David Ebrahimzadeh

How to Invest in Real Estate During the COVID-19 Pandemic

The COVID-19 pandemic has shaken our society to the core. It has affected nearly everyone’s life in some way. From retail stores to hotels, and everything in between, businesses across the country and the world are feeling the economic toll. Around the world, it seems as if no one has been left untouched by this crisis.

Due to the economic impact of the pandemic, many millions of Americans are having a hard time paying their rent, which in turn, leaves landlords in a difficult situation when it comes time to pay the mortgage. The same is true with hotels and retail stores. While most potential investors will see this is a nightmare scenario, there is no need to panic, as there are several ways you can keep yourself afloat during this time.

In this article, we will take a look at some of the ways the pandemic has affected the market and what David Ebrahimzadeh recommends you to do to protect yourself, or even profit from it.

Commercial Real Estate

Many real estate investors focus solely on commercial properties, which have been hit hard by the economic impact of the pandemic. Since mortgages that are typical for residential real estate do not apply to commercial properties, this further complicates the issue.

However, there are several programs in place to help tenants pay their rent. One such program is called the Payroll Protection Program, or PPP. If you find that your salary has shrunken because your tenants cannot pay rent, be sure to enlist the help of the PPP, so you can continue to receive income from the property.

Financing

As far as financing goes, we have been seeing lenders become pickier as to who they are dealing with. Their criteria have tightened greatly, and that should be no surprise. Both qualified and non-qualified lending has taken a big hit. This could be an issue for real estate investors wishing to do things such as renovations.

On the other hand, you would be glad to know that rates are relatively low. This would be a great time to refinance your property and take advantage of these lower rates. If you plan to acquire a new property, a great idea would be to borrow from the equity of the properties you already own and then obtain new properties at these low rates.

Single Family Residential Properties

Due to the high levels of unemployment seen as of late, owners of residential properties are right to be concerned. Even with the CARES act, which puts a 120-day freeze on evictions for renters living in properties which receive federal funds, The owners of these properties are still worried, and rightfully so.

Since many tenants cannot pay their rent, the government has stepped in and now guarantees specific loans, with the possibility of a 360-day forbearance, so long as the tenants’ income has been affected by the pandemic. If you own a residential property, you should find out if your mortgage is backed by government agencies such as FannieMae or FreddieMac. If your mortgages are not backed by these entities, there are still other options available to you, which your loan servicer will be able to assist you with.

Multi-Family Housing Properties

Apartment complexes and other multi-family housing properties are also an issue of concern during the economic fallout of the pandemic. Tenants who have faced pay cuts or have even lost their jobs will sooner or later become a financial drain on the owner of the property. Since buildings with more than four units cannot be financed through a mortgage, FreddieMac or FannieMae will be of no help here.

If you own such a property, be sure to stay in close contact with your tenants and make them aware of the relief programs the government is providing. It is up to them to take advantage of these relief programs, which will in turn, potentially save you from financial ruin, as far as that specific property is concerned. Communication is needed at all times. Make sure that you compassionately approach your tenants and do your best to create a working relationship with them, which will benefit everyone.

This pandemic and the economic disaster that has accompanied it is far from ideal. However, do not be discouraged. David Ebrahimzadeh recommends that you do your best to research all of the government assistance programs available to either you or your tenants. Such programs can make the difference between you holding onto your property, or letting it go