All Forum Posts by: Matt Higgins

@anthony wicks. Thanks for your Initial thoughtful response.  I’m sure you’re a great guy, enjoy Ankeny Iowa .
Sorry, more hyperbole 

@Anthony Wick

You can’t buy insurance for a pandemic. This is not a predictable event with a predictable time table or set of outcomes.

The US economy has never shut itself down on purpose for 3 months to a year.

We do not know when or what the new normal will be in 18 months for society. I’m glad you think we will be back hand shaking, rent raises, and lower cap rates. I hope you’re right.

@Sam Josh

The economy has never purposely shut half of itself down for 2-18 months. I believe in faith, no use in worrying about things we can’t control, but this is uncharted waters. We don’t know what the ramifications will be.

@Maya Torres

I might hold off on the real estate license. The fees are pretty expensive and activity is going to slow down. We have a property management and we are still finding qualified tenants so I wouldn’t let the ability to find a tenant stop you.

I hear ya.  The SBA options sound pretty good too, but this is as big of a short term jolt that we could possibly have had.  The price of rent is going down fast in the short term.  Rental rates are dropping and who knows how long it will take to come back?  Unemployment will rise to a level this country has never seen in the short term. 

I was a bit discouraged today, the first, when the ACH withdrawal hit and the collection number was not great.  I thought for sure April rent collection would be strong.  Still might be, but it was discouraging.  

 

Just read an article from the MIT technology review and read up on what we already know. Life is not going back to normal tomorrow, next month, or maybe ever.

https://www.technologyreview.c... 

until we get a long term fix for carona our economy will be as bad as its ever been.  MIT predicts that this will not be the countries only bout with social distancing. Some will go back to work, and when cases rise they will clamp down again. It sounds like eventually rules will have to be enforced at the city, county, or state level. We will have to restrict travel and sacrifice some of our social liberties to live with the virus. How many business or apartment operators can withstand a 12-18 month disruption? How many people who work in US retail will be laid off by the end of this month? It amazes me that the stock market is only down 7000 points. After disastrous earnings reports for the next 3 quarters the only thing CEOs will be able to tell share holders is that we are cutting expenses and laying people off. Even if the government puts a moratorium on foreclosures who will still have a job when the moratorium comes off? The foreclosures will come in waives.

I have heard people say A and B class apartments is where it’s at because their jobs are safe and they can work from home. BS, I know a bunch of mid level executives and some are already being let go. Eventually they will trade down to C class. I am sure some of my C class tenants will be laid off soon, but at least they should be able to make most or some of their $700 rent on tax returns, unemployment, and stimulus. Even if they don’t, I would rather miss out on a $700 payment than an $2000 payment. I would rather pay my C class property tax bill than the A class bill.

Sorry if this is too doom and gloom, but I got the carona blues :(

It sounds like the government is going to bail out as many people as possible, but just like in 08, the people who had their loans modified usually ended up losing them anyway. I’m sure the fixed cost of running an apartment in NYC is high, you have a moratorium on evictions, a governor threatening civil war in a state telling citizens not to pay rent, and talking for 2 hours a day on national tv about how to make pasta. None of this can be good for the investor who was already losing residents to low tax states.

I wonder how the refi & roll, brrrr, and vrbo strategies will look 18 months from now? My least favorite BP line of all time, “I can’t wait for the next crash so I can scoop up all the good deals”. I’m sure that line is usually given by the highest leveraged of all of us or the person that will always be too scared to jump in.

Crazy times, someone talk me off the cliff :) how hard will multi family be hit when the dust settles?

Backed out of a deal today.  Still in the due diligence phase and it’s a different world since I put it under contract.  Also, locked in a refi on a house we owned outright @ a higher rate than they quoted me last week, but whatever.  Cash is king for the next couple years IMO 

@John Woodrich I might be dealing with the wrong banks but I feel like my line of credits were pretty expensive to set up and they always want that money at least 100% collateralized.  Also, they have been pretty stringent on the 1 year agreements. What happens if you have a couple projects going and they call the money?  I don’t trust these local banks at all personally, especially considering most of them have changed hands over the last 10 years.  I have some properties fully paid for and I almost think the 30 year cash our refi is the way to go.  They can take the fees out of the loan if you want.  I say this fully aware that @John Woodrich knows more than me.  Just interested to hear his response especially considering the tough moves I want to make tomorrow morning.  

@Jay Hinrichs

I had some tempered bravado, but bravado is gone! I will continue to look to you as the foremost leader of knowledge when it comes to long term buy and hold. Thanks for sharing your formula as a road map for how to proceed during trying times. It is appreciated!

@Jay Hinrichs

US futures halted already down 5%, 10 year down to .5%, and oil down 22% in a day.

It’s gonna be a wild ride. Hard to see a scenario we’re this doesn’t effect real estate. Do you cancel deals under contract or buy more?