This is the best time for cash buyers to invest in real estate

This is the best time for cash buyers to invest in real estate

The midst of a pandemic might not seem like the best time to invest in anything. In fact, for many, this is a time to take whatever money they can find and to stuff it under the mattress.

Some specialists, however, see opportunity were others see threat. One of those is Clint Coons, a founding partner of Anderson Law Group, an arm of Anderson Legal, Business & Tax Advisors. The company has offices in Washington, Nevada, Wyoming and Utah; Coons is currently the manager of Anderson’s office in Tacoma, Washington.  

“Right now, from an investment standpoint, there are lots of deals to be had,” he says. “Especially if you are a cash buyer.”

Although the stock market has performed well in recent years, it is volatile and unpredictable, Coons says.

“There have been huge swings, which means that, one day you have lots of money and the next day, you have none. But while the value of real estate assets will also recede, there are many more factors in play. When property markets lessen, there are more renters, for example,” he adds.

Coons believes that an excellent way to monetize the current real estate landscape is with “Subject To” investments. “Subject to” investing is a method of purchasing property that leaves the seller’s loan in place. In essence, it allows the buyer to purchase real estate without getting new financing for the property – he or she is buying real estate that is “subject to” the existing debt.

“When times are uncertain, people get scared and are open to things they might not have considered before,” says Coons. “In January, I was negotiating with a seller in New York for a multi-family building, and it was going nowhere. By late February, the seller could not handle the stress. He reached out to me and we negotiated a sale in which I took over the mortgage. I will pay it and keep it in his name for two years, then we will change the terms and complete the transaction.”

He suggests that this is an excellent time for cash buyers to comb the MLS listings for properties that have been sitting on the market for a while.

“For borrowers, things go very slowly. But cash buyers can move things along quickly with “subject to” investing.”

Today, Coons believes that single-family properties are a good investment.

“Multi-family will be more complicated,” he says, citing rent abeyances offered by a number of municipalities and state governments in response to the corona virus. 

Geographically, he suggests that investors stay away from the coasts.

“Especially in California, they are almost socialistic in the way they go after landlords. That is also true in the northeast, and it makes it too risky to invest. Also, real estate values are so inflated in those areas that it’s hard to enter the market in the first place.

“Look to the interior,” he adds. “Texas always offers good opportunities for investing, although pockets like Austin have become less affordable. North Carolina, too, is a very good real estate investment market.”

How will potential real estate investors know that the window of opportunity has closed?

“When people no longer accept your offer,” says Coons.

How To Increase Your Profit Per Deal  {Free Rehab Checklist}

How To Increase Your Profit Per Deal {Free Rehab Checklist}

Below is the standard checklist that we use to make sure we have properly evaluated scope of work in a new renovation project. A quick walkthrough with this list in hand can save you a lot of time and headaches! 

Here's the Checklist:

  • All properties need to have curb appeal
  • Yards clean and any fences kept, fixed, and painted as needed
  • Two tone paint scheme on exterior usually an earth tone base color with white trim
  • All houses must have mailboxes
  • All houses must have visible address numbers
  • Roof must have life left or replaced, we do not put another layer of shingles on, always tear off
  • All roof underlay must be solid
  • Window must be functional and in good shape or replaced and MUST HAVE SCREENS
  • If we are pulling a general building permit and changing out windows, make sure all bedroom windows are changed to meet egress standards
  • Flooring all wet areas such as kitchens, laundry, mud room, bathroom and in many cases dinette should be ceramic tile
  • Carpeting must be FHA quality minimum
  • Electrical – All houses must be wired to code and upgraded to handle the loads including: Meter box, hardwired smoke detectors and in most cases eliminate gas and make house 100% electric, especially the hot water heater
  • Where at all possible, find an area to have laundry facility in house
  • As a rule, ceiling fans in all bedrooms and living areas
  • Interior paint, as a rule, should have walls painted in sand 3 (or equivalent). All trim, kitchens, and baths should be painted in semi or high gloss while and ceiling in a flat white.
  • All homes must have good functioning central HVAC system (Condensers caged) and where possible, air handlers placed in attics
  • All houses need to maximize space to provide for as many bedrooms and bathrooms as is prudent
  • All plumbing needs to be in good working order
  • Bathrooms need to be NICE. We would much rather have tile around the tub than a surround. If the bathroom has only a small window, or no window, the HVAC Company will need to install a Johnny Fan. Baths need to have towel bars, soap dish, and toilet paper dispenser
  • Kitchens need to be NICE, cupboards need to be in good shape or replaced and do not skimp on number of cabinets. Please install a self venting hood fan above stove, if possible, and install a two compartment sink.
  • Make sure that the realtor gets a pest inspection on the property and is treated if needed
  • Make sure when we close on properties they are secured as quickly as possible and stay secured during the rehab process
  • Where it is possible, all egress doors should be made to swing outward and all exterior doors need to be keyed alike and have deadbolts
  • Interior doors must have functioning hardware


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