We have a Coronavirus pandemic, now what?Pandemic – Now what?

Many are practicing social distancing, the stock market crashed, businesses are closing, and the fed cut the rate to zero but now what?  So much is changing so FAST!

I am hoping everyone in our community is safe and feeling good while practicing social distancing.  This is a massive black swan type event that we all take extremely seriously.  One way to find peace in this chaos is by helping someone in need.   Maybe it is one of your neighbors or a family member that needs to hear from you today so call, text or email them to check in on how they are doing.

As we hit pause and spend time at home, be sure to enjoy the extra time with your immediate family.   This is stressful for your spouse and kids so find ways to come together as a family.  Maybe play some games and make this time special for them.I hope you are positioned with multiple streams of income for the challenge we are facing financially.  Below are my thoughts on what could occur, and opportunities real estate entrepreneurs may experience in the coming months.

1.      Rentals

Traditional Landlords – Be prepared to communicate and be flexible.  Many parts of our country have placed evictions on hold.  You may have residents who are displaced from their employment and you may need to be ready to waive late fee’s along with accepting partial payments and payment plans.  For maintenance requests communicate that you are focusing on the most critical items right now and trivial ones can be put on hold.  For maintenance remember your handyman will be critical for maintenance so be sure to express your gratitude for their help.

Short Term Rentals – This is a niche segment getting a ton of cancellations right now and it is painful to have the reduce cash flow.  Take a look at your marketing plan and ensure you are reaching as many as possible.  If you rely only on Airbnb, then add VRBO this week.   For example we had 2 Airbnb cancellations this week and that opened up our schedule to take a 17 day booking today on VRBO.  If we had been only on Airbnb we would have missed this nice surprise booking today.   If you have smaller units, then consider serving the travel nurse niche which is a niche I happen to love.

2.       Flips and the Retail market No panic.  Most markets continue to have very low inventory and the rate cuts are creating new buyers.   We find houses priced below the median are still selling fast.  We sold two houses retail last week, both went pending in under 24 hours during the pandemic.   Also thank your contractors and set them at ease that you are still working on rehabs.   If you are considering big gut job rehab flips right now I would carefully consider not doing them as we don’t know if or when prices could drop a bit and 6-8 months from now we could have an entirely different economy.

3.     Wholesale market – Sellers have plenty of equity but until recently many were not motivated.  The pandemic fear has created some motivation that can lead to new off market deals.   Work through your follow up list and call back the sellers who were not quite ready.   If they have vacant, distressed houses they may be ready for you to help solve their problem.

   As always focus on people, not profits and help them find a solution.

4.      Private Lending

If you are the lender:  Check in with your borrower and see how they are doing and confirm their crews are still actively working.   They should be as I know ours are working every day since Lowes is still open here in Virginia.

If you are the borrower:   Check in with your private lenders and see how they are doing.  Give them the confidence that everything is moving forward on your rehabs and your business is operating as it always does.

5.     Debt –  I am hoping those that attended our Deal Maker Event took the action item to review debt.   Check where you are at with your lines of credit and check in with your banker to see if they anticipate any changes.  You should know your business debt, but just in case now is a good time to know which credit cards have the highest rates and most debt on them so today check them online and get your arms around it so you can create a plan to eliminate it.   This is an area that investors tend to ignore until it is too late, don’t let that happen to you.   Make an effort today to understand your exposure.

6.     Online – Since many are working alone, this can be a good time to work on your online presence.  Update your websites with more recent testimonials, update your social profiles and expand those networks.   Consider starting a YouTube channel for your real estate business.   This weeks podcast with Connor Steinbrook is on this exact topic so check it out with this link.

Video Marketing and YouTube with Connor Steinbrook

I think we will see new opportunities to buy off-market deals and maybe multi-family cap rates will rise making new opportunities to buy apartments again.

Most important is to rally together, help those in need, focus on your spending amazing time with your immediate families.   As we hit pause, take those personal relationships deeper while working on the plan for the rest of 2020!

What are your thoughts on what is ahead?

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