REIT once in life time opportunity like housing crash in 2008

[Sam Zhou]

Like many of you, I have been holding cash sitting on the sideline waiting for opportunities in this pandemic. Unlike the 2008 crash, I have yet to see any good deals in real estate at the moment. Stock market also has recovered most of the lost from a month ago. Tech and many other sectors are not impacted much. I remember in 2009, there were a lot deals out there, low-end houses (condos) had dropped 60+%. Tons of REO on the market back then. I was lucky enough to bought a few.

This time, the impact are broader and more severe but opportunity-wise, I don't see much yet. This led me to think maybe REIT is the star for this time. I am seeking opinions from our BiggerPockets people as you are the best in this area. Here are my thinking process:

1. REITs price was hit hard this time, especially the Office / Hotel / Residential, etc. Not so much for the data center ones.

2. Yield is acceptable ~5-8%. Note that some are listing as 20+%, that was because the current price had been cut in half. The reason I said "acceptable" was because I am comparing the condo return that I purchased in 2009. Take one house for example: Paid $150k fully cash for a condo in 2008. Value appreciated to $400k now. Rent is $2000 / month. While the return looks good to me. But I am also thinking that I am sitting on a $400k cash with only $24k annual rent income. That is about 6% only.   

3. If a REIT's price is cut in half, it is like the properties it is holding also drop half in value (but in reality it does not). This make REIT quite attractive at the moment.

4. If we don't care about the coming 6 month yield, in 1-2 years timeframe, if the price goes back up to normal or if the rent goes back to normal, the yield should easily be doubled, (even it is still 6%, the actually cash u are receiving would be doubled if the stock price goes back up.)

5. The argument saying tenant not paying rent, that might be just a temporary thing. Given the government is helping hard, I haven't had any tenant not paying rent yet. So if the virus thing cools down, people's life will resume to normal. Some habit may change, but largely people still go out, and rent still need to be paid.

So ....is REIT a good choice to get in at the moment? I really couldn't find much other better (and safe) investment options at the moment.

Appreciate for your input.

Sam