When COVID-19 was first declared a pandemic, every investor I know was glued to the real estate sections of the New York Times and Crain’s. The coronavirus seemed to be creating extreme highs and lows in markets across the state. But thankfully things are starting to even out and I’m able to tell many of those who were starting to panic that investing in New York real estate after COVID-19 won’t be as risky as they may fear.
Yes, of course, we are facing some market uncertainty but that’s never held me back. I made it through the ‘08 housing bubble without breaking a sweat. Well, alright, I might’ve gotten a little twitchy a few times. But, I learned some good lessons along the way. And, I’m confident that those lessons will drive the same business growth this time around.
Here’s the deal. As real estate investors, we naturally take on risk. But, there are ways to mitigate that risk when investing in New York real estate—even after COVD-19. Let me share how.
Looking at the New York Real Estate Market After COVID-19 Hit
As cases of the coronavirus were reported here in the Big Apple, we saw many flee from the city centers. The growing concerns about living in dense NYC neighborhoods and the risks of commuting through subways drove people out. Initially, for many, the move was temporary so they booked Airbnbs in more rural areas upstate. But, now, it looks like they are staying. The flexibility to work remotely has led several young and middle-aged professionals to make more permanent moves to spacious homes in the suburbs of Long Island, or northern New Jersey, or even as far as the coastal Westport and Fairfield counties in Connecticut. According to the New York-based FlatRate Moving, there was a 74% jump in the number of moves from New York to Connecticut during March 15-April 28 of this year as compared to the same period a year ago. New Jersey and Long Island witnessed an increase in the number of moves by 38% and 48%, respectively.
The pandemic has led to a ready pool of potential homebuyers preferring move-in ready single-family homes in suburban areas; the key is to get them what they want. That shouldn’t be too much of a problem, though. New York homeowners have been graced by mortgage forbearance from both the feds and the state—but that’s come to an end now that we are months into this pandemic. So, alongside eager buyers is a set of homeowners who are still struggling with layoffs and furloughs and may be looking to sell. They may find it difficult to repay the missed mortgage payments, especially because, in many cases, the lump sum of missed payments is now due in full. We are already seeing the effect: this past August, pre-foreclosures were up 257% from the month prior.
This unique, pandemic-influenced opportunity has led to a real estate market in New York that offers both buyers and sellers. And while you may be asking “What more could I possibly need to continue my real estate investing career?” It turns out: a lot.
To sustain an investing business through uncertain times, you need access to the right tools and resources that will be effective regardless of market tide.
The Tools and Resources You Need For Investing With More Certainty During the Coronavirus
With a second wave of shutdowns and shelter-in-place orders on the horizon in many states across the country, you are most likely to struggle with connecting to potential leads, estimating the valuation of distressed properties, and finding adequate networking opportunities. Here is how each of these key aspects of your real estate investing business may be affected:
A steady stream of leads
Sure, it may seem as if the leads are out there. After all, it looks like distressed homeowners will be plentiful over the coming months. But, why would distressed homeowners answer your call instead of that other investor over in Long Island who probably has deeper pockets? You are going to need to be savvy about your lead generation efforts.
Pounding the pavement or driving for dollars is out right now. Nobody will answer their door in the middle of a pandemic. Direct mailers may be thrown in the trash or redirected to a forwarding address in the Hamptons. Heck, we don’t even know if the postal service is reliable in New York anymore!
But, if you can’t get a hold of anyone directly, one idea you can try is:
Buying at auction
You might want even to look at the Buffalo Tax Foreclosure Auction or the auction in Brooklyn. But, I’m betting they won’t get you very far. Even if the auctions don’t get put on hold again, more likely than not, you’ll end up tangled in red tape and feeling sorry that your investment funds are tied up. Been there, done that—a long time ago—and don’t recommend it. You need to be certain that you’re buying in the same market in which you will be selling.
You’re going to need a better plan to get through this.
Reliable rehab and valuation tools
You need to rely on technology to conduct due diligence of a property while abiding by social distancing guidelines. To estimate the cost of rehabbing and the upside potential of distressed properties, you might be already using valuation tools such as Property Evaluator, HomeSnap, Realtor.com, and Zillow among others. Though each of these apps has some unique features, they are unable to provide an end-to-end comprehensive overview of rehab estimates and after repair value of the properties. Switching between these apps is only going to confuse you more and that is why I don’t recommend them. A streamlined due diligence process with virtual-only tours of the property and an integrated platform to gather data can help you make the right investment decisions.
Mentorship and support
Building your support network in the real estate investors community in New York has gone virtual now. Investing clubs such as REIA NYC are organizing monthly online meetings and coaching clinics to help investors connect. Many investors are actively networking through real estate groups on Facebook as well. However, the once a month online meetings and coaching workshops attended by a mix of investors, mortgage lenders, real estate agents, and attorneys are not enough for you to get mentored on real estate investing. Finding genuine mentors on social media is tricky too with so many self-proclaimed pundits offering short-term real estate coaching sessions and promoting shady investment practices.
Even with the challenges of these uncertain times, surviving and thriving as an investor should not be too difficult if you have a more reliable way to get access to all the tools and resources for real estate investing.
Support and Resources for Investing in New York Real Estate Right Now
Being a part of the nationwide network of independently owned and operated HomeVestors® franchisees during the market shift in 2008 helped me sustain my real estate investing career. The resources and tools provided by our trusted network, helped me stay focussed on my investment goals at that time, and they are also why I continue to feel supported as the COVID-19 pandemic creates yet another shift in the market.
The HomeVestors® comprehensive week-long training course helped me learn the ins and outs of real estate investing. The pro-tips I received were not just limited to the classroom but even in the field as well. The training has helped over 1,100 independently owned and operated franchises since 1996 and has currently moved online, with classes being conducted virtually.
Access to the all-in-one platform, UGVilleSM, helps me streamline the home buying process through proprietary tools such as:
- DealVestors®, a user-friendly listing portal for wholesaling properties
- a one-stop lending portal to connect with some of the most reputable lenders for investors
- a lead conversion tool for end-to-end lead pipeline management
- ValueChekTM, a property analysis and valuation tool
The integrated platform saves me from switching between different tools to get an overview of my investment deals.
The nationally-known and trusted “We Buy Ugly Houses®” ad campaign helps distressed homeowners who need to sell quickly for cash connect with me directly once they have decided to sell their properties. I no longer worry about chasing leads that go nowhere.
Many of the experienced HomeVestors® franchisees who have survived and thrived during similar crises in the past, mentor new franchisees as their Development Agents (DAs). With in-person networking being canceled or postponed, being able to virtually connect with the DAs helps new investors make informed investment decisions.
With these major concerns on real estate investing taken care of, you can also feel confident while investing in New York real estate after COVID-19. To know more about becoming a HomeVestors® franchise, request information today.
Each franchise office is independently owned and operated.