INVEST NOW OR WAIT A COUPLE MONTHS??

INVEST NOW OR WAIT A COUPLE MONTHS??

Chicago, IL · Member since 2019 · 39 posts · 8 votes

Hey I'm a new investor in Chicago and had plans of buying my first property this summer. I've already started walking properties and I'm looking for a house hack opportunity on the north side of the city. The Coronavirus has caused the economy to enter a bear market and have many investors predicting a recession this summer or fall. I've been hearing about a recession the past 4 years and I didn't plan on waiting for one to start investing. But with things being the way they are right now and all signs pointing to a down turn (businesses closing, people already losing jobs, feds lowering rates to zero, feds quantitative easing, people having to stay home for who knows how long, etc.), is waiting a couple months the better decision to make? I have an emergency fund + reno budget and I'm only buying if the property cash flows (maybe not while i live in it because prices are so high on the North side, but definitely when it's fully rented). So what I'm really wondering is if I should wait 2-6 months in case property prices drop and buy cheaper. Curious to see what everyone thinks. Thanks

1Reply
39 views

Most Popular Reply

Abel CurielBusiness Member
Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
6y
Originally posted by @Sebastien Beauboeuf:

Hey I'm a new investor in Chicago and had plans of buying my first property this summer. I've already started walking properties and I'm looking for a house hack opportunity on the north side of the city. The Coronavirus has caused the economy to enter a bear market and have many investors predicting a recession this summer or fall. I've been hearing about a recession the past 4 years and I didn't plan on waiting for one to start investing. But with things being the way they are right now and all signs pointing to a down turn (businesses closing, people already losing jobs, feds lowering rates to zero, feds quantitative easing, people having to stay home for who knows how long, etc.), is waiting a couple months the better decision to make? I have an emergency fund + reno budget and I'm only buying if the property cash flows (maybe not while i live in it because prices are so high on the North side, but definitely when it's fully rented). So what I'm really wondering is if I should wait 2-6 months in case property prices drop and buy cheaper. Curious to see what everyone thinks. Thanks

 Great question!

If the property cash flows and the #s make sense, I would take advantage of the low rates and buy now. In a few months, rates could be much higher and the numbers may not make sense anymore. 

Consult your mortgage professional, as rates may have hiked up in the last few hours.

Best of luck to you on your first deal!

Abel

REbuild Team - eXp Realty5234 Reviews
See this reply in the discussion

11 Replies

Jump to latestLatest
  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @Sebastien Beauboeuf:

    Hey I'm a new investor in Chicago and had plans of buying my first property this summer. I've already started walking properties and I'm looking for a house hack opportunity on the north side of the city. The Coronavirus has caused the economy to enter a bear market and have many investors predicting a recession this summer or fall. I've been hearing about a recession the past 4 years and I didn't plan on waiting for one to start investing. But with things being the way they are right now and all signs pointing to a down turn (businesses closing, people already losing jobs, feds lowering rates to zero, feds quantitative easing, people having to stay home for who knows how long, etc.), is waiting a couple months the better decision to make? I have an emergency fund + reno budget and I'm only buying if the property cash flows (maybe not while i live in it because prices are so high on the North side, but definitely when it's fully rented). So what I'm really wondering is if I should wait 2-6 months in case property prices drop and buy cheaper. Curious to see what everyone thinks. Thanks

     Great question!

    If the property cash flows and the #s make sense, I would take advantage of the low rates and buy now. In a few months, rates could be much higher and the numbers may not make sense anymore. 

    Consult your mortgage professional, as rates may have hiked up in the last few hours.

    Best of luck to you on your first deal!

    Abel

    REbuild Team - eXp Realty5234 Reviews
  • Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    6y

    If there is a recession that is a time to buy ;)

    Hopefully our economy will recover but next few months might be rough.

  • Chicago, IL · Member since 2019 · 39 posts · 8 votes
    6y

    @Abel Curiel thank you for your input. Great point!

  • Chicago, IL · Member since 2019 · 39 posts · 8 votes
    6y

    @Caleb Brown that's what i always hear but like @Abel pointed out, rates might now be as good as they are now. But yes, its going to be rough. Hopefully not too rough

  • Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    6y

    @Sebastien Beauboeuf As long as you have reserves and prepare you'll be fine. It's the people the stretched themselves too thin who will hurt. I'd definitely still look but be conservative on your numbers.

  • New to Real Estate · Boynton Beach, FL · Member since 2018 · 59 posts · 31 votes
    6y

    Great post!  I am in a similar situation in the "do I wait or not" thinking.

    I like that the mortgage rates are super low. I also like that there may be some good buying opportunities.

    BUT, if rehab work needs to be done...is now the best time?  Is now the best time to try and find tenants?  Those are two questions that are in the back of my mind but I still believe in pulling the trigger now if I'm able to find a good deal.

  • Chicago, IL · Member since 2019 · 39 posts · 8 votes
    6y

    @Shane Cummings Yes! Exactly my thoughts. I'll still be looking and be conservative. If the numbers make sense I'll pull the trigger. Thanks for your input!

  • Chicago, IL · Member since 2016 · 165 posts · 49 votes
    6y

    Hi Sebastien!  I would recommend getting your search going as you never know when a good deal with come on the market. Right now inventory is low. Rates are terrific so if you find something, I would recommend taking a look at it and if the numbers make sense then I would submit an offer.

  • Rental Property Investor · MA · Member since 2020 · 98 posts · 77 votes
    6y

    Hi Sebastien, 

    Congrats on going after your first property. I'm wondering if the rates will get even lower in 6 months?  Maybe when the refinance frenzy slows down. 

    - Mike 

  • Real Estate Consultant · Chicago, IL · Member since 2014 · 720 posts · 439 votes
    6y

    Hi @Sebastien Beauboeuf, that's a great question. Everyone is concerned about what's going on and they are right to be. At the same time, the last time the market went down it did recover. If it will take 5 or 10 years, it will recover. Personally I prefer to sit in a mortgaged property that is getting paid off and lock in a low-interest rate. When you buy for long-term with low monthly payment, the cash flow benefits outperforms an asset purchased later at a slightly lower price with a higher interest rate and lower cash flow.

    If you find the right property where the cash flow makes sense - I will say - buy it now!

    Over the last 2 weeks, I've been getting multiple calls from first-time buyers and investors looking to get in the market and buy now. As Warren Buffet said:

    “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

    Good luck to you and reach out if you need help!

  • Chicago, IL · Member since 2019 · 39 posts · 8 votes
    6y

    @Lumi Ispas Thank you for your input and advice. Appreciate it!

Join the conversationCreate a free account to reply, vote on answers and follow this thread.