SAN DIEGO (KGTV) — A property owner in Normal Heights has arranged for his tenants to have free rent for the next three months, due to financial concerns stemming from the coronavirus pandemic.
Jeff Larabee owns an office building on Adams Avenue where he also runs his business, Larabee Real Estate.
He had been a tenant there for about eight years, before he bought the property last year.
He says the majority of the tenants are self-employed small businesses, like massage therapists and estheticians. They were hit hard when the state issued a stay-at-home order and forced non-essential businesses to close.
Larabee said tenants started calling him with concerns that they would be unable to pay their rent while they were unable to work.
So he went to his bank and spoke to his lender, who was initially skeptical of any sort of payment freeze.
“He was alluding that they would offer three months of interest-only payments,” Larabee said of his mortgage lender. “Then I started running the numbers and thought that doesn’t help me.”
Larabee went back with a plan.
“I need this block of months taken out of the loan and put onto the back of the loan,” Larabee told his bank, referring to the next three mortgage payments.
They agreed, allowing Larabee to have three months of mortgage abatement, extending his payment period by three months.
While he will eventually have to pay it back, he passed the relief directly to his struggling tenants, who will get three months free, without having to pay it back later. Assuming he can keep his tenant occupancy filled, he says its a win-win-win situation.
“The bank wins because I’m not going to default on my loan. I win because the tenants are going to be staying here. And the tenants win because they have three free months of rent,” he said.