COVID-19 impact on NW Washington Market

[Grace P.]

We are in contract on a SFR in Anacortes, WA. Original plan is to rehab and sell. It will need about $30-40k in rehab. Purchase price is $300k. ARV is $450-500k. We are getting concerned about how the Corona Virus will impact the market and if values will plummet. Do you think we should pull out and lose $3000 earnest money or ride it out and see what happens? We could rent it out if it doesn't sell. We are using HELOC tied to other rentals and primary to purchase it. Interest will be about $1500/Mo. We can swing it if it doesn't sell but it will be tight.

[Ruth Bayang]

Hi @Grace P.

My friend @Nghi Le posted this in another forum (I encourage you to join WA Real Estate Investing on Facebook)

"For those still buying value-add deals (either flips or BRRRRs), I implore you to begin with the end in mind, more so now than ever. If your strategy depends on future values and future rents (or even current values and current rents), or if it depends on you being able to get another loan to refinance, you need to have an alternate exit strategy. Nobody knows what an ARV looks like in 3-6 months, and with conventional loans tightening and unemployment rising, your buyer pool is going to shrink.

Just be careful out there. Opportunities will be coming, but you have to weather the storm first. Keep your reserves high. I want to make sure my real estate friends are still my real estate friends in a year."