Corona Virus Cases are getting worst! should I buy now or wait?
Member since 2018 · 73 posts · 13 votes
Corona Virus Cases are getting worst! should I buy now or wait?
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Attorney · Wilsonville, OR · Member since 2017 · 504 posts · 411 votes
6y@Anne Williams go about ur ordinary business and crunch ur numbers.
Just to put into perspective, Swine Flue, remember that? let me give you some statistics. “How many of you even remember the swine flu 2009, 2010? I don’t remember it. I don’t remember a thing about the swine flu. I went back and looked at the stats and I was stunned. Are you ready for this? The swine flu outbreak in this country in 2009 and 2010, 60 million Americans were infected. Do you remember that? Sixty million were infected. Dr. Siegel.
Do you know how many people were hospitalized in 2009-2010 with the swine flu? Three hundred thousand were hospitalized. So 60 million people infected, 300,000 hospitalized.
Sixty million Americans infected, 300,000 hospitalized. The numbers with the coronavirus are not even close. They are barely a fraction of a percentage compared to the swine flu.
There wasn’t any media panic. No political weaponizing. We went through a much worse situation with the Swine flue. And then we also had Ebola. And that’s just 10 years ago, 300,000 hospitalized. So we overcame it. We overcame Ebola. This is gonna end, it’s gonna pass.
we’re gonna rebound from this, and when we do, you had better get ready and hold on tight, because this market’s gonna rebound. The people who are selling right now and getting out of it are panicking, and they don’t want to be selling. Everybody’s doing this from a very defensive posture and point of view. this market is gonna rebound like you can’t believe because the people who have been selling off want to get back in it. And we are taking economic procedures right now that are going to serve to further reignite the economy when all this passes.
don’t forget, ’cause I’m sure everybody has, swine flu outbreak 2009, 2010, right here, United States of America, 60 million Americans infected. you have to visualize this, 300,000 hospitalized. We’re nowhere near 300,000 hospitalized with coronavirus. I mean, we’re not even close to it. In fact, worldwide we don’t even have 300,000 cases, worldwide, of the coronavirus. Three hundred thousand hospitalized in the United States alone. You don’t even remember it.
February 12th, 2010, archives, Reuters news: “Swine Flu Has Killed Up to 17,000 in U.S.” February 12th, 2010: “H1N1 Swine Flu Has Killed as Much as 17,000 Americans Including 1,800 Children – The U.S. Centers for Disease Control and Prevention reported on Friday the swine flu pandemic put as many people in the hospital as during the normal influenza season, but most were younger adults and children instead of the elderly.” And it was during the months when usually very little or no flu is circulating, the CDC said. “The CDC estimates that between 41 million and 84 million cases of the 2009 swine flu occurred between April 2009 and January 16th, 2010.” So it’s maybe more than 60 million, 84 million cases of swine flu.
So the swine flu got the young, 84 million cases, 1,800 children dead, 300,000 total infected, 13,000 adults. That’s a February 12th, 2010, archives at Reuters. Seventeen thousand Americans dead. We don’t have 17,000 people dead worldwide from the coronavirus, folks. And you know what the recovery rate for the coronavirus is, according to the Johns Hopkins University website?
Johns Hopkins University website shows that the recovery rate is — Sixty-five percent.
“Can anybody tell me the number of coronavirus deaths in the United States?” (interruption) You looked it up, did you? You had to look it up because you didn’t know off the top of your head.
The one thing missing in all of this panic-driven coronavirus news is what? The number of deaths in the United States!”
About 60% of the death toll has happened in one place, and I don’t mean one city. I mean in one place in one city. Thirty-nine 39. Do you know that 26 of those 39 deaths have occurred in a nursing home in Seattle, Washington state? You take the 26 deaths out of the equation from the nursing home in Washington state and how many deaths are we talking about? 13! And yet we are reacting this way? We’re wrecking the United States economy! Yet go back. The swine flu: 18,000 people dead, 60 million infected, 300,000 hospitalized in 2009-2010.
55 Replies
- 6yTheresa HarrisPro MemberMember since 2019 · 15k+ posts · 11k+ votes
Originally posted by @Karen O.:
@Brian Bradley I was surprised to learn those numbers too. I wonder if the hysteria didn't take hold because we were in the middle of the great recession which caused its on hysteria. The first cases were reported in the late Mar/early Apr when over 4m jobs went poof.
