It may not seem like the right time to invest in something during a pandemic. This is actually a time for many to take whatever money they can find and to stuff it under the mattress.
Nonetheless, some specialists see potential where others see danger. One of those is Anderson Law Group’s founding partner, Clint Coons, an arm of Anderson Legal, Business & Tax Advisors. The company has offices in Washington, Nevada, Wyoming and Utah; Coons is currently the Anderson’s office manager in Tacoma, Washington.
“There are lots of deals to have right now, from an investment standpoint,” he says. “Specially if you’re a buyer of cash.”
Despite having performed well in recent years, the stock market is volatile and unpredictable, Coons says.
“There have been huge swings, which means you have plenty of money one day and none the next. But while immovable asset value can also decrease, there are several more factors in play. For example, when property markets diminish, there are more renters, “he adds.
Coons believes that the “Subject To” investments are an excellent way to monetize the current real estate landscape. “Subject to” investing is a property purchase method that leaves the seller’s loan in place. Essentially, it allows the buyer to buy real estate without getting new financing for the property – he or she buys property that is “subject to” the existing debt.
“When times are unpredictable, people get frightened and are open to ideas they may not have thought about before,” Coons says. “I was negotiating for a multi-family building with a seller in New York in January, and this was going nowhere. The seller could not cope with the burden by late February. He reached me out and we were negotiating a deal where I took over the mortgage. I’ll pay it for two years and keep it in his name, then we’ll change the terms and complete the transaction.’
He says this is a perfect time for cash buyers to search the MLS listings for properties that have been on the market for some time.
“The things are going very slowly for the borrowers. But with “subject to” spending, cash buyers can move things along quickly.
Coons today believe single-family homes are a safe investment.
“Multi-family will be more complicated,” he says, citing rent abeyances offered in response to the corona virus by a number of municipalities and state governments.
He recommends geographically that investors stay away from the coasts.
“Specifically in California, the way they go after landlords is almost socialist. That’s true in the northeast as well and it makes investment too risky. Also, in those areas, real estate values are so inflated that it is difficult to enter the market in the first place.
“Look inside,” he added. “Texas always offers good investment opportunities although pockets such as Austin have become less affordable. Also North Carolina is a very good market for investment in real estate.
How are potential real estate investors going to know the window of opportunity is closed?
“When people don’t accept your offer any more,” Coons says.