Is now a good time to start investing?

58 Replies

Hey @Jordan Murrell

It is always a good time to start investing. Your Strategies, and criteria may (should) change with the times but I don’t think there is ever a reason to sit around and wait. I do believe that the economy is going to suffer much more than people are hoping for but I also believe that there are buyers and sellers, along with good and bad deals regardless of the times. There will be a lot of people who struggle to make it through this recession and there will be a lot of people who come out the other side wealthy. Real estate investing is a hard game to play but you are on the right track by asking questions and becoming educated. Don’t wait, but be smart and have patience when looking for the right deal. 

@Jordan Murrell - As someone who is new and fairly conservative myself, I prefer to take the "wait and see" approach, as there are way too variables right now, and not a single "guru" can accurately predict the outcome of any of those variables.  I plan on watching these factors very carefully over the next few weeks/months, and will start to jump back in when the time is right.  Of course, the numbers, and the resulting financial position still have to make sense for me to move forward.

Hello Jordan,

Great question. I am currently a real estate broker, a real estate investor and working now to sponsor my first real estate syndication. Previously I worked in the financial field as a financial advisor. The most important action to take was get started now! If you don't start you will never get where you want to be. Another of the concepts that was talked about a lot in that field was the idea of dollar cost averaging. Invest as much as you can on a monthly basis over time. I believe the same concept does apply in real estate investing. Get started. Keep saving and looking for opportunities and when they arise you mover forward with the purchase. 

Real estate as you know is all about location. I do not think I could speak for what is happening in Vegas. I would expect some return to normalcy before the end of the summer. I also might expect a slight tick up in NED filings and down the road possibly a few more foreclosures in that market based on some peoples businesses not being able to survive. However I really don't think that will have a big impact on the overall numbers and because this is not likely to be drawn out too long most people will recover. Therefore I analyze your market. Talk to a good realtor. Keep looking for opportunities and see if you can find something this year. 

@Shiloh Lundahl

Thank you Shiloh. This helps a lot. I will run the numbers again. I do have a cash reserve in case of unforeseen events. Networking here on Bigger Pockets, looking to join the REIA once everything is back to normal. Thanks again

Originally posted by @Todd Nagel :

Hello Jordan,

Great question. I am currently a real estate broker, a real estate investor and working now to sponsor my first real estate syndication. Previously I worked in the financial field as a financial advisor. The most important action to take was get started now! If you don't start you will never get where you want to be. Another of the concepts that was talked about a lot in that field was the idea of dollar cost averaging. Invest as much as you can on a monthly basis over time. I believe the same concept does apply in real estate investing. Get started. Keep saving and looking for opportunities and when they arise you mover forward with the purchase. 

Real estate as you know is all about location. I do not think I could speak for what is happening in Vegas. I would expect some return to normalcy before the end of the summer. I also might expect a slight tick up in NED filings and down the road possibly a few more foreclosures in that market based on some peoples businesses not being able to survive. However I really don't think that will have a big impact on the overall numbers and because this is not likely to be drawn out too long most people will recover. Therefore I analyze your market. Talk to a good realtor. Keep looking for opportunities and see if you can find something this year. 

Todd, this helps tremendously. I am tired of waiting on the side lines, though I am waiting to analyze and wait for the deal that makes sense for me to make at this time. I am not eager enough to jump into a bad deal. I believe the first one is the hardest one. So once I find this opportunity I will capitalize. I will keep networking and pursuing my goals.

 

In the same boat and my game plan is to keep filling the pipeline, analyze deals, build relationships, make offers (buffers calculated in) with the sole purpose of building momentum so that end of this craziness finds us at full stride.

@Jordan Murrell ...as others have mentioned, alot depends on the financials of each deal you are seeing and your risk tolerance.  We are currently syndicating a MHP/Laundromat deal in South Dakota.  The numbers still work and, so far, rural areas have been significantly less impacted than NYC, New Orleans, etc.  Doesn't mean they won't get hit, but it's largely been a non-factor.  What the MSM hasn't mentioned is that there are over 1400 counties in the United States that haven't had one confirmed COVID 19 case yet (of course, that could be due to limited availability of the tests).  Anyway, if you'd like to learn how we are looking at it, how our deal is structured, etc then message me.

Regards,

Rudy 

@Jordan Murrell

It can be but unfortunately unless you have a lot of experience investing or analyzing lots of deals then it would be hard to know. I predict this recession we are going into will be worse than 2008 in many ways so if you had an idea of what kind of properties were steeply discounted coming out of then that gives a good indication. But who knows...it all depends if this thing goes on a little longer and it is very likely to for months.

I expect cities with beltways around them to take the biggest decline in many areas. Some likely around 50 percent loss. Of course if you are a long term investor and have the cash flow then it don’t matter a lot. Working class C housing like someone said earlier , is the most recession proof thing to be in, based on my experience.

One thing is certain, given this thing lasting for many months..... whatever you think is a good deal now, you will see that you didn’t know what a good deal was. Property value has already dropped drastically but that statement can’t be proven just yet because a lot of people are resistant to believe that and the discounted sales are not there yet.

