How is everyone feeling on buying now?
New to Real Estate · Member since 2020 · 39 posts · 14 votes
I am just getting my feet wet in real estate and I am curious to know what is everyone thinking regarding purchasing multi family investment properties now during a pandemic?
I’ve been reading and watching videos and it seems like many are leaning towards waiting to see what the markets do. I feel like market can be a bit difficult to time, and seems like many are selling properties to avoid a loss.
Would love to hear from more experienced investors on your opinion: Do you think now is a good time to invest for someone new to real estate or wait it out until 2021?
Thanks
If you have run the numbers and it appears to be a good deal, then I would go for it. Desirable properties do not come up every day, and when they do, I always want to be ready. If I worried about timing the market, I would have never invested in real estate. Do your due diligence on the cash flow and expenses and analyze deals. Wishing you great success!
it's a seller market! We were outbid by over 5 people. The place we wanted went over $50k above asking. All other listings were also flying off the mrket. We know enough to put a hold on buying. I'm not sure what others had in mind. perhaps getting a property is more important than numbers since rate is historic low. Well we want it all. We want amazing deal & good rate :) temporarily we are parking our money in stocks until RE cools off
This market is no joke and trying anything short term is a crap shoot. I cannot imagine trying to flip or brrrr in this market since no one knows what the next 6 months will bring!
Reading through your other posts to determine the most beneficial response.
Recommend the following at this stage
A. Financing level- determine your finance capacity. Example: 10% collateral on an SBA loan and you have $10,000 cash or collateral means you can do a $100,000 deal. If traditional mortgage with 25% collateral then you can do a $40,000 deal. This will help narrow your thought process
B. Determine if you want to be an individual investor or an institutional investor. Example do you want to invest $10,000 with an organization or do you want to be the one leveraging $10,000 into a $100,000 investment? This is a risk reward decision
C. Since your just starting out how much can you risk? Risk means your lifestyle won’t be impacted. Still have a place to live. Family will have food. Kids will still be able to go to college. Etc This is how much you should invest. Asking a general question on BP means you will get a ton of variants that probably won’t fit your situation or risk reward levels
D. Your in the Chicago area. High price, few low $ entry points.
Recommend:
1. Go to local meet ups and find someone to do a tag along with the type of investing your interested in
2. Start doing deal analysis on the type of investments your interested in. Get other people to challenge it on this forum. Keep building a “tool chest”. You will note most of the people say anytime is a great time to invest. Others say as long as the numbers work and meet your objectives. Do this step so you get to their level of decision making
3. Offer your help and work with someone on the weekends in the investment area your investigating
4. Decide if you want quick profits (fix flip) or long term passive revenue.
Even if you have zero dollars you can do a real estate deal in Chicago. The reason I note that, is there are tons of options out there. You just need to find them and the ones that fit your risk reward level.
If you're looking at the numbers and it makes sense according to what's important to you, then I don't see any reason why not to invest right now. If the numbers make sense, its a good deal. Would you forego a good deal because you think you can get a better deal? That just reminds me of waiting to buy into the stock market because you think its going to go lower, or you wait to buy in because you think its overbought, but it just keeps going up and you look in retrospect thinking "I should've got in sooner."
It's investing, if you're one and done, you're running the risk of a bad deal. But if you're consistently buying deals for years and years, then you'll take advantage of dollar cost averaging. Some deals might have an awesome cash on cash return (like the one I picked up in December that's running a 44% COCR) and some deals might be ehhh not so much. Even if its a bad deal, hopefully you'll get an education out of it.
Personally, I think the worst thing you can do is just sit on the side lines and do nothing. Just continue to make strong, sensible offers and maybe you'll snag one.
(Disclaimer: When I am saying (Do it yourself) I am not referring to you in particular @Marcus Auerbach (I know you are a professional on your field) and I know you asked the question to generate some interaction on the platform. I am posting to incentivize whomever is feeling like indeed is not going well for them... )
I personally I feel good, As long as I am are getting it under market . ;) ... I suggest, Really try to get your own lead generation system, and negotiate yourself If you are intentionally and actively looking for opportunities, YOU WILL FIND IT. Also, You might get a decent deal on mls, But you really need to be like a hawk looking for those. and wholesaler you can get deals , now you have to know you will pay for a premium ( between .75 cent -85 cents on a dollar without considering rehab. , cos they know it is what it is and houses are selling ANd very important, try to deal WE a wholesaler that gets the deal HIMELF or a legit company (DIRECT FROM SELLER) (NOT A GUY WHO IS SELLING THE WHOLSALE FROM THE OTHER WHOLSALLER OF THE OTHE WHOLESALLER) . OR a good RE Agent that specializes on distressed properties.
And again do it yourself, put bandit signs , cold call taxdeed , or foreclosure... Just to name a few .
To help narrow the discussion down to "you".
See my notes above.
A. What is your initial investment level? $xx,xxx or $0; What ever the amount is fine. It will help determine the path, the posters will help advise you on.
B. What is your finance plan? Just your money, Traditional Financing, SBA, Hard money, etc. This will determine collateralization %, which will determine your deal size. Go talk with all of these, and start getting to know them and you plans/thoughts. Don't wait till you have a deal. At first money is hard to find. After you have a track record and several deals, money starts gushing out of the ground, and you have to be careful using it.
C. Are you looking for a Fix/Flip, Long-term passive revenue stream or just start learning?
D. Recommend you stay local for your first deals. More hands on learning. If you know trade work great. If not, recommend you work with Habitat for Humanity. Even if housing isn't your investment goal, it will start to get you familiar with the trades.
E. Have you found an investment group in Chicago to hook up with? If not, ask these folks, they will be glad to help.
F. Make an outline of your "Tool Kit". Zoning, permit process, electricians, plumbers, financiers, neighborhoods, legal, accountant, realtors, wholesalers, property tax rates, property insurance, etc. Don't worry about going out and getting these lined up. Just know you need to, and as you talk with folks, start filling in the blanks.
Which of the above have you got knocked out? Which do you need help with?
Covid and its rent moratorium made me sit on the sideline since last year. But in my local area-Northern Nevada- the market is still way overheated. Now I have been interested in buying again, but I am hearing , that big commercial investors like Black Rock are moving into SFH. They are outbidding everyone just to dominate the market and possibly as inflation hedge.
bought a SFR with a garage conversion for 143k cash, worth 180k+ in Bakersfield CA, gross rents should be about 2k, rehab maybe 10k
so answer is always yes if you know your numbers
As others have said, whether the market is up or down doesn't really matter. The numbers either make sense or they don't.