Real Estate Deal Analysis & Advice

I’ve Purchased 4 Houses During the Pandemic (So Far)—Here’s Why

Expertise: Real Estate Wholesaling, Real Estate Marketing, Business Management, Personal Development, Flipping Houses
65 Articles Written

First off, I am just as nervous about most of this COVID-19 stuff as everyone else. However, fear of the unknown can’t scare me away from a great deal!

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I am an experienced investor with 13 years under my belt. I mention that because if you are inexperienced, I wouldn’t recommend you do what I’m about to describe that I did.

Recently, I bought four houses—none of which I’ve been in. Yes, that’s correct. I did not enter the houses before closing—or after.

One of the houses will be my personal residence. I bought it based on square footage and the price. After the wholesaler accepted my offer, I then drove by the property to see my future residence.

But I’m getting ahead of myself. My house was the third of the four I purchased. Let’s get into the first two properties first.

Why I Bought Rental Properties During the Coronavirus Pandemic

The first two properties were rental properties that were undervalued. A wholesaler brought them to me, and I knew these were GREAT deals right away.

Here’s why:

  • They were already rented out.
  • Property management was in place.
  • They had $100K worth of equity on the ARV.
  • And the best part… they were under $50K to purchase.

I called around to get funding. Unfortunately, it was difficult due to a lot of lenders pulling out of deals because of COVID-19. I finally found a lender at Carolina Hard Money that was still lending. They were able to smoothly close the deals.

Related: Rates Are Historically Low, But It’s Extremely Hard to Get a Loan—Here’s Why (& What to Do About It)

The terms were hard money rates, however. The key is to take them down. I normally refinance into longer, cheaper money anyway.

(Side note: If you are not familiar with the BRRRR strategy I strongly recommend you read up on it on BiggerPockets.)

These properties are intended to be long-term holds in a newly appreciating market.

Why I Bought a Primary Residence During the Coronavirus Pandemic

The next house I bought was a primary residence. I’ve been wanting to buy a new primary, as I am eligible to get tax-free capital gains on the sale of my current house. Prior to this, I had just never found the right property for me.

A wholesaler bought this deal with me in mind before sending it to me. When he sent it, I was concerned that right now no one is buying because of COVID-19 and most off-market deals in that neighborhood were not moving because they are at top-of-the-market prices.

But I gave in and looked at it. I had done a flip on that street before. However, according to my recollection, the street was a little rough. I wasn’t sure I wanted to live on it. We haggled on price, and he accepted.

I rode through the neighborhood to see what was going on. There was a lot of improvement, but it wasn’t all the way there yet.

I did know new and rehabbed houses were selling for $200/square foot, though. Online it said this house was a 3-bed/2.5-bath and 1,300 square feet. The wholesaler provided me pictures and said the listing was wrong—it was actually 1,600 square feet and five bedrooms.

Related: Don’t Let a Recession Stop You in Your Tracks: 5 Key Ways to Dodge Momentum-Killers

The house was rented at $1,200 to a tenant paying month to month. So, I figured if the house was either 1,600 or 1,300 square feet, I couldn’t lose either way at a purchase price of $135K.

So, 10 days later we closed on the property. Currently, I am working with the tenant to ensure a positive future for them.

Why My Most Recent Investment Was Irresistible

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The last house I bought was another rental—the price was too good to turn down. I wanted to hold off on purchasing right now, but the same wholesaler who sold me the first two properties brought me another home run deal: It was rented for $750, had a $50K asking price, and property management was in place.

I had to pull the trigger ASAP. And I even got the deal cheaper than asking.

Apparently, he had it sold, but other buyers pulled out due to coronavirus. Those investors had intentions to flip it. Personally, I wouldn’t get into a flip in this climate.

The Bottom Line

In conclusion, no matter the market, deals will always be around. Three out of these four properties I bought for return—not speculation.

A lot of people think those who fix and flip make a lot of money; however, flippers take great risks to get their checks.

