There is no denying that the COVID-19 pandemic has had an impact on the world of real estate investing. In the Fort Lauderdale area, we are seeing many changes as to how business is done in terms of closings, open houses, real estate showings, and much more. In fact, as a progressive company that takes pride in being market leaders in educating others how to profit in real estate, we've had non-stop content and tips as to how this developing situation has impacted business. Today we're going to share our thoughts on how real estate investors can navigate the waters during these trying times.
However, don't let this pandemic get you down, as we recently published an article on how this could be the greatest opportunity in the history of real estate!
Investing in Real Estate During COVID-19
These are some baseline tips that will help you not only get ahead in the market, but also avoid making mistakes. If you have any further questions, please contact us.
· Be extra conservative on your comparables and evaluations of the a property. Take an additional 15% off on After Repair Value (ARV) during the pandemic
· Safety is most important for you and the homeowner. Use CDC guidelines with social distancing and masks.
· Virtual tours are great when you have a property under contract as well as open houses. (We discussed that on this page.)
· Talk to homeowners that are having trouble making payments, about possible solutions (forbearance and short sale payments)
· Explain to homeowners that forbearance does not mean waiver of fees. The lender can either “tack on extra payments to the end of your loan”, or make you pay the delayed payments in three months. For example, you monthly payment may allow you not to make your monthly payments for 3 months @ $2k per month. The 4th month the lender may want four payments equaling $8k. Read more about that on the Corona Virus Mortgage information page.
· Cash is king as lenders are changing lending guidelines.
· Direct mail, online presence and cold calling is the way to go after customers.
· Helping homeowners with Covid 19 information and government programs (this will build trust with homeowners)
· Target Non Owner Occupied homeowners that bought homes from 2009 to 2012. These homeowners bought at the bottom of the market and may want to get out. These folks are good seller financing candidates.
· Stay in your local area.
· Don’t use AirBnB calculations for income on rental properties. Use regular rental rates.
· Remember cities are working with less people, so when you are doing renovations on your projects (REHABS), build extra time for permits to get approved from the city. These will change your holding costs.
· Great time to get into the business, as many newbies with no financial backing will leave the market.