Managing Hits to Your Property Management Cashflow During the COVID-19 Pandemic

Feeling anxious about how to manage your property management cashflow during COVID19? We got you. Hopefully you’re safe and at home during these crazy times. If you own a property management company and you’re worried about your cash flow and your business operations during this unprecedented pandemic, this episode of The Property Management Show is exactly what you need. Greg Crabtree is with us today, and he’s the author behind the book: Simple Numbers, Straight Talk, Big Profit. We’re discussing how to manage cash flow and ease the stress that your business may be feeling. Introduction to Greg Crabtree Greg has owned a CPA firm for 33 years, and in January he merged with one of the Top 20 Accounting Firms, Carr, Riggs & Ingram (CRI). This has perhaps turned out to be one of the timeliest mergers in history because he now has access to 2,000 professionals who can help businesses with consulting and expertise in times of crisis like we’re experiencing now. The consulting Greg provides is based on the Simple Numbers book. There’s a COVID19 task force set up to help you, so if you need additional resources, be sure to check out cricpa.com and look for the resource link. You’ll find additional information that applies to your property management company that includes: * Loans available to companies like yours * Business interruption insurance and whether it applies * Employment benefits and extended sick leave requirements The Simple Numbers book helps entrepreneurs understand their financials in a clear way. It also provides guiding principles. Companies that have followed the guidance provided in this book are not in a state of panic right now. They were prepared for the crisis and they’ve avoided a lot of the pitfalls that other companies are experiencing right now. This is why Greg is on the show today. He has a lot of experience working with accounting in property management firms, and he’s going to help with your cash flow. How to Manage Your Property Management Cashflow During COVID19: 1. Payroll Protection Plan: Apply Now At the top of the list of things you have to do right now is to prepare to apply for the Payroll Protection Plan (PPP). Every property management company that has employees and 1099 contractors can benefit from this loan. The information on applying for this loan has been changing day to day, and finally we have a base for how to do it. You’ll need to use calendar year 2019 wages when you apply for this loan. Now that we know this, you can start preparing what you’ll need to access PPP funds. This is not hard to do: * Look at your 2019 wages paid that do not exceed $100,000 for your highest paid people. * Add those wages and divide the number by 12. * Multiply that number by 2.5. There’s the amount you’ll be working with for your PPP application. Here’s an example: If you paid $600,000 in qualified wages in calendar year 2019, that divides into $50,000 per month. Multiply that by 2.5 and you get $125,000. You need to be in line today with a lender to apply for a loan to cover that $125,000. If you visit SBA.gov, you’ll find application forms that you can download. That’s not the application itself; you’ll get that from your lender, but it’s the information that you need to start gathering. Funding is expected to come through at the end of April or the first week of May. The eight weeks after you get funded is your evaluation period, in which you determine how you’ll spend the money. This loan is potentially forgivable. This is important because we will never see another forgivable loan in ...