Coronavirus, lockdown, and losing your ass.ets. Lessons Learned?

[Jad Boudiab]

Covid-19 outbreak, media madness, lock downs, eviction moratorium, no rental income, and no NBA. Who in the world would have predicted this?

Now that we're on lock down, I have some down time to check BP. It's to no surprise that many top trending discussions were revolving around the pandemic. While the big blow has yet to hit, I'm curious to hear how everyone on here is reacting to this shift.

Does anyone have ongoing flip projects that have come to a halt? What steps are you taking to finish the project?

Buy-and-hold investors; are you sitting on a sizable emergency fund to weather the storm? Did you already spend that emergency fund on your last rehab? Are you one that's worrying about your next mortgage payment if April and May rents aren't paid? How will you adjust and survive?

Wholesalers and direct-to-seller folks; are you ramping up your marketing spend knowing it's opportunity time? Any luck yet? I don't expect the spike in motivation for another couple of months, but I'm sure some of you are excited.

Regardless of which type of investor you are, this pandemic is the first of its kind for many. Some investors may be wiped out entirely, some may barely make it, and some will rise above it and change their investing strategies going forward to ensure they'll survive market shifts. Now to lessons learned; if you're an investor in a tight spot now, what could you have done differently in the past 24 months to be in a better spot today? If you're a seasoned investor who has weathered down markets in the past, what have you learned, now or in the past, that can help you survive market fluctuations and pandemics? If you're an active investor with flip projects underway, what are you doing to plan your resale knowing that buyers are much more uncertain now compared to just a few weeks ago?

We've yet to be affected much here in Cleveland, it will certainly be a different story in April, but here are my experiences and takeaways so far as an investor, broker, property manager, and business owner these past few weeks.

1. Most real estate investors are WAY too leveraged or operating on thin margins.

2. The first three weeks of March have been record highs for lease signings. We signed 13 new leases between March 1st and March 18th. With that being said, I do expect a slow down now that Ohio is under a stay-at-home order (sort of).

3. Since March 18th, I've seen more buyers back out of deals in 1 week due to uncertainty than in all of Jan. and Feb.

4. It's a great time to call your bank for a business line of credit, whether to expand or to invest.

5. Some of what I consider our "savvy" clientele whom had been sitting on the sidelines for some time, are now reaching out and prepping to buy more property, in hopes of landing good deals. (If you have anything for sale, obviously we're looking).

6. Down time to reflect on the business is undervalued, and critical for continued growth.