Real Estate Investing in the Age of Covid


My, how things have changed – quickly! If you are still investing, I would like to know how you are adjusting and what you see for the future. I’ll start with some of the Covid changes we’ve already made.

NOTE: Much of what I share is what we are already experiencing and changing in our own business. Much of it is based on our 2008-2010 real estate investment experience.

  1. Do not stop. Historically, real estate still works, you just have to adapt to changes in the market. Therefore:
    • stay flexible
    • learn more and get financing
    • stay involved in online networking groups – both local and national – to stay on top of the changes you need to be aware of as they happen.
  2. We have increased our marketing. Why?
    • People are going to need the money, which means selling their personal properties or those of their family members. We want to be available when a need arises to offer all the help we can.
    • There are already fewer investors buying because of fear of the future and lack of funding, so there hasn’t been a better time to be in the market in years!
  3. Inquire. What we have seen recently is exactly what we experienced in 2006-2007; everyone was getting into real estate investing because it was so easy. As the business becomes more difficult now, those who are prepared, informed and educated have incredible opportunities.
  4. Buy cheaper. We all know the future is uncertain. Price values ​​may drop significantly in the coming months / years. Sellers know this too, which is why many will want to sell ASAP. They also realize that you are taking their risks when you buy, so they understand when you are offering less than they hope. And, it’s true, you take risks. When you bid, make sure it’s a price you can live with if the value drops in the next 3-6 months.
  5. Properties are still selling well, then buy properties that you can transform quickly – now is not the time to buy big rehabilitations!
  6. Buy and sell virtually. Now is the perfect time to learn how to transition your business to virtual. We are currently doing an online due diligence, asking for permission to walk around the property and take photos, and then ask the seller to send us photos of the interior or to leave the property as we enter and take photos. Pictures. Sellers appreciate our concern for their well-being. We do require that they allow a viewing of the property before closing to ensure their own photos don’t miss anything we should know.
  7. Prepare for longer days in the market during the sale. Monitor your local property’s go-to-market days to get an idea of ​​what to expect. As lenders start to dry up and / or increase their borrowing needs, there will be fewer qualified buyers and sales and closings will take longer.
  8. Expect lenders to tighten their borrowing terms.
    • We have seen private lenders stop lending because of fear of future risk and the need to protect their funds for themselves.
    • Many hard money lenders stopped lending all together because they were bundling loans and selling them. These loans are no longer purchased, so these lenders no longer lend.
    • The banks have stopped offering jumbo loans, which means they are already concerned and are reacting.
    • Almost everyone who is still lending has started demanding that the borrower have more funds on hand, a higher credit rating, and be a stronger applicant all around. In addition, they increase points and interest rates.
  9. The more expensive properties will be the first to slow downSo focus on properties that are below the median price in your area (and know what that price is!).
  10. Expect this “event” to last a while. – maybe years. In 2008, the common response was that the worst was over and things would get better. “Things”, however, continued to get worse.

Remember that we are very early in the “new reality” and what is to come is difficult to predict. Stay informed, stay flexible, stay informed, stay in touch with other investors. There is always money to be made in real estate.

Do you agree / disagree with what I shared?

What changes have you made or plan to make in the future?

Source by Karen Rittenhouse

Comments are closed.