Continue with closing or back out?

[Michael Anderson]

I'm a first time investor and am scheduled to close on my first SFH April 3rd. I am buying the house for $37/sqft - others on the street have sold in same condition as it will be in post rehab for $75/sqft

Class B/C -$10k rehab, I'll have about $12k left in the deal. Expected rent is $1200-$1300 - PITI will be $950

I'm obviously nervous about moving forward being that this is my first investment and the economy is falling apart, I have plenty of reserves but I believe the housing market is bound for correction being that so many people are out of work and over leveraged. 

Opinions on whether or not to move forward?

Thanks!

[Dan H.]

I would back out unless it is a great deal.  This is especially true if you are still in your contingency phase.  Even if past your contingency phase, I suspect there will be issues with anyone trying to keep the good faith (GF) money for anyone pulling out due to Corona fears/uncertainty.  How much is the GF money?

Here is my rationale for backing out.:

• Decent/pretty good opportunities are a dime a dozen.  Nothing special.
• There is currently a lot of uncertainty which is includes in RE prices.  I can see 2 ways this plays out: 1) RE falls significantly 2) RE holds its current value.  The scenario I do not see is that RE prices go up significantly.  If you agree with me and #1 happens, you could be out a lot of equity.  If #2 happens, so what?
• With the associated risks, it may not be easy to get rented.   Few people will be looking to move.  So to obtain one of these few may require a rent reduction.
• There are many areas where evictions are on hold.  This could mean that you could get a tenant who does not pay rent.  This would be terrible for someone who has not already collected rent and hopefully built up reserves.

Good luck