Buy Now or Wait Until After Covid-19

[Michael Taylor]

I am finishing up doing a rehab on a 6 unit building on the southside of Chicago, now I am ready for my next building (again looking for 6 to 12 units).  To my surprise, prices have gone up on properties (I thought they would have gone down or stayed the same because of Covid-19 and the recession).  My wife tells me that I should wait and not buy anything because Chicago has too many tenant friendly laws and that people are not paying rent.  She has a friend that purchased a building, and none of the tenants in that building are paying rent because they know that they cannot be evicted.  The mayor and governor keep pushing back evictions, so people are taking advantage of it and not paying rent.

I understand her concern, but even if I were to purchase a building today it would be 60 days before I close.  I am hoping that by the fall Chicago will at least open the courts and begin evicting people.  Also, I am concerned that prices will continue to go up not down.  Should I buy now or wait until after Covid-19 is over (whenever that is)?

[John Warren]

@Michael Taylor the advice about pricing going up is correct from what I have seen. As a local realtor, I saw a short term dip in buyer demand but the buyers have come roaring back. Everything worth buying ends up with multiple offers. There is a lot of doom and gloom, and admittedly times are a little tough as a land lord, but I would still take my B and C class apartment buildings here in Cook County over stocks right now... Last month I had zero missed payments. If an eviction comes up, so be it. With the way people talk about evictions you would think that the goal is to evict people! I have 58 apartments and have only done two evictions in my career so far here in Cook County. 

The other funny thing is to hear about the population decline. Normally you hear about this from people living in towns that are the size of the sub markets I invest in here in the Chicago metro area. Cook County has 5.1 million people... I don't think your 6 unit is going to be in trouble any time soon due to population decline.