I don’t know about you, but I wouldn’t want to have a $500K-plus house to retail right now (even though in Charlotte, North Carolina, retail sales are currently very strong).

Regardless, anything priced above the first-time homebuyer price point is very risky at the moment. Just remember, when you buy on returns, it’s harder to lose on the investment.

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Are you buying deals despite COVID-19? Why or why not? 

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Nasar El-arabi has been involved in real estate for 12 years. During those 12 years, Nasar has wholesaled houses, rehabbed properties, built new properties, created a buy and hold portfolio, and fl...
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    Don Harris Realtor from Charlotte, North Carolina
    Replied 4 months ago
    These are fun times @Nasar
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    LOL, Im making the best of it!
    Barry H. Investor from Scottsdale, AZ
    Replied 4 months ago
    NASAR - I do not know what market you are referring to in your article, but we are getting $1000 to $1100 / Mo rent for $65K homes (completely remodeled) in Kansas City MO currently. The COVID factor is strange because these are the numbers we have been getting for a couple years now, but I am getting more interest in my Turn Key remodels with Seller-financing (also tenant occupied) in the past couple months (i.e. since COVID hit). Buyer / Borrowers of my Turn Keys typically earn 20%+ ROI annually, inclusive of all loan costs and Cap Ex. It sounds like you got that kind of pricing and ROI in a market which normally has much higher acquisition price points, which is great. I would love to hear more about that market !!
    Tyler Parish Investor from Newcastle, Ontario
    Replied 4 months ago
    wowzer, that's cheap. Missing out on those in Toronto :).
    Randall Prosise Rental Property Investor from Scottsdale, AZ
    Replied 4 months ago
    Barry, I love how you always respond to these article comments with advertisement for your business. I have now memorized what it is you do because I have read the same thing many times, and if I ever need a turn-key investment earning 20%+ ROI annually, inclusive of all loan costs and Cap Ex, in KC, I know who to call! Haha. Very clever marketing...
    Dumitru Anton from Cumming, GA
    Replied 4 months ago
    @Randall Prosise, not defending @Barry H., but he had some posts also in the past about getting hanged by some management companies and tenants until he focused, did some self-management, than he brought it in-house. Also, from the same market, down the page you have a "heavy", @Andrew Syrios, who posted for many years here on BP, including many educational tutorials/posts. Education, knowledge, relations, professionalism and been-there-done-that know-how (blood, pain, TTT ... you get it) is not widely available in this business so it is a "trust but verify 3-10 times" type of deal, especially in the turn-key space or "I'm not in my local market and experienced investor" space. Continuos success!
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    This is GREAT and yes people are still parking cash in rentals.
    Ernest Alexander Investor from San Diego, CA
    Replied 4 months ago
    Hey Barry, I am seeking out a few turn-key deals with fair Seller financing terms. Please PM me if you have any others. Thanks! Ernest
    Michael Clay from Charlotte, NC
    Replied 4 months ago
    @nasar Congrats! Thanks for sharing!
    Jason Rushin
    Replied 4 months ago
    This was an excellent article Nasar, Thanks for the great information once again. Keep motivating!!!
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    I appreciate the kind words..
    JJ P. Real Estate Agent from San DIego
    Replied 4 months ago
    That's terrific! We're hunting right now, also and this is a good reminder that sellers are motivated.
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    Absolutely and thanks for reading!
    David V. from Arlington, Virginia
    Replied 4 months ago
    I noticed you are in the Charlotte area. Do you know of any good wholesalers in the Raleigh area?
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    I cant think of them off hand.
    Amri Jane
    Replied 4 months ago
    Considering buying a 3bed 1bath in a downtown location in Western Colorado for 95k. It needs major rehab but for about 15-20k could be nice and liveable. Rent could be about $1000. Zestimate 190k. Would you buy it in this climate to flip?
    Jeremy Hayden
    Replied 4 months ago
    If it is in Grand Junction and you don't want to buy it for $95,000, I will! :)
