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June 11, 2021

Coronavirus Got you Scared of Investing?

The stock market might have gone from bullish to bearish seemingly overnight and countless people are regretting not getting out, but it doesn’t mean there aren’t still good investment opportunities.

As the stock market drops, the desirability of real estate increases because of its relative stability and tangibility as an investment …for those who can afford it.  I’m sure many think that before the coronavirus decimated the stock market they were unable to afford real estate investments, so now that they’ve lost a significant portion of their funds that they definitely could not afford to purchase an investment property now.  This, however, could not be further from the truth.  The reality is if you can find a good property, you can find funding for that property.  There are several options for individual real estate investors: buy and hold, fix and flip, and wholesale real estate.  Wholesale real estate is a bit of a misnomer as the investor is flipping contracts of real estate as opposed to real estate.  For this article I will focus on buy and hold and fix and flips.

I mentioned earlier that many aspiring investors or even current real estate investors believe they are unable to either invest in real estate or expand their portfolios due to limited funds, but that there are funding opportunities available.  One such solution is through a traditional mortgage, but for many investors securing such loans is extremely difficult.  Another solution is private lenders.  These loans typically have a higher interest rate than traditional mortgages, but are much easier to secure and will use the property as collateral.  Fund.me is an intermediary company that matches investors with lenders that are best suited for one another and will help you take the right steps toward a successful investment.  It’s like a dating app, but with less judgment and someone to counsel you as you go.  

For buy and hold investors there are short term and long term rentals.  The short term rentals have definitely taken a tremendous hit with the coronavirus, but their property still carries it’s intrinsic value.  There are tangible benefits to real estate even in such trying times and any short term rental can be converted to a long term rental as people still need places to live.  As a recession is likely coming, the demand for housing will only grow as more people are priced out of the housing market.  Furthermore, the demand for housing will continue to grow due to the limited supply of houses.  This is where finding desirable locations for rental properties is essential.  

Mortgage rates have fallen to a record low, but jumped recently with all the refinancing application.  Despite the increase, mortgage rates are still very low and the good news is the Fed plans on buying $200 billion of mortage-backed bonds to bring rates back down under 4%.

Although it’s easy to get down with what has been happening, don’t lose hope, there are deals to be had and lenders to help start or grow your portfolio.

Source: https://www.mashvisor.com/blog/best-real-estate-investments-coronavirus/

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Manly Danh
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