When will it be a good time to buy post Covid-19?

Question

I was thinking of doing a cash out refi on my home and taken a pension loan out just to grab some extra cash to have ready for post Covid-19 housing market drop, if any...

Do you think now is a good time to do all this or should i wait... i feel that maybe i should do it and have all the cash ready just in case something good comes up... whats everyone's thoughts?

Michael Ohara · Answer

I know investors who are hanging onto their cash, and others who are aggressively pursuing deals.  Of course, no one can 100% accurately predict the market, but it might be a good idea to have your funds ready to go as long as you can handle the payments while waiting for the deal.  All the best.

Evan Polaski · Answer

@Anthony Liguori, I agree with @Kenneth Garrett but want to add one piece.  2008 was the start of the last recession, and the market didn't bottom out until 2010/11.  And as noted, there were no mandated eviction and foreclosure moratoriums, as there are this time.  Starting today, 3 month moratorium, then a few more months of short payments, then a workout plan, before the true first missed payment.  From missed payment to house available to buy as investor, you are likely looking at 12+ months.  In this case, I would imagine we have 18+ months before you will really start seeing good deals coming to market.

Vic Iyer · Answer

Not seeing any slow downs in South Florida. On the contrary inventory is tight and homes are moving fast.

Jónas Tryggvi Stefánsson · Answer

The correct time is when you find the deal.

Don't try to time the market precisely, you will probably fail if you try to pinpoint a certain low or high.

Simply be aware of the time frame in the cycle and start looking for the deals. You may or may not find them. Start looking 😀

You might want to have the cash ready but perhaps its simply enough to start the refi process once you're under contract but that depends on your lender and your contract tike frame.

Get pre qualified if possible and at the very least know the time frame your lender requires for a refi. If you are certain you'll be buying something soon and you'll need the money fast then by all means start the refi process.

Vic Iyer · Answer

Well, Banks have started tightening the belts on loans/Refi. The post COVID appraisals will be very conservative and shocking. The bank might insist on 40% equity.

Of course, CASH would be the king

Sam Josh · Answer

@Michael Ohara

Would help if you took of what areas you are looking to invest in. Covid won’t have the same impact every where and not every place will have the same capacity to come back strong. RE is hyper local at the end of the day.

Kenneth Garrett · Answer

@Anthony Liguori

I believe COVID-19 will create an influx of short sales and foreclosures in the coming months on investment properties.  Tenants don’t pay rent and the investor doesn’t have an emergency fund to get through this.  You may see some investors unload some properties.  I don’t think you will see 2008-2012 prices, but there will be opportunities.  There are similar characteristics of this event as 2008, except the government has done a bailout for individuals this time.  Back then there was a stop to banks on foreclosures for a while.  There was not a no eviction rule.  Be ready for the opportunity.

Scott Passman · Answer

I agree with @Michael Ohara.  You want to make you get your cash and credit lines available now while you still can so when an opportunity presents itself you are ready to make an offer right away.  There is no guarantee you will have access to those funds later so secure them now and be ready.

When will it be a good time to buy post Covid-19?

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