Realtor · Portland, ME · Member since 2015 · 655 posts · 552 votes
6y
If you find a property that fits your investment criteria then move on it now. It is impossible to predict the future and when the economy will slow down. When the economy slows down, there will be a new set of difficulties that make it hard to invest. For example, financial institutions may tighten lending standards and make it really hard to finance properties. If you find a good investment now, do it.
Realtor · Portland, ME · Member since 2015 · 655 posts · 552 votes
6y
If you find a property that fits your investment criteria then move on it now. It is impossible to predict the future and when the economy will slow down. When the economy slows down, there will be a new set of difficulties that make it hard to invest. For example, financial institutions may tighten lending standards and make it really hard to finance properties. If you find a good investment now, do it.
Lender · Chicago, IL · Member since 2016 · 653 posts · 313 votes
6y
@Kay Kay Singh this depends on your strategy and asset type. If you start doing developments or large flip projects, you could be caught in a tough spot depending on where the market goes.
For long term cash flowing rentals, just move when you find a good deal that hits your criteria.
Rental Property Investor · Los Angeles · Member since 2019 · 146 posts · 101 votes
6y
Like said above you find the right deal now move on it.
I think right now is just time to be that much more conservative. Give yourself more buffer, higher vacancy and extra reserves in case you need carry property for sometime. Maybe try to avoid big rehab projects. For example a multi-family deal I'm about close its more expense reduction management play. The property needs very minimal work.
A lot people are scared on the sidelines. If you take a chance now those brokers will remember and bring more deals later. I honestly thinks its really good time to jump in on the deal. Happy Hunting!
Rental Property Investor · Redondo Beach, CA · Member since 2017 · 411 posts · 477 votes
6y
@Kay Kay Singh it is a tough question to answer, right? Has there ever been so much anticipated uncertainty before? Playing devil's advocate to the previous comments, how do we really underwrite right now with the eviction moratorium being extended, and unemployment being cut. That is not a great recipe. You tack on it being an election year to the pandemic craziness, and I proceed with caution.
Pricing has not responded to this recession, because the FED has kept renters afloat. Owner/sellers are saying, hey my T3 looks pretty. Here is my NOI and here is the stabilized market cap, so if you're not going to pay xyz/door, the next buyer will. What is October through February going to look like?
Having said that, if you can get good value while still stress-testing at 70%, 0 rent growth for a couple of years, and an escalating reversion cap, submit that LOI. I know you are anyway, but it is a good question at this point in time. Not a bad idea to have some cash waiting for 2021 IMO.
Real Estate Broker · Kansas City · Member since 2019 · 86 posts · 43 votes
6y
@Kay Kay Singh If you find a deal that fits your investment criteria/return profile, and you can meet lender requirements (conservative due to COVID) then the time is now. A few reasons;
lock in low interest rates (sub 4%)
inflation hedge (QE!)
avoid potential tax revisions (increased cap gains tax) under new leadership
equity market uncertainty
If the market tanks and you're holding a great, conservatively financed property you should be OK. Your future self also now has a track record and can take advantage of the distressed assets coming to market.
With that being said - I would avoid taking on heavy repositions/flips (as mentioned) and wouldn't be surprised by increased taxes (you can u/w a fudge factor).
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
6y
Always be ready to do deals, But only do great deals.
The average deal right now, I don't think is worth doing at all. But if you can find a great deal it is still worth doing. The better the deal the lower your risk.
Rental Property Investor · Melbourne, FL · Member since 2017 · 114 posts · 108 votes
6y
@Kay Kay Singh Both. Having cash to sit on allows great companies and experienced investors to weather the storm. However, to cease seeking investment opportunities puts you out of your rhythm. You cannot perfectly time the market, so to continue actively looking for deals that meet your criteria, while maintaining solid cash positions, is what I believe to be the ideal approach to this situation. I hope this helps!
Rental Property Investor · Fort Wayne, IN · Member since 2016 · 258 posts · 177 votes
6y
Thanks, everyone for the great insight, I really appreciate your insight. Actually we are closing on a 150 unit property next week in the Galleria area of Houston, TX.