Understanding Real Estate Post COVID-19
When 2020 came around, it seemed like the real estate market was off to a pretty good start. Billion-dollar deals were being made and records were being set. Even though we saw a rise in property prices, home buyers and investors continued to make deals.
That’s when COVID-19 arrived.
Within a month of the Coronavirus arrival, new safety guidelines were put into place and over 40 million Americans became reliant on unemployment. Companies that had been around for a hundred years, including Neiman Marcus and JC Penney, went completely bankrupt.
Some of the biggest companies in the market, like Zillow, shut down many operations. A fair portion of those jobs or businesses might never come back.
There are a few things that we do know, however.
- More millionaires are born through real estate than any other industry out there, including tech.
- Times of uncertainty typically produce the greatest wealth
- Real estate is combining with tech to make investing easier than it has even been
- Americans who are making solid incomes are finding ways to protect their retirement funds, including real estate investing.
- This pandemic will not last forever
A Unique Marketplace
The industry will see some lag in the coming months. Borrowers and renters will begin to take advantage of moratoriums through foreclosures and evictions. Either they will resolve these things by the end of the year by figuring out how to catch up with payments or move elsewhere.
In terms of leases and closings, there may end up being a small dip in data. Prices will likely drop in some areas, though it won’t last long.
We are beginning to see some serious changes in the lending world. A few weeks after the start of the pandemic, Chase made an announcement about the company’s newer and stricter loan criteria. Home equity loans dried up from Well Fargo too.
Buyers are turning to alternative funding sources, such as private and hard lenders. Private money is typically loaned using funds on-hand while hard money is usually sold to wall street, where it eventually creates an infinite funding loop.
Private and hard money sources do not require any money down or credit checks, unlike banks. However, they have billions of dollars waiting for investors to use. Borrowing is cheaper than it ever has been with insanely low-interest rates.
A Noticeable Shift
One of the most obvious changes in the market is that people are looking to purchase property in unlikely locations. Rather than condos in urban environments, people are looking for homes in rural areas with more space for amenities, such as gyms, home offices, gardens, and more.
Some strategies we recommend using now include:
- Short Sales
- Micro Flipping
- Buying Mortgage Notes
- Foreclosure Auctions
- Fixing and Flipping Low-Priced Properties
COVID-19 should not be an excuse for anyone. If you invest correctly, you can:
- Create profit while social distancing
- Work anywhere you want
- Profit Quickly
- See upside potential
If you have any questions about investing in a post-COVID market, make sure to get in touch with us here at National Cash Offer.