The CDC Eviction Moratorium has officially ended, thanks to not 1, but 2 Supreme Court rulings. On 08/26/2021, in a 6-3 decision, the US Supreme Court ruled the CDC's eviction ban to be unconstitutional and illegal. And while that is great news for landlords, what does that mean for real estate investors? What's next? What should you be doing? Find out in this very timely message.
Action Step #1: Move Fast with Cash for Keys
In the comments of the Supreme Court ruling , it stated that it should be Congress enacting an eviction moratorium. So, Congress might move, and they may move quick. It’s not that the entire subject of eviction moratoriums is over, just the CDC version of the eviction is over for the time being. So, if you are a landlord with a tenant who won’t move out, you need to move fast on this.
However, house flippers need to move fast too. Many house flippers are doing deals with motivated sellers who have a deadbeat tenant in the property and can't get them out. This is preventing them from closing on the deal. Now is the time to move quickly. That doesn’t mean taking this to your local eviction court to get a ruling quickly. Eviction courts are slam packed full of cases. There is another option.
Cash for Keys
The other, fast option is what I call cash for keys. That's where you say to that deadbeat tenant, “I'll give you X number of dollars to move out”. With the eviction ban, when we said that, it had no teeth. We had no negotiating power. Now we can say, "It's over, you need to get out and get out now. And even though you haven't paid rent in 18 months, I'll pay you a little bit of money to leave."
Cash for keys is not something that feels good, but it's something that works very well. We learned this when the first eviction ban ended. We started getting tenants out of the property because they thought the eviction moratorium was ending. Remember, tenants don't want to be evicted. Eviction is a very uncomfortable situation, it's intense. People don't want to go through that. They'd rather have a time when they need to move out and some organization. So, the cash for keys is highly effective, but it's only effective when the eviction moratorium is over.
Action Step #2: Get Your Money
What about all those landlords that need money? Landlords go get your money. I'm not going to go into detail of how landlords go about doing this because there are plenty of local resources on how to get the stimulus money that is earmarked for you. The latest statistics are that less than 10% of all the money available to landlords during this time have been dispersed. It's ridiculous. If you're owed any money, if you're a landlord and there's money out there for you, go figure it out. That's what economically productive people do.
Action Step #3: Market to Non-Owner Occupied
This is a great opportunity for you to market to non-owner occupied. I have a great video about a tool called PropStream. That's the best tool that I've ever found in our industry for being able to develop lists, and you can target those lists through a myriad of ways with that software.
Now, I'm not telling you to lowball landlords that are struggling because of this eviction moratorium. However, if you market to them, you could be of great assistance to them. You will reach some of those landlords who've really been hit hard by this. And maybe you can be more like a life raft for them. I'm not saying take advantage of them. I'm saying you could be a help for them to be able to make one decision or the other. Maybe just getting the letter from you is enough to get them moving in the right direction.
The Time is Now
This is not the time to rest on your laurels. I'm not necessarily jumping up with victory here. I'm excited for what's happened because it gives us the small window for cash for keys, small window to market to non-owner occupied, and you should be demanding to get whatever stimulus money is owed to you.
Disclaimer: I am on the side of landlords. This is not political in any way, because the last two administrations have been a part of this piece of unconstitutional and illegal legislation. A big thank you to the Alabama Association of Realtors who fought for this and are helping everybody across the country. A lot of money has been spent to fight this illegal, unconstitutional policy.
Guadalupe L says
You give us interesting information always !, Thank you Phil .
Herman Remus says
Great video…still haven’t connected with you but always great material.
Your the best!
paul mcconnon says
Janina Sowden says
Amen Phil and thank you for bringing the info
Kim brophy says
Still love your vidoes Phil! Thank you!