All Forum Posts by: Matt Higgins

@Susan Maneck

Totally agree. One of my points was that unemployment is going to be crazy.  My theory was spot on with today’s job loss number being double expectation.  Unemployment is probably paying 1:3 rent to income in half of our portfolio and 1:2 in the other half. If you’re renting at the A class or on the coast a $1200 stimulus check covers half the rent and you only get that if you qualify. Hopefully this is a 2,3,4 month issue, but they cancelled the British Open, political convention, and I fear the NFL is in real trouble. It’s going to be around awhile. It seems like none of the stimulus thus far has been aimed at the high W2 corporate income earner.

@Stephanie Singer

Property leasing hasn’t slowed down. We are still operating business as usual as far as showings and our leasing operation. Current vacancy is less than a %, rent must be too low:). Renting was a breeze during the last recession too. The reason I believe this is different is because I fear that our current tenants will not be able to pay, don’t think they have to pay, and we can’t evict them. I do currently see deals falling out of contract, real estate sales slowing down and prices dropping for home sales. That could have been thanks to a short term rate spike that seems to be subsiding, but my guess is it’s mostly fear. I think the window to sell is closing fast.

@Jay Hinrichs great story.  Congrats on being ahead of all this.  Do you agree the biggest issue to real estate would be higher rates?  SBA, PPP, and forbearance should get even the bad operators through the next few months.  If the FED wouldn’t let interest rates rise over the last decade do you think they will start now?  I have to think they will continue to buy bonds and try to keep the rate down. Basically, do you think they will be able to maintain control of the rate?  
If so, or if rates go lower, leveraged deals should be ok right?  I’ll say this, it’s concerning how bad the short term deflationary pressures are at the moment.  Gas, rent, salaries, etc, but 5 years out is USA will still be the best ugly house on the block?

@Rion Manita

6.6 million workers filed for their first week of unemployment benefits in the week ending March 28 — a new historic high. Economists polled by Refinitiv had expected 3.5 million claims.

this pandemic thing is pretty crazy in the short term 

@Keith C.

I’m with ya keith. I heard a guy say the best part about a recession is knowing that each day you are one day closer to the end.

Lot of money being put in the system so it’s hard not to like an asset like real estate long term. There will be lots of dollars chasing deals again. I don’t want to be the poster boy for pessimism on this thread. I’m buying a deal Monday! It will be the ladies and guys that run good businesses, had reserves, and acted proactively that will come out of this thing unscathed. I switched some of my loans to interest only, we applied for SBA, and I pulled out cash from one of the properties we own outright. Life could be a lot worse. I hope we all come out if this with our health.

@Jonathan Greer

Ha. I played college football & drank miller lite, spelling and grammar has never been my thing. We have 130 units of or our own and manage some units for others, 60% of our portfolio rent has been collected as of today the first. I would imagine this Friday should be a good collection day as the late fee doesn’t hit till the 5th. We are pretty conservative and in a good spot. My guess is we will collect 90% of April rent and we could go some months at 0 income.

I had a couple friends get laid off this week. The article out of China says 6 months out they are still struggling with the Rona, the golf course is closed, my friends businesses are closed, my other business is operating at 50%, pricing my flip 20k less than I thought I would get, it’s a lot of things.

Obviously the government thinks this deal is bad. They’re throwing everything they can at it. Idk how anyone who has been locked in a house with young kids for 3 weeks could think anything other than this situation is dire!

@Robert J.

You are right. I just read that article and they say a 34% reduction in GDP and 15% unemployment. My bad

@Robert C. I listened to that podcast and I listen to their podcast weekly.  They have really been giving that exact same Doom & gloom message for a long time though and If you say it long enough you will be right.  Last weeks message was that the baby boomers are selling their McMansions and demographics dictate that housing is a bad investment for the next 30 years.  The guys big advice today was to buy US Treasurys for the forceable future.  I don’t think the market bottom is in yet, but if you’re in the market for the long run I would have to think there are better investments long term.  It’s tough to time the market.  You could also argue that we haven’t built enough SFHs and that’s why the entry level market has been so hot.  With the latest recession I doubt housing permit numbers will rise too much.  Same old story from the book though still rings true, your house isn’t an investment.  

Great podcast.  Robert says some pretty outlandish things and his poor wife Kim tries to keep him in check.  Reminds me of a night on the town with my wife (back when we were allowed to go out)

@Robert J.

I have a flip hitting the market this weekend and I’m closing on a property Monday (despite my wife’s concerns). I would caution this. Real estate prices will start to drop when the layoffs come. Most retailers got laid off this week. Blue and white jobs both lost. Goldman Sachs is predicting 20-30% unemployment in the quarters to come. Real estate is usually 3-6 months behind the stock market. Maybe a little longer with the forbearance and money getting pumped into the market. My attitude on my flip hitting the market this weekend is sell it for whatever it takes to close. I thought I would get 250-270, but I’m going to price between 230-250. The property I’m buying Monday is for 50k and I’m putting 25k into it as a hold and my attitude is, if this would have been a good deal in 2009 it’s still a good deal today. Zillow has it at 120k.

I think 20-30% unemployment means that real estate will lose significant value. I hope I’m wrong

@Maya Torres good luck. You will be in a good position to help build your portfolio. My real estate commissions were in excess of 50k last year and that’s just on my own deals. The quarterly, annual, electronic keys, continuing education does get a little old, but the agent game is still a great racket if you are actually able to put deals together. Good luck! Down with carona, we will get through this, and we all appreciate your husbands service.