Much thanks to each BP members reply and knowledge here! My cold feet on this deal is largely due to it being a full cash offer which got us the winning bid and seemed like a great option 3 weeks ago. Since then, the COVID-19 issue continues to get worse each passing day. I agree mortgage rates are very attractive and getting a loan will relieve the cash on hand issue. So due to such unforeseen circumstances, we are requesting a closing extension date from the Seller to allow us to obtain financing to get the deal done. Hopefully they accept!
One item I did want to respond to is the severity of the COVID-19 pandemic. Although, I love the optimism by some here and everyone is certainly entitled to their own opinion, my opinion is this virus is going to have an affect on our economy for many months ahead and may even go into 2021. I too had a more optimistic view on this even just 1 week ago, but after listening to medical doctors including my wife, this virus is unlike any we have ever seen in our lifetime. Of course, it is not a death sentence for most people which is great news, but the spread is like no other. Infected cases remain relatively low in most areas across the US, but if you notice these figures are doubling every day - do the math and you can get to millions infected very quickly which will inevitably put a massive strain on our healthcare facilities (look at what is happening in Italy). A mass produced effective vaccine will likely not be ready for 12 - 18 months assuming beginning trials go good. In order to contain the virus, we essentially have to put our economy on hold. Careerbuilder did a survey not to long ago where they found 78% of workers lived paycheck to paycheck. This survey included homeowners and 6 figure + salaries, I suspect if you surveyed renters only, that 78% figure would be much greater. Many business owners I know are only able to provide 2 weeks pay (if even) before they have to make layoffs. Workers will than flood to the unemployment line. Have you ever collected unemployment? - Not a replacement of income by any means for many people living beyond their means. Then government aid is only sustainable for so long. Many renters at a certain point will not pay rent and government mandates will tie the hands of investors for taking any action for some time.
After all that, most of you who read this will probably be saying to themselves, "Wow this guy needs to get outside and get some vitamin D and fresh air!". I promise I am truly positive and optimistic by nature, but where my concern lies with moving forward now with a good real estate investment where the numbers make sense on paper, is we do not know where things will be in 30, 60, or 90 days from now. Things may be back to normal in 30 days or this could be the next great depression. We just don't know and that is risk which is unprecedented and hard to quantify for me at this point. Tying up cash in an investment property when my family may need it down the road would be irresponsible of me.
Hope that explains where things have changed for me in the recent weeks on this deal and where my head is at.
Now feel free to rip me for being a "Debbie Downer"! LOL