    Nick Nyberg from Arvada, Colorado
    Replied 4 months ago
    Grand Juntion? No, they got hit hard by oil and gas, its going to take years for them to recover.
    Danny Steinweg
    Replied 4 months ago
    I live in Junction and have a service business. 30% of all my new customers have moved here from Denver or out of state and don't have anything to do with oil or gas. Its totally changed in the past few years. Right now even since COVID businesses are doing pretty good.
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    I personally wouldnt unless its enough meat on the bone to handle a price drop.
    David Pizzi
    Replied 4 months ago
    Nasar - which markets did you buy these properties? Sounds like there's a lot of buying going, with a majority being debt, not equity. Might want to think about how leveraged (over leveraged) y'all are...the easy money party cant go on forever
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    I got these on the outskirts of Charlotte.And yes its still a lot of Retail activity going on.
    Alice Lawrence Investor from Brooklyn, New York
    Replied 4 months ago
    Thanks for sharing lender!
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    Absolutely not too many lenders are lending in this climate.
    Suzette Thibodeaux Rental Property Investor from Acadiana / South Louisiana
    Replied 4 months ago
    Nasar, We are there with you. Purchased our primary residence, did our first successful BRRRR and are under contract for a rental. It's certainly important to know the areas you're buying in, as you stated. Congratulations!
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    Thats GREAT, dont let this mess slow you down!
    Jason White
    Replied 4 months ago
    @nasar Great article and congrats on the deals. I’m over here in Raleigh and would love to connect for mutually beneficial opportunities. Could use your guidance. Ping me please.
    Stephanie Toribio
    Replied 4 months ago
    Thanks for sharing! Covid 19 has affected many areas in different ways. In California, the houses aren’t lasting more than a few days before they sell. We are currently looking for a seller financing deals in the area
    Raushanah Morgan from Cordova, TN
    Replied 4 months ago
    This is so inspiring! Major congrats! I don’t want to let Covid stop me here in Memphis but I’m also unsure of my next move. I did my first flip deal last year, using a hard money lender so I understand the BRRRR method. I too am trying to find a primary residence while investing in other properties. How did you manage to get the banks to agree to refinance multiple loans for you in such a short time period? Was it because the properties were already rented out or because you used your business (and not personal) credit?
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    Hey, just to be clear the 3 props i bought in this scenario have not been refinanced. However, I have a relationship with a local bank who i can text & let him know what im looking to refinance & such. And he tells me if he can get it done in this climate. The plan is to get these refinanced once seasoning requirements are met. And a good deal is a good deal so get started.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied 4 months ago
    If you find a great deal right now, I don't think you should pass on it. I do think you should be more cautious, keep higher cash reserves and demand 5% more off or thereabout.
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    Strongly AGREE
    Tanweer Janjua from Frisco, Texas
    Replied 4 months ago
    Nasar: I am happy for you. It was encouraging to read your article. Help me understand, how do you buy 4 homes if you financed? Sorry for stupid questions here. I saved up some money and probably can only buy one home in a OK neighborhood and will be done with all my savings. I like to learn from you so feel free to lend some advice in this Covid climate. Yes, I am skeptical and not sure where to start. Thank you.
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    I financed with hard money & private money sources. these sources are always good to have relationships with.
    Bernard Herring
    Replied 4 months ago
    Sounds like you pounced on some really nice deals. Thanks for sharing your successes and good vibes.
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    You're welcome
    Malena Otero Investor from Burbank
    Replied 4 months ago
    Nasar, Congrats on your deals! Your story is motivating. My husband and I purchased two properties in Arizona. We were in the final stages of closing in the second one when COVID hit and dragged the process and made it harder to close. Keep the stories coming.
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    Will do and congrats on your purchases
    Clint Bolton Real Estate Broker from Hernando, MS
    Replied 4 months ago
    I'm definitely taking advantage of things as well. I've purchased 6 fix and flip properties within the last two months. Rehab is complete on one and just put it under contract yesterday to sell. Two of the others are 90% complete on renovations and I already have interested buyers and closing on the other 3 over the 4 weeks with two of those already having buyers that want them once renovations are completed. It's a great market here and the local job market is still strong so we're going full steam ahead!
    Nasar Elarabi Flipper/Rehabber from Charlotte, NC
    Replied 4 months ago
    Keep up the good work!
    Dana Clehouse Investor from San Antonio, TX
    Replied 4 months ago
    Thank you for sharing Nasar! Do you plan to refinance your hard money loans into conventional loans? Do you have any concerns about not being able to get the conventional loans due to the Covid tightening? I had 2 great deals last week that I was ready to jump on with hard money, but decided against it because I'm worried I won't be able to refinance out of the hard money after the rehab. As a rookie, I'd love your insight!
    Richard Damian Rental Property Investor from Houston, TX
    Replied 4 months ago
    great deal , thanks for sharing , i also bought 3 during this time , always risk involved , but part of the game , thanks again
    Teri Feeney Styers Real Estate Agent from Grand Junction, CO
    Replied 4 months ago
    @Nick Nyberg - First of all, the assessment that Grand Junction is all oil and gas is simply not true anymore and our market is thriving right now. Secondly, @Amri Jane - forget about Zestimates - they are not a good measure of value. Zillow has its attributes; but that isn't one of them. While overall the "downtown" location is super desirable, location is everything. Are you local? If not, you probably need some further input from locals.
    Jared Bigman New to Real Estate from Irvine, CA
    Replied 4 months ago
    Great story, inspiring and appreciate you laying out your recent experiences.
    Timias Woods Rental Property Investor from Los Angeles, CA
    Replied 4 months ago
    Nasar, thanks for sharing your success in closing deals during this time! It sounds like you had a short list of hard money lenders you called on. Was the company you chose someone you had completed a prior deal with? Timias
    Sammy Lyon Rental Property Investor from Los Angeles, CA
    Replied 4 months ago
    Nasar, congrats! I’ve seen hard money loans start to fund again like you said, but the long term financing is still pretty frozen unless you’re doing it with a conventional bank and W-2 income, and even then it’s tight. May I ask what is your strategy to refi out of 4 HMLs in the next few months and not get stuck in those high interest rates?
    Arturo Matamoros Property Manager from Orlando, FL
    Replied 4 months ago
    Love it! Nasar, you're inspiring many of those who have fear of investing during uncertain times. Let me know if you're ever thinking of investing in buy/hold properties in Central Florida. Wishing you the utmost success!!
    Anthony O. Porter Rental Property Investor from Atlanta, GA
    Replied 4 months ago
    This is great. Love it! Nasar, you are an inspiration. Let me know if the wholesaler has any other properties he is selling in Charlotte, NC. Blessings.
    Terrell Murray from DelMarVa
    Replied 4 months ago
    Wow 13 years of investing that's impressive, just starting but I still read the article I will keep points in mind for the future, again thanks for the post Nasar
    Dave Rav from Summerville, SC
    Replied 4 months ago
    Your wholesalers actually double check sq footage?!? They are keepers for sure. Also, you mentioned Carolina HM as lender..are you in SC or NC?
    Rachel N. from Orlando, Florida
    Replied 4 months ago
    Great article, Nasar! I grew up in the Charlotte area and would love to get into rentals there. Thanks for sharing this inspiration.
    Robert Deason from Charlotte, NC
    Replied 2 months ago
    That wholesaler is worth their weight in gold! I'm located in Denver, just outside of Charlotte, NC. I've been trying to pin down some new sources, but there are so many in the area with inflated prices and poor assessments it becomes a waste of time. I would love to connect if there is anything I can help you with as a licensed Realtor as well.