Coronavirus (Covid-19) Investor FAQ

Western Wealth Capital has planned weekly updates, or as needed, in order to keep our investment partners up to date on our current assets and future acquisitions. The following are responses to many of the common questions we are being asked.  We will continue to update the information below so please check back if you have additional questions or would like further information. We always welcome you to contact us as well, though we ask that you please be patient if our response times are slower than usual during this busy time.

April FAQs 

1. How do you expect the changing market conditions to affect any planned supplement refinances?

Prior to the market changing, we were working on finalizing the terms for the supplemental refinancing of 2 of our properties. We are working closely with the lenders to finalize the terms and complete the process. Due to the current situation, lenders are experiencing delays in processing requests. Once we have a clearer picture of how we will be moving forward with the loans we will communicate to the investors in those projects.

2. Has Western Wealth Capital applied for any of the government assistance programs being offered in both Canada and the United States to help cover wages for employees both at head office and at the properties?

Western Wealth Capital Management, which employs our Canadian staff as well as WWC Operations Corp., which employs our U.S. staff have both applied for wage subsidy programs in order to help lower overhead costs. Our property management partners have also applied for subsidy programs and any benefits received will be passed down to the properties to further assist us in lowering operating costs.

3. While you were able to pay all mortgage payments for April, do you foresee there being a need for forbearance on any of the loans in May?

As of April 20^th, we had collected on average 93% of rents across our portfolio and remain encouraged that we will hit our prior average monthly collections of 95%-96% for the month. We have added a section to the Daily Activity Reports that we receive from each on-site manager to include the number of outstanding rents. These daily updates include further details on each individual case and when payment will be expected. We are currently collecting data on each property and will move down the path of preparing forbearance applications if the need should arise.

 4. Does WWC anticipate the need for a cash call to any limited partners and what efforts are being made in order to avoid a cash call?

At this point we do not anticipate the need for a capital call to our limited partners. We have put in place numerous controls at our properties to manage operating expenses and cash flow, including daily tracking of rent collections against our break-even income amounts. Should any of the properties not achieve break-even collections, we have the option of applying for mortgage forbearance. Finally, the majority of our assets still have funds in their capital expenditure accounts, allotted for property improvements, which we could use a portion of to help us through the current situation. In short, there are many steps that we can and will take in an effort to avoid any capital calls to our investment partners.

 5. How will the launch of your new property management company, Western Wealth Communities, benefit the investors?

We made the decision to establish our own property management company to more fully create value for our investors by having total control over executing property management the WWC way. With Western Wealth Communities we will be able to further enhance our operations and the implementation of our value-add programs in order to achieve the best possible results for our investment partners while ensuring that we continue to support and improve the lives of our residents.

6. How does Western Wealth Capital see the current situation affecting their acquisition pipeline for the rest of the year?

We cannot predict how long this current economic environment will last, but we do know that there will be owners looking at selling strictly due to “owner fatigue”.

Yes – However the pace will be slower. Plus, we will watch the demand of the Gold Star renovated suites in locations where prospective tenants are moving from A class higher rent properties asking for our renovated suites at a lower cost per square foot.

Our property managers and asset managers are doing a great job educating our tenants on city, state, Federal and 3^rd party funding for rent and food programs. If we have tenants that have reduced wages, we will work with them on a case-by-case basis.

Yes we have to make our mortgage payments. However many of the lenders are providing forbearance programs on properties that are required.

Any case-by-case situation where a portion of the rent isn’t paid or not paid in full it is deemed deferred.

Western Wealth Capital has taken control of cash management at all our properties.

March FAQs

1. Question: Does Western Wealth Capital plan to continue with the most recent projects undertaken (Desert Willow, Stone Canyon, Winters Creek) and are there any related updates?

Yes, we are planning to continue with these projects. At present everything is on track as planned.

2. Question: Are there plans to extend the closing dates for these projects to acquire additional information and decide based on the changing market conditions?

We do have options to extend and we are working closely with the sellers and lenders on various terms and conditions that will be in the best interest of our investors.

3. Question: What does the current situation mean to the outlook and projections related to financial results of Western Wealth Capital projects?

At this point it is too early to predict the impact on the financial performance of the projects. We are monitoring the situation closely and our proactive asset managers are working closely with our property management partners to protect and promote the best outcomes for our investors, our residents and our team.

4. Question: How are residents of Western Wealth Capital properties being affected by the job market and what is the potential impact on delinquencies and rental rate increases?

Western Wealth Capital has been monitoring the situation very closely and continues to plan for a variety of scenarios. We have demographic and employer information on our resident base and are completing assessments on each of our assets with that information in mind along with other market information in order to help inform our plans. While we continue to see relatively steady leasing traffic as we’ve deployed virtual tours and other methods to tour during social distancing, leases are still seeing rent growth with new leases. We are also seeing a decrease in resident turn over as people are not wanting to move at this point in time, including more demand for renovated units as tenants are preferring a unit that has not had anyone in it previously. WWC is helping residents that may require financial assistance by providing them with information on City, State, Federal and Third-Party programs. At this point it is too early to tell what degree this may impact rent increases in the future.

5. Question: Does Western Wealth Capital typically utilize fixed or variable mortgage rates? Is there potential for us to negotiate a lower rate on existing mortgages?

The financing is determined on an asset-by-asset basis. We continue to evaluate adjustments and options to our financing for opportunities that may be favorable for investors. As usual, we will provide any property-specific updates in due course.

6. Question: What are some of the initiatives that Western Wealth Capital is taking during this unprecedented time?

1. Janet LePage and Dave Steele, along with the Senior Executive Team are now having regular discussions involving all of our property management partners in order to brainstorm and share ideas on how to best serve the communities while protecting our investors interest.
2. Janet LePage is engaging in similar brainstorming sessions with leaders of some of the top real estate investment firms in North America in an effort to share further ideas and information amongst industry leaders.
3. We are investigating and considering all options as to how we can potentially assist residents of our communities during this unprecedented situation. We have several initiatives across the properties and at the community level to help residents find access to services that will help them continue to pay their rent.