For sale by owner sign outside a house in the southern United States, where property values are … [+]
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The midst of an epidemic might not seem like the best time to invest in anything. In fact, for many, this is a time to take whatever money they can find and to stuff it under the mattress.
Some specialists, however, see opportunity were others see threat. One of those is Clint Coons, a founding partner of Anderson Law Group, an arm of Anderson Legal, Business & Tax Advisors. The company has offices in Washington, Nevada, Wyoming and Utah; Mr. Coons is currently the manager of Anderson’s office in Tacoma, Washington.
“Right now, from an investment standpoint, there are lots of deals to be had,” he says. “Especially if you are a cash buyer.”
Although the stock market has performed well in recent years, it is volatile and unpredictable, Coons says.
“There have been huge swings, which means that, one day you have lots of money and the next day, you have none. But while the value of real estate assets will also recede, there are many more factors in play. When property markets lessen, there are more renters, for example.”
Coons believes that an excellent way to monetize the current real estate landscape is with “Subject To” investments. “Subject to” investing is a method of purchasing property that leaves the seller’s loan in place. In essence, it allows the buyer to purchase real estate without getting new financing for the property – he or she is buying real estate that is “subject to” the existing debt.
“When times are uncertain, people get scared and are open to things they might not have considered before,” says Coons. “In January, I was negotiating with a seller in New York for a multi family building, and it was going nowhere. By late February, the seller could not handle the stress. He reached out to me and we negotiated a sale in which I took over the mortgage. I will pay it and keep it in his name for two years, then we will change the terms and complete the transaction.”
He suggests that this is an excellent time for cash buyers to comb the MLS listings for properties that have been sitting on the market for a while.
“For borrowers, things go very slowly. But cash buyers can move things along quickly with “subject to” investing.”
Today, Coons believes that single-family properties are a good investment.
“Multi family will be more complicated,” he says, citing rent abeyances offered by a number of municipalities and state governments in response to the corona virus.
Geographically, he suggests that investors stay away from the coasts.
“Especially in California, they are almost socialistic in the way they go after landlords. That is also true in the northeast, and it makes it too risky to invest. Also, real estate values are so inflated in those areas that it’s hard to enter the market in the first place.
“Look to the interior,” he adds. “Texas always offers good opportunities for investing, although pockets like Austin have become less affordable. North Carolina, too, is a very good real estate investment market.”
How will potential real estate investors know that the window of opportunity has closed?
“When people no longer accept your offer,” says Clint Coons.