The media loves to sensationalize things as they want to sell their stories. We see it all the time. You hear about localized flooding and see a reporter standing on a corner surrounded by water...if the camera zoomed out (or you lived in the area and knew), you'd probably see the only spot in town that is like that. Take what they saw with a grain of salt and research the facts from reputable sources (not the media or social media).
@Anne Williams
That question has been asked millions of times. It’s always a good time to buy real estate as long as you buy it right. Keep emotions out of it and buy based on the numbers only.
Rod Hanks Insurance4.9158 Reviews- Member since 2019 · 36 posts · 23 votes6y
@David Wilk the fact that there is a vaccine for TB, Hep B, Whooping cough, etc makes the daily death rate even more alarming. Can you imaging what the numbers would be if there were no vaccines for those diseases?
Since this is such in charted territory going back to first principles: supply/demand and leave the debates about how does this compare to Swine Flu or the normal flu to the virologists and the 24 hour news cycle.
Supply: Foreclosures on either the rental or O/O side due to job interruptions. This will vary with tenant class, but generally speaking I think the most at risk segment is the super levered cash flow is king rental crowd who have scaled fast to try and pile up the $200/door. If they don't have lots of reserves, they may try and dump properties if they can't pay the bills. I think the O/O crowd is a bit let sensitive to this, since time it will take for foreclosures to run its course may take longer than the worst of the impact takes. The way supply increases, over and above in progress units that come online, is people not being able to pay their mortgages. What causes that? Interruptions to wages. Who are most likely to have those? Service industry worker, people's who jobs can't be done remote, ect.
On a morbid note, since COVID -19 does have a dramatically higher mortality rate for those 60+, that could also lead to an increase in supply from the O/O in the short run.
A confounding factor could be refi's, which could shave .25-.75 basis points off a mortgage. That can save a hundred or so bucks a month and save some investors who may are on the bubble. That assumes they have swing the refi fees.
Demand: This is the hard one, because people need places to live so I think you'll see some movement down the value chain. If I can't afford my mortgage I'll have to rent. If I can't afford my rent, I move into a smaller unit. On the other side of the coin, with low rates, some people could take this as an opportunity to get into the market if supply does increase. The demand will change less rapidly in the short run of this crisis. At most it will shift down market.What really matters is the proportion of each supply and demand factor since each sub markets will have different proportions. Indianapolis or Kansas City's C class turnkey space, will probably have more volatility, and thus opportunity, than say Seattle or NYC.
Things to remember: 1. depending on time to spread, this virus will run its course in 30-60ish days in the worsts case. Foreclosures take a lot longer than that and so do tax sales. This won't be a copy paste of 2008. 2. For most folks on BP investing is dependent on access to credit, if you can't get a loan, all the above is simply theoretical musings. 3. If you have a rental you need to pay your bills. A bird in the hand is worth two in the bush. Getting a portion of your rent from a tenant who is having hard time is better than $0 and the carry costs and the turnover costs. Kicking folks out who can't make their rent due to temp employment concerns is another way to end up depleting your reserves and having no choice but to sell.
- Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes6y
I'm definitely keeping an eye out for panicked sellers and lenders on standby; it may not be a great time to buy or sell for everyone, but it's certainly a time for everyone to have their eyes open and looking.
- Contractor · San Diego, CA · Member since 2018 · 432 posts · 221 votes6y
@Anne Williams it’s a good time to low ball offer. Some sellers will sell at the first offer that comes their way. This is the biggest bull crap drop I’ve ever seen!
Originally posted by @Dorys Prentice:
@David Wilk the fact that there is a vaccine for TB, Hep B, Whooping cough, etc makes the daily death rate even more alarming. Can you imaging what the numbers would be if there were no vaccines for those diseases?
I was a young kid in an Infectious Disease hospital with the mumps, surrounded by those my age with Polio. Now that was frightening.
- Riverside, CA · Member since 2017 · 412 posts · 296 votes6y
Originally posted by @Anne Williams:
Hello BP,
SO as I am searching for property, I am wondering how this will affect prices, and the overall state of real estate.
Should I move forward and purchase or hold off for potentially better deals?
The "alarm" is not necessary. It is sad that 36 people in the US have died from Covid-19.
However, "About 2.9 million Chinese visitors entered the United States in 2018, according to the National Trade and Tourism Office"
That means about 241,700 Chinese visitors a month. It took two months to realize there was a problem which means about 485,000 Chinese visitors, not to mention the traveling American public, to enter through the ports of L.A., San Francisco, Portland, Seattle etc and we have fewer people dead than a bad weekend in Baltimore violence.
By comparison, there were 36,560 automobile deaths in 2018 and that works out to 6,093 in the same period of time.
36 - Covid-19 deaths (65% of which were a single facility in Kirkland, WA)6,093 - Car crash deaths same period of time
3,536 - There are an average of 3,536 fatal unintentional drownings (non-boating related) annually in the United States Originally posted by @Jay Hinrichs:
Originally posted by @Jim K.:
I think the big deals are coming and we're all going to party like it's 2011 again soon.
on a contrarian view point maybe there is a flight to real estate and price hold and go up.. I had two hedge funds go into contract on a few of our assets at full price close in 10 days.. had a fixer in Portland that we got 7 offers on with 4 over ask. all in the last 5 days.
also its not like turning a faucet on or off.. especially in Mortgage states were foreclosures are measured in years as opposed to months like Deed of trust states or deeds to secure debt ( GA) which can go through the system in a matter of 3 to 4 months.
so it will really depend on jobs and how rentals perform.. the max leverage I got to own 50 doors with no real equity and minuscule cash flow per door per month.. those folks could be in for a rough ride if they have some vacancy issues and are not properly capitalized.
We could see that In MF also since most buy those units and max leverage to juice paper returns it does not take a staggering vacancy rate to spell trouble for some of those properties.
Its going to be interesting.. Cant recall his name but there is a gentlemen on BP who has talked about buying all these hotels the last year.. thats a space that could see some turmoil and turnover.
Jay, you're absolutely right. What I see is very narrow. In my sector of low C-class urban SFR, I would be willing to bet we're going to experience long-overdue culling of the herd of uncommitted passive-investment-dreaming landlords who are completely unprepared to run their heavily leveraged empires relying on multiple third-party associates in a time of national crisis. LLs with minimal reserves, anyone trying to live the high life off their tenants, anyone with undiversified savings is at risk. The risk you mentioned is real throughout the rest of real estate, but I would be willing to bet that few people are going to fly to low-C class urban SFR in the Rust Belt to protect their assets. One more obvious example of my microfocus and your macro lens on this business.
For those who have done the wise things in my space, who built carefully knowing the day would come when the wolf came to the door, when the crisis passes I think we're going to be looking at incredible opportunities. That's what I meant. But perhaps not so much for everyone else. The value of real estate as a diversified investment hedge and bulwark against financial crisis and panic is very clearly being loudly reasserted throughout the world right now.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes6y
Just keep in mind that real estate prices will lag other economic trouble. Stock market has emotional reactions that run up or down day to day. Real estate prices drop based on supply and demand. Regardless of the people claiming "fake news" on the virus, all of the business closures across the US will have REAL financial impact. Theme parks, sporting events, concerts, restaurants, airlines, retail are all going to take major financial hits. That will lead to layoffs. People without income have trouble paying mortgages. They have trouble paying rent. They move in with family. They move to different cities. This reduces housing demand and prices drop. This takes time to play out, so to answer the question - I am waiting.
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Jim K.:
Originally posted by @Jay Hinrichs:
Originally posted by @Jim K.:
I think the big deals are coming and we're all going to party like it's 2011 again soon.
on a contrarian view point maybe there is a flight to real estate and price hold and go up.. I had two hedge funds go into contract on a few of our assets at full price close in 10 days.. had a fixer in Portland that we got 7 offers on with 4 over ask. all in the last 5 days.
also its not like turning a faucet on or off.. especially in Mortgage states were foreclosures are measured in years as opposed to months like Deed of trust states or deeds to secure debt ( GA) which can go through the system in a matter of 3 to 4 months.
so it will really depend on jobs and how rentals perform.. the max leverage I got to own 50 doors with no real equity and minuscule cash flow per door per month.. those folks could be in for a rough ride if they have some vacancy issues and are not properly capitalized.
We could see that In MF also since most buy those units and max leverage to juice paper returns it does not take a staggering vacancy rate to spell trouble for some of those properties.
Its going to be interesting.. Cant recall his name but there is a gentlemen on BP who has talked about buying all these hotels the last year.. thats a space that could see some turmoil and turnover.
Jay, you're absolutely right. What I see is very narrow. In my sector of low C-class urban SFR, I would be willing to bet we're going to experience long-overdue culling of the herd of uncommitted passive-investment-dreaming landlords who are completely unprepared to run their heavily leveraged empires relying on multiple third-party associates in a time of national crisis. LLs with minimal reserves, anyone trying to live the high life off their tenants, anyone with undiversified savings is at risk. The risk you mentioned is real throughout the rest of real estate, but I would be willing to bet that few people are going to fly to low-C class urban SFR in the Rust Belt to protect their assets. One more obvious example of my microfocus and your macro lens on this business.
For those who have done the wise things in my space, who built carefully knowing the day would come when the wolf came to the door, when the crisis passes I think we're going to be looking at incredible opportunities. That's what I meant. But perhaps not so much for everyone else. The value of real estate as a diversified investment hedge and bulwark against financial crisis and panic is very clearly being loudly reasserted throughout the world right now.
many people around the world have different ideas of safety of their investments.. You look at the Pacific Rim investors buying west coast real estate in the TOP markets ( LA, Silicon Valley, SF , Seattle and Vancouver BC) and never renting it.. Just a safe place to plop cash.. and most of those purchases are 1 mil or more. Bottom line Investors buy for all different reasons. Of course the vast majority on this site have one focus and that is buying a property that throws off cash flow with max leverage. And could care less if the property ever went up in value as that is not their focus..
So if you have values go low because of this upset in the world their assets have just devalued along with everyone else's .. Of course they only realize the loss when they sell in a trough.
Interesting times thats for sure and it came on us so Quickly.. wow.. it was just two weeks ago were i made a post would you work with a tenant who lost wages becasue of this outbreak and you know I got shouted off the thread with the NO way Jose.. no pay take a hike not my problem landlords.. now you see them commenting well we will rethink this and some saying they would work with folks.. ( at least your good tenants you dont want to lose).. Here in Vegas this is going to be a reality very quickly with virtually every venue shutting down their entertainment etc.. It will be interesting to see how the corps handle this.. But for sure some are going to get furloughed and will have income interruptions.. Its already on the local news here.. IE interviewing wait staff etc that does not know how they are even going to buy food much less pay rent.
- Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes6y
If you buy a house at say 75% of ARV - repairs (if that's what you follow), if prices drop 10%, do you suddenly have a 'bad' deal.
Not really. You'll still be able to hold or dump and be okay.
Watching and waiting isn't a bad thing if you're seeing how it plays out.
If you're watching and waiting trying to time the market, that's a waste of time.
- Stop posting those BS graphs on total COVID deaths..... the other agents on the list infect 10's of millions of people a year worldwide...... take the current mortality rate of COVID and multiple it by 10's of millions..... The rate of transmission is different and the mortality rate is different.... STOP comparing total death #'s..... let the experts at the CDC and WHO set the level for the concern we should have....not some dumb as graph off the internet.... jesus....
- Phoenix, AZ · Member since 2014 · 5 posts · 0 votes6y
I go into this at length here. In terms of "buying now" it depends on what you're looking to do. If you want to do a quick flip, then maybe the risk is a bit high right now. But if you want a place to hold that has good cashflows, then yes you can likely get a better than average deal since I'm seeing less buyers wanting to tour places.
- Investor · Houston, TX · Member since 2016 · 16 posts · 19 votes6y
Just listen to investors like Warren Buffet,
'Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years'
As experienced real estate investors, we are always buyers for quality long term product, where the demand is there, and we buy at distressed price / terms which favor us for the long term. We do NOT speculate, we invest, and we “structure and buy based upon worst case” and NOT best case speculation. We are buying now, and we enjoy helping others “buy right” Investors make money when we buy. Feel free to contact us, we speak all over the country for free, which brings us deals, private lenders and JV investors.
- Rental Property Investor · Twin Cities, MN · Member since 2019 · 122 posts · 150 votes6y
@Anne Williams
There are still deals to be had. The housing market will hold out the longest.
- Rental Property Investor · Augusta, GA · Member since 2019 · 129 posts · 112 votes6y
If the numbers work, buy. There's always going to be a reason (excuse) not to buy right now. I have a house under contract right now and if the real estate market sees a dip, I'm sure I'll have more. But don't let something prevent you from buying now.
@Ned J. The problem with what you say is that at this point we really don’t know what the mortality rate is without widespread testing. As has been discussed in other places, we know the numerator but not the denominator because of very limited testing, so we have no reliable mortality rate here. South Korea has done the most widespread and inclusive testing and reports a .77% mortality rate, vs the 2.0-3.4% rates reported in countries with less comprehensive figures. Still much higher than the common flu but not as high as many places like to report. We won’t k ow the real situation until we get further into this.
- Professional · Parsippany, NJ · Member since 2013 · 384 posts · 262 votes6y
Are you searching for Fix & Flip or Buy & HOld
- Member since 2019 · 67 posts · 34 votes6y
It's like saying stroke and heart related diseases causes 10x death annually than car accidents. Let's all not wearing seat belt today!
- Riverside, CA · Member since 2017 · 412 posts · 296 votes6y
Originally posted by @David Wilk:
@Pat L. - Yes, however, there is a vaccine for TB, Hep B, Whooping cough etc. First world countries don't worry about Maralria, Rotovirus.
We are only a few weeks into COVID19 and it's affecting everyone (so it seems, I'm no expert!). I think that is why the distress.
I'm like you, however - not too worried at all!
Flights to Hawaii are $200 right now.. might just go take an extended vacation and wait!
Your Comment: "there is a vaccine for TB"
You underestimate today's super tuberculosis.
"Multidrug-Resistant Tuberculosis (MDR TB)
What is tuberculosis (TB)?Tuberculosis (TB) is a disease caused by bacteria that are spread from person to person through the air. TB usually affects the lungs, but it can also affect other parts of the body, such as the brain, the kidneys, or the spine.
What is multidrug-resistant tuberculosis (MDR TB)?Multidrug-resistant TB (MDR TB) is caused by an organism that is resistant to at least isoniazid and rifampin, the two most potent TB drugs. These drugs are used to treat all persons with TB disease."
It is showing up in migrants coming across the Mexican border.
Meanwhile up North we have this & it's a Nobel Prize contender if successful. BUT it will be free to Canadians but big Pharma here will charge for it like they do for insulin, yet another CDN discovery, (Dr. F Banting another great pioneer)
- Investor · Port Townsend, WA · Member since 2014 · 103 posts · 50 votes6y
I understand that the death rate is largely dependent on how many Ventilators each nation has. S. Korea as of today has 8,162 confirmed cases with 75 dead. That country experienced MERS epidemic in 2015 where they lost 36 people, a small number but it scared the whole country, and they beefed up Ventilator preparedness which is paying off. On the other hand, see Italy and Spain, the death rate & the speed with which is increasing is jaw dropping. I also don't think we have ever experienced the the whole EU shutting down in our memory which is a bigger psychological hit.
At least NY State has a guideline on how to allocate the ventilators in case of shortages, Italian doctors are on their own making decision on who to treat.
https://www.health.ny.gov/regulations/task_force/reports_publications/docs/ventilator_guidelines.pdf
State of WA already closed all the schools for 6 weeks starting Tue Mar 17 (I am sure other states will follow), which means some of our tenants won't be able to go to work if they have small kids at home...I am worried about paying mortgages for my rentals because this won't end at least for 2 months, and up to 4-5 months. S.Korea's infection rate started ticking up only in late Feb and they are still going strong. Many many small businesses there are going out of business.I am told by my relatives who live 1.5 hr car ride away from epicenter in S. Korea (over 5,000 confirmed cases in one city of Deagu), for healthy people under 70's, it passes like cold so most of us can go about our day. The elderly who are not mobile (diminished lung condition) or any other health conditions (high blood pressure, diabetes, immune compromising conditions such as past cancer treatment) could increase the risk. I have about 100 extended family members living in Southern part of S. Korea, none of them church goers. So far, none of them infected (or if they were infected, they shrugged it off and went to work).
Italian number of 21,157 confirmed cases with 1,441 death rate in 2 weeks is what's scaring everyone, and other neighboring countries following the same path...
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