The next 6 to 12 months??

Question

Hi Guys,

I have done 4 flips the last 3 years the last one was bad. The contractor was a sob to say the least but lesson learned.

I been thinking if I should buy another flip or are people waiting for the next 6 months before the stock market crashes? I mean the feds been injecting money into it and also the 40 million that are without jobs will soon have to pay their mortgages and probably won’t be able too.

What are you thoughts ??

Jay Hinrichs · Answer

my thought is years 08 to 2012  should not be counted towards this latest run..  I believe those were stabilization years and there were still massive loss's through those 4 years as the distressed assets worked through the system.. to me we are at year 8..  And now Covid.. no way to tie that to normal economic cycles..

Karl B. · Answer

I'm looking back at the deals I bought that exceeded the 2% rule and they were around 2017 when I got into multi-family. There were still good deals to be found in 2018 in my original market and I did see some nice ones in 2019 across the country when I was doing a lot of research as to where to move as Los Angeles traffic and high taxes finally got on my nerves (and my L.A. house is worth way more than it should be so I want to cash out).

Current-day, the multi-family market in my original market isn't looking good (inventory is low and properties are either overpriced garbage or are simply overpriced).

There are some 1% rule properties in my Missouri market but that doesn't excite me. If I come across a good deal then great, but until then I'm going to wait and stack cash. I'm not going to overpay.

For those who buy SFH I would keep looking. You're going to have a better chance of scoring something good than a MF investor as MF prices are in the insane territory, especially for commercial.

Euna Jee · Answer

@Tony Sepassi With the effect of QE(quantitative easing ), It will kick inflation to a very high level. Saving $, if putting your $ in the bank = losing $, and real estate investing tends to yield relatively well during recession, especially segment & target specific area/types of real estate imo.

I think if you find “good deal” still should stick to your plan, and continue investing in real estate!In Los Angeles area where commercial properties in prime location hardly ever come out in the market, if landlord is downsizing and trying to minimize losses form Covid, It can be an opportunity. Isn’t it?

Tony Sepassi · Answer

I been stuck if I should but rentals now and stop flipping but like you guys mentioned we don’t know if the tenants will pay their rents so that’s the risk with rental properties.  Now if I go buy another property to flip , first I need to find a very good deal and I haven’t seen any lately.

So the old saying goes “cash is king” until we get out of this uncharted waters

Jason M. · Answer

Crash or not, the market historically trends upwards over time. Even if it does crash, dollar cost averaging should level out the investment over time making it a fairly safe bet if you don't need your money anytime soon.

What scares me about the rental market right now is tenants that can't pay, laws preventing evictions, and the uncertainty around how long this will last. If we burn through our vacancy allowance, and our reserves, then what? Forbearance?

Ujwal Velagapudi · Answer

To echo the voices above, I do have concerns with the current market with the government imposed restrictions as well as the market being way overpriced. I don't believe a good buy to be anything where the "numbers work", I want to purchase at below market value and to have solid cushion in my cashflow. I do not think there are many good investments out there right now, too much government uncertainty, very volatile job market, etc. Getting a job done in the RE world will also be more difficult depending on where you are, if lockdown restrictions increase again, with so many moving parts in contractors, city office permits, inspections, tenants, etc. I'll be waiting for at least a couple of the many variables that are volatile to settle before jumping in, I think that's more of an important factor in when I plan to start investing again.

I'm thinking Q1 2021 as well, but who knows, the last 6 months have been some of the craziest we've seen in decades.

Jason M. · Answer

I have less fears about the market crashing and more fears about rent holds, eviction pauses, and other tenant legal issues during COVID. I have decided to wait until at least Q1 2021.

Rocco Swinney · Answer

My thought is the market is overpriced, which starting about 4 years ago i thought that. Yet - it just keeps going up. I buy investment properties (which i have been even in the last 4 years) and blue chip dividends (i havent for a long time now). Ive missed out on some great opportunities in the market.

Also, it seems crashes tend to be every 8 years or so. We are on about year 12 now. Some may say we recently had one, which recovered in about a month. Thats not really a crash in my view. But who knows. Whats your thoughts?

Tony Sepassi · Answer

https://www.youtube.com/watch?...This morning I opened YouTube and I saw this on my feed.  This video is very informative and he’s saying exactly what we are thinking.

The next 6 to 12 months??

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