The coronavirus pandemic turned the world upside down in a matter of months. Things as we knew it changed almost overnight. Businesses closed, and people were told to stay home unless they were essential workers. We must socially distance and wear face masks in public.
From small mom and pop operations to corporations, businesses of all sizes have felt the effects of COVID 19. Even the real estate market has felt the effects of COVID-19, most notably with commercial investment property opportunities.
Before COVID-19, the commercial real estate market was booming, thanks to the growing economy. Now, things have changed and this market has cooled down. Business closures have translated into businesses not being able to afford lease payments. Selling commercial property has also slowed down, with some investors having to take a loss just to offload their properties.
What Types of Real Estate Are Still Good Investments?
Fortunately, COVID-19 real estate residential investment property markets are still booming. People need homes and places to live. Some of the investment properties to consider include:
- Fix and Flip Rehab Single-Family Homes: This type of investment property can be a good choice when you purchase a rehab home and fix it up to resell it. Most hard money loans for investment property give you up to two years to flip the home, so that should give you plenty of time to find a buyer.
- New Apartment and Condo Construction: New construction multifamily properties are also doing well as investments. Depending on the size of the project, it can take a year or two before homes are ready for move-in. This should be sufficient time to find renters or buyers that have steady incomes to make monthly payments.
- Fix and Flip Condos: Individual condