Is the Pandemic affecting your business? No trolls please
Seeing a difference in buyers/sellers/tenants?
Colleagues are posting signs and we are sanitizing.
@Heather Olson I had a deal I was working on for 5 months fall apart as my buyer was spooked about a recession. I was able to find a new buyer within 24 hours though and actually got an extra $2,000. I think there will be lots of impacts and you will need to push through it, but it's not the end of the world and there will be many opportunities.
I had quite a few LTR's and STR's in Naples, Bonita Springs FL area, and I can say from past experience, when it hit, it hit hard. I had to cut some of my tenants rent in 1/2 just to keep them from moving back in with their 90 year old parents in the area. I did whatever it took to stay above water. My SFL properties killed me, my Jacksonville properties stayed steady. From my personal experience, it's totally market dependent on what has to be done. Southwest FL was driven by snowbirds and restaurants. When that dried up, everything went south. North East florida had more business to sustain the residents. I do wish I had a ton of cash sitting around in 2008-10 to deploy down there, but at the time I didn't. I was way over-leveraged in that market. Lesson learned for me - divest.
I just started picking up some STR's in TN and SC, but okay with carrying those for awhile at break even if I need.
I thought about getting into commercial this year, but one big concern of mine is the statement from Carl Icahn this week. He said his biggest holding right now was a short position in CMBS. That's scary to me to think that a famed investor/billionaire is betting that their will be a major collapse in the commercial mortgage backed securities market.
Just my opinion, as we all have them, I’m keeping some cash handy for opportunities that pop up over the next 4-8 months. I think for the patient folks, there will be plenty to pick from.
I'm in Indianapolis and have background in rehab, flipping, rental investing, BRRRR, & new build construction. Also I've invested in the past and am a licensed broker. What I say here should not be construed as broker advice. Just an experienced investor in Indianapolis. My opinion: I would take a pause. I wouldn't purchase, sign a contract, start a rehab, enter into a new construction or new build agreement, or get a hard money loan HML right now in Indy. I would do additional due diligence on general contractors or vendors, property purchases, etc. Just makes sense to me to take a pause. Just my opinion, but many in Indy arent even leaving the house, let alone providing services. Do what you choose, I would just be careful. I wouldn't put down a chunk of money for anything. That is just my opinion as an individual watching this market and talking with local participants. Only opinion. We cannot predict where this will go.
I'm not at all shocked about possible distress for commercial. Commercial SF, rental, whatever - a lot of these "big time" investors are leveraged to the hilt. Many successful people arent going to come out publicly and say they've made huge mistakes in the last few years. I know some big time operations, service providers, and strictly investors that have bitten off waaay more than they can chew in the last several years. Egos are large to be successful in our industry, conversley, egos can be very slow to admit shortcomings and mistakes. Prudent strategy would say to be cautious in my opinion.
@Richard Bonisa Could not agree more. Here is one article on Icahn's bet. He had started shorting CMBS tied to malls in late 2019, and has upped his bet on commercial going bust
@Julie McCoy yeah I’ve heard str beginning to slow, where are yours
@Jay Hinrichs I think govt will help with immediate un-employment plus the some companies are still paying https://www.google.com/amp/s/mobile.reuters.com/article/amp/idUSW1N29L03G
No cancellations at our Florida Airbnb yet. The beaches are doing great. They can’t close the beach. We did get a refund on an Airbnb we were renting for the Masters golf that was cancelled. I’m not going to loose any good tenants over a short term problem. I’m planning to put the good ones on a payment plan to catch up if needed.
Does anyone have answers for example: a rehab or a PM going on site and contracting this disease? Would there be liability for property owner? Project management companies, general contractors, city inspectors, or any service provider? Many of the working types who perform the basic tasks - these types dont have health care insurance. Now, this is just my opinion, so I dont know. I've certainly talked with some "workers" and "owners" who can talk in a very letigious way. Like I said, just an opinion. I talked with a PM yesterday who also plays the lead on rehabs and there were concerns. How is this thought process affecting others? If a GC had crews that contracted the virus and then had to quarantine, what would happen on the rehab?
@Richard Bonisa How can one prove that the virus came from being on a job site when the incubation period is between 2 and 14 days?
Oh you cant prove that. No way, but the work can stop as the clock continues to tick. That was my main concern for all of us.
Our retail landlords are not just going to give in to requests for rent reduction immediately. For good Tenants who have always paid on time and in any other situation would continue to be great additions to the shopping center, they are first going to direct them to the SBA office. Additionally some insurance policies have lost income provisions and given that the government here in WA has mandated closures for lots of different use categories, they may be covered under those provisions. If all else fails, most of our Landlords (those who can , anyways) are willing to consider rent abatement but will be requiring full proof of loss including P&L's year over year, current YTD and MTD cash flow, bank statements showing reserves, etc. They will also want to know what they Tenant has been doing to bring in business. If the Tenant isn't taking proactive measures and just want to hit the easy button, then no way.
@Tom S. we also rent to college students. They haven't been around so I am assuming school is closed for them. It's a perfect time for us to pressure wash and get yard work done without disturbing them. (They rent the other side of our duplex)
@Mark Pace I thought they were trying to close beaches. My wife said they were closing beaches in Miami. We’re supposed to be in Ft Myers in 2-3 weeks and not sure if we’re going to be going.
I'm in Indianapolis and we've been devastated by this. People I've talked to have ground everything to a halt. Some of the hot communities are restricting business and travel. This is serious business. There were rehabs, property purchases in progress, even down to things like investors investing capital into hard money lending companies, who might struggle to get a return, or even investments back. We have serious situations on the table here. Can your PM collect rent? Do you want to get a loan? Are their people working? What about subs or General Contractors? Can it all be depended upon? If your rehab is active, even a new build, or just an interior paint job - what is going on? Is your investment moving forward, sitting still? Can your HML or conventional lender collect, take property back? Will you be made whole? Will your renter use stimulus $ to pay you?
These are the questions that currently have no answers.
My opinion, in the current situation, how can you make your vendor, contracted service people, or workers - do what you need? Should you?
What are other markets doing? What is going on out there? I would like to know.
A lot of unanswered scenarios now.
What is everyone doing? What are expectations? Is anyone moving forward. I'd like to know!!!
@James York Beaches are now starting to close in Florida. If you are planning a trip check with your hotel or airbnb provider for more information.
Majority of my tenants are active military and therefore pose very little risk of lost rent income.
On that note, this could be a great opportunity for buy-and-hold investors to capitalize on low rates and panic sales to acquire residential properties in military towns.
Many of these markets are also augmented by college student populations, which will return to normal in the fall or next spring and bolster rental demand to its previous levels.
But for now, military tenants are providing a sense of stability that is unfortunately not going to be the norm for many investors in the coming months.
Anything purchased will likely be a hold with no tenant for some time. Watch this stuff take place and transpire. In Indianapolis, people who rent are generally in a certain income bracket. Like I said above, let's just pause, do what we can do for damage control. Let sellers do the holding, be wary of purchases. Do you want to be holding an intenbanted property now, something that needs rehab, or a 1/2 completed flip job or new build? I'm interested in perspectives - and NOT from lenders or vendors. They need transactions, dump inventory, cash coming in stuff like that. I'm interested in real investors thought processes at this time. No time for selling.
My business is affected, but I cannot yet tell you to which degree.
Our sellers are not the biggest problem- some of them have told us they want to wait for the air to clear (no pun intended) before they proceed with selling us their property. Serious buyers seem to be just as serious as before, just a bit more diligent with their properties. New investor opt ins through online marketing is steady, although opting in and buyer purchase behavior are somewhat independent of each other.
Commercial lenders are all working from home, and they're not so sure what to do about appraisals that require entry to the property. Most of our appraisals are external, though. We operate across 7 states, so we're waiting to see which title companies and county recorders' offices are or are not open for business.
I'm not so sure about tenants paying rent in April. Wishing all of my affordable housing tenants were on section 8 right now.
Our business and employees are fully working from home, and fortunate to have the ability to do so. Marketing budget has not decreased. It'll probably increase.
This situation is pretty crazy, and unforeseen. But i've gotta say, preparation for this kind of thing has to be baked into each and every one of our business models. Riding out waves like this is key!
Originally posted by @Richard Bonisa:Anything purchased will likely be a hold with no tenant for some time. Watch this stuff take place and transpire. In Indianapolis, people who rent are generally in a certain income bracket. Like I said above, let's just pause, do what we can do for damage control. Let sellers do the holding, be wary of purchases. Do you want to be holding an intenbanted property now, something that needs rehab, or a 1/2 completed flip job or new build? I'm interested in perspectives - and NOT from lenders or vendors. They need transactions, dump inventory, cash coming in stuff like that. I'm interested in real investors thought processes at this time. No time for selling.
Im am currently experiencing this. 2 properties newly rehabbed. vacant. C class. So annoying!
I work with investors in San Antonio so the biggest obstacle that's come up is meeting new people in person. Those that I've already networked with seem to still be buying.
Otherwise business as usual, just a lot more working from home which I assume almost everyone else is having to do as well.
If anything it's improved our business. We don't really have anything to do except work on lead generation, and the best part is that all of our prospects have nothing better to do than open our direct mail from the campaigns we've launched. We had a 90% success rate using EZ Mail Club. Now is the time to launch those letters, people!
Have to kinda say - I warned about the difficulties here. Dont slant me for saying that. I wont take it seriously. My message is this- save your money for now, let someone else "hold" that property for now.
I'm seeing crazy pricing to unload total junk in Indianapolis. IN. Also seeing really high prices - same thing total junk.
I know a lot of good people who are on the front lines in Indy - some rehab, work for small outfits, others working directly for high profile type operations, etc.Hey. If you work or depend on some of these - just check what the governor of Indiana is saying. Many work for "providers" and as an employee or 1099 - if you are working for these outfits and you make less than 75k - then dont risk it. Those who make the big bucks, well let them take the risks. There are many making big money who crap on those who do the real work in real estate investing. Dont take the risk for them. This will bounce back in 12 to 18 months, then we can all move ourselves forward.
Yes, no showings for us and no final walk through s, Open Houses etc. Have a commercial deal on the edge. Of course we are locked down as a state. It is what it is.
My partner and I had a deal we were about to close on. Quick turnaround, large profit margin, low rehab budget, great for an investor. Our money partner got scared and backed out, and then so did the backup. Lender was even having issues getting an appraiser. Eventually had to let the property go. Frustrating, but just re-evaluating our business for the time being and pushing through in other areas until things die down. Shows why it's important to have different avenues of income generation.