This is all just my opinion and I reserve the right to change my mind. Lol.

But the next couple of years is set to be one of the best times to invest most likely for a while. Just study hard, have conversations with investors with 20 years experience, and analyze deals. Then wait until the dust starts to settle a little bit before buying (maybe 12 months) Your profit or secure position is determined with a excellent purchase in real estate more than anything.

I am definitely going to be investing. I'm closing on property this Thursday, doing a refi on one of my commercial buildings, and at the end stages of completing my portfolio commercial LOC. I think its going to be a great market for REIs in the next few months. I'm just getting all of my cash accessible so I can snatch up some amazing deals shortly! Good luck!

I was ready to move on a house in mid March. I had made an offer which was turned down and the counter offer came back a couple of weeks later, which I was set to accept. I backed out of the deal because I felt like it was an ok deal but not a great one. I am ready to buy another house in this market, but my criteria has changed considerably. Lending standards at my local bank have changed too.

Originally posted by @Jordan Murrell :

Good morning all (PST),

I am going to start by saying, I am so happy I have found Bigger Pockets and everyone in it. I have been reading through all the forums, attending webinars and listening to the podcasts. Thoroughly enjoying learning the process.

With that said, I am looking to buy my first investment property. Due to the corona virus, I am hesitant. People are dying, losing jobs and aren’t able to pay rent. I guess what I am trying to ask is that is there ever a right time? I would love to hear different opinions about the whole situation.

Thank you!

I'd say there's never a "right time" to invest; however, the "right deal" can come along at any time.

True, the current financial environment is unprecedented in most of our lifetimes. Anyone who was around for the Spanish flu outbreak of 1918 is over 100 years old.

So, when a deal comes along we need to ask different questions now than we would have before all this came up.  

One of those different questions might involve focus on the exit strategy: yes the numbers look good, but will it sell? ... will it rent? What is the market like for this deal? Lots of buyers / renters?

The only "right time" to invest is when you have a deal where the numbers work. The exit strategy will require more scrutiny and more careful thought before deciding whether to "pull the trigger".

My $0.02 ...

I believe that any time is a good time to invest as long as the property checks out and cash flows properly. At this time I believe that A LOT of investors will get scared and sell properties. A LOT of homeowners will also sell properties because they can't keep up with the bills. Specially in CA where it already is very expensive. If your financial position is in good standing and if you have reserves then you should look at investing.

Careful, y'all.  C-class properties WERE the safest asset during a typical, historical recession.  But COVID19 is different.  Now it's retail workers, restaurant and service employees that are losing their jobs.  

Many white-collar workers are still able to work from home.  And most white-collar folks have savings/reserves to help weather the storm.  So right now, in this moment, A-class properties will probably see the least amount of economic vacancy.  

But with that said, experts are saying we're at the PEAK of COVID19 here in New York.  So things will start to recover over the next 60-90 days. 

And @Sarab Mehta , I completely agree with you that right now is a great time to be making offers.  Here's a blog post about that: https://www.biggerpockets.com/member-blogs/12821/89744-why-today-is-the-best-time-in-12-years-to-make-offers

Every stage of the market has advantages and disadvantages. Prices go up but rates drop and lending practices loosen. You get more creative when finding deals. At the bottom, deals are plentiful but finding funding for them is hard. You partner or find other ways to get the money you need. There is never a "good" or "bad" time to enter the market. It's all about personal position and the ability to pivot. 

Any time you can get a good value on your dollar is a good time.  The hard part is finding the deals.  I know around here there are plenty of people looking for them, so they don't pop up often.  When they do pop up me or any of the other quick wholesalers hop on em!

Hello all,

Like Jordan, I'm very appreciative to have a community where ideas can still be shared while we are all locked in our house :). It's hard to answer the subjective question of "is it a good time to invest," but as others have stated, it all depends.

I am closing on a quadplex in Colorado Springs on the 7th, and while there was some extra difficulty in the process, it will still be done in a month from start to finish. Because of the timing of this, the interest rate that I am receiving through a major lender on an investment property is stellar. There is also a 1,000+ job creation through an Amazon warehouse to be built by 2021 in the immediate vicinity(speculative- private companies can pull out. My guess is amazon won't, but the property wasn't purchased because of this factor, just an added bonus.) This, on top of countless other reasons, make me confident that for this specific property, yes it is a great time.  


My other businesses are mobile home parks and an RV park, with a smattering of single-family homes. Collections for the mobile home parks and the SFH have been excellent for this month (96% paid in full by the 5th for mobile home sites and SFHs specifically). The RV park is suffering because it has been effectively closed to anyone that doesn't live there long term. We have access to great terms for business loans through EIDL and PPP, so on top of my cash reserves, I think weathering this storm will be manageable for that business.

I think if you can be conservative with keeping cash in excess of down payments/due diligence costs, minimize risk through astute due diligence, and hope for the best/plan for the worst there is never a bad time to start investing. I would suggest that this current state of affairs is no different. 


Hope this helps!