How the Cares Act will help us agents and brokers

HOW THE CARES ACT WILL HELP US AGENTS & BROKERS

Kamesha Keesee

Signed into law on March 27, 2020, the Coronavirus Aid Relief and Economic Security (CARES) Act provides a wide array of options not just to the people, but also to the agents and the brokers who may be facing financial hardships due to the Coronavirus pandemic. The CARES Act contains special provisions that are aimed at helping people struggling to pay their mortgages or rent. The country has covered $170 billion tax break for the wealthy investors in the real estate industry, and that too was included in the stimulus package. However, what other provisions in the CARES Act that could have an impact on the real estate industry or, how will the CARES act help the agents and real estate brokers?

FINANCIAL SUPPORT AND INCENTIVES

Remember, the CAREs Act has a provision that mitigates the loss of businesses to small scale businesses in the country and provides these small-scale businesses with financial support to help them stay afloat. Like all the small business with fewer than 500 employees in the country, many brokerages may qualify for the financial sustenance and backing from the Federal relief package. Some of the financial relief packages offered include;

The Paycheck Protection Program which provides up to $10 million in loans, but that will largely depend upon payroll. One thing to note however is that these loans are forgivable, but the business has to meet specific criteria, including that 75% of the loan amount given to it must be used to pay the employees. Also note, the application for this relief program are provided through certified lenders and not the SBA itself. The Economic Injury Disaster Loan program is a program that offers small businesses up to $2 million in loans. These, unlike the PPP, are not forgivable loans but can be used beyond payroll. These loans can be applied directly through the SBA.

One thing that real estate firms and professionals have to remember is that independent contractors will not be considered as employees when reporting payrolls; however, that does not mean that lenders cannot bend some rules, some are willing to make exceptions.

The realtors who work as independent contractors can independently qualify for the SBA programs individually.

TAX INCENTIVES

The CAREs Act has included several incentives that the real estate agents can take advantage of and gain immensely. A real estate firm with steady cash flow may benefit more from the tax incentive. The businesses with not so steady cash flow can take advantage of the SBA programs. Some of the tax incentives include;

Increased deductions. Under the CAREs Act, the business interest expense deductions were reduced from 30% to 50% of the adjustable taxable income. This mainly is helpful to the investors of the industry who utilize a large amount of leverage. Extended identification period. This happens with 1031 exchanges, the 45-day and the 180-day periods to identify properties to exchange if it is set to expire between April 1 to July 14 of this year, it will now expire on July 15. Opportunity fund deadline extension. Like the Extended identification period, if the 180-day period to roll over the gain from the sale of a property in an opportunity zone falls withing April 1 to July 15, investors can now invest on July 15. Employee retention credit. This is a refundable credit which applies to 50% of up to $10,000 wages.

CAREs Act Real Estate Provisions Also included in the stimulus package is a moratorium on foreclosures for the single-family homes. The buyers with federally backed mortgage loans may request forbearance without documentations. Also, the federally backed multifamily mortgage loan payments have a forbearance program but come in 30 days unlike for the single-family homes which come in 60 days. However, for the multifamily, it can be renewed twice, which totals to 90 days. While the CAREs Act has been praised as one of the largest economic stimulus packages in the history of the US, many experts argue that it is not enough to bail out citizens and prevent a financial crisis completely. The congress is considering a second financial incentive. If you would like to learn more about how the CAREs Act is helping real estate agents or how you can take advantage of the CAREs Act, talk to Kamesha Keesee.

Kamesha Keesee epitomizes hard work, resilience, compassion, and creative service delivery in every detail of your real estate transaction, from the start to the closing. Kamesha’s journey in real estate business began when she was 15 years old, where she was employed as a teller at Security

Pacific Bank. Being energetic and as curious as she was, she quickly adapted to the changing employment environment and became a personal loan officer. To learn more about

Kamesha Keesee, follow this link https:// thepowerisnow.com/kamesha-keesee/.

Sources;

https://www.bizjournals.com/sanantonio/ news/2020/04/15/what-the-cares-acthas-to-offer-real-estate.html https://www.mashvisor.com/blog/caresact-2020-impact-real-estate/ https://www.zillow.com/agent-resources/ blog/cares-act-for-brokers-and-agents/