payments for. Now with all of these properties and during this pandemic, are you having to come out of pocket paying for all of these leases? What are some of the ways that you’re able to cover this?

Julian Sage:                       02:21                    Are you using any of those assistants out there, like the PPP or the SBA loan or anything like that right now?

Jon Bell:                              02:27                    Definitely. So I was able to bring in just enough in the beginning of March to almost meet all of my leases for that month. So I did have to contribute a little bit just from just our working capital to have savings and stuff that we, she’ll be accumulating as we do this business. At the same time. I did go ahead and apply for both of the SBA programs. I kind of was a little early on one and then they introduced another one. So that made me apply for both. I haven’t got any real word back on that, like approval or not. But we’ll see when it comes in and I’ll continue to do that and take whatever free money is out there to continue to stay afloat and keep my doors open.

Jon Bell:                              03:15                    I do have guests in a lot of my units. Not all. So that does help.

Julian Sage:                       03:20                    What do you suggest, Jon, to the hosts that are maybe in situations right now? We’ve actually been hearing from quite a few hosts that have been listening to properties on STR broker trying to offload their units. What do you say to the hosts that are maybe in these situations where they weren’t prepared for having to cover these rental payments or they weren’t prepared that they’d have to start getting in loan assistance? What do you suggest to the people that are in those type situations right now?

Jon Bell:                              03:48                    The first step is what we’re talking about now and that is letting the landlords know your current situation. Second step, if you have not already applied for any type of assistance from SBA, you need to get out there and do it.

Julian Sage:                       04:03                    These funds won’t be there forever and technically they probably will have to do another bill to add more money to it as this whole thing goes on. So you want to make sure you are at least in front everybody else that’s going to be applying behind you. Third thing that you have to do is really consider, is this something that you can sustain for at least a month, maybe two months. If you don’t get your loan right away, you probably need to find a way to secure yourself for the next two until you can get replenished on the end.

Julian Sage:                       04:37                    And of course, one of the last things that you can do is you can list your business for sale. You know worst thing that you could really put yourself in is where your family is in danger. You know, bankruptcy is one of the things that is kind of scary to talk about, but that’s one of the beautiful things about being in the U S is that we, you know, we don’t have to lose our shirts.

Julian Sage:                       05:00                    If you do have to say like, Hey, I can’t make these payments that I can’t make these payments. If you just need to be able to offload your units at breakeven you know, maybe there are other investors out there that are looking for good deal. I mean a good deal is going to be a good deal. So again, if you wants to potentially sell your business, you can go to STRbroker.com. Jon and I would be happy to take a look at it and then we can also offer it to our members of the host nation that are subscribed to our email list. So if you go to STR broker, you can join that list and you can also list your business or potentially find businesses that are available. Question the day, what are you doing during this pandemic? Leave it in the comment section down below. I know for me I finished watching Ozark I went through the whole season. That was like 30 hours, but I crushed it.

Julian Sage:                       05:48                    All right, and until next time, host nation. Keep on hosting. If you’d like Jon and I to answer your guys’ questions and be sure to go to the host nation Facebook group and use hashtag #askVRM. Hope you hosts found value in this episode. If you did, please go on over to iTunes and leave us a review as that would greatly support the show. If you’d like to connect with Jon the community, and I then go on over to our Facebook group, the host nation, talk to you, host in the next episode. Keep on hosting.