Real estate investment during the Covid era

Oh, how everything has changed – quickly! If you are still investing, I would love to hear how you are adjusting and what you see in the future. I’ll start with some of the Covid changes we’ve already made.

THE NOTE: Much of what I share, we are already experiencing and changing in our own business. In many ways, we rely on our experience of investing in real estate in 2008-2010.

  1. Do not stop. Historically, real estate has always worked, you just need to adapt to market changes. Hence:
    • stay flexible
    • find out and secure funding
    • stay involved with online networking groups – both local and national – to stay on top of the changes you need to be aware of when they happen.
  2. We have increased our marketing. Why?
    • People will need money, which means selling their personal or family property. We want to be available when the need arises to offer all the help we can.
    • Already, fewer investors are buying due to fear of the future and lack of funding, so the best time to enter the market has been for many years!
  3. Get an education. What we saw recently is exactly what we experienced in 2006-2007; everyone invested in real estate because it was so easy. As business gets more complex, there are incredible opportunities for those who are prepared, informed, and educated.
  4. Buy cheaper. We all know that the future is filled with uncertainty. In the coming months / years, prices may drop dramatically. Sellers know this too, so many will want to sell sooner rather than later. They also understand that you are taking their risk when you buy, so they understand when you are offering less than they hope. And, indeed, you are at risk. When you make an offer, make sure that this is the price you can live with if its value drops over the next 3-6 months.
  5. Properties are still selling well, so you can buy real estate quickly – now is not the time to buy big rehab!
  6. Buy and sell virtually. This is the perfect time to learn how to virtualize your business. We are currently doing a due diligence online, asking permission to walk through the property and take photos, and then ask the seller to either send us interior photos or leave the property while we go in and take photos. Vendors value our concern for their well-being. We require them to authorize a pre-closure inspection of the property to ensure that their own photographs are not missing out on what we need to be aware of.
  7. Get ready for longer days in the market when selling. Watch the days of local property sales on the market for an idea of ​​what to expect. As lenders begin to dry up and / or increase their borrowing needs, there will be fewer qualified buyers and both the sale and the close will take longer.
  8. Expect lenders to tighten borrowing requirements
    • We have already seen how private lenders stop lending out of fear of future risk and the need to keep their funds safe.
    • Many hard money lenders stopped lending collectively because they were pooling loans and selling them. These loans are no longer bought, so these lenders are no longer lending.
    • Banks have stopped offering gigantic loans, which means they are already worried and responding.
    • Pretty much anyone who still lends has started demanding that the borrower has more funds, a higher credit rating, and a stronger applicant in every way. They also increase scores and interest rates.
  9. Higher priced properties will be the first to slow growthso focus on properties that are below the average price in your area (and know what that price is!).
  10. Expect this “event” to last for a while – maybe years. In 2008, everyone believed that the worst was over and things were getting better. “Business”, however, continued to deteriorate.

Remember, we are entering the “new reality” very early, and it is difficult to predict what awaits us. Stay informed, stay flexible, stay informed, stay connected with other investors. You can always make money on real estate.

Do you agree / disagree with what I have shared?

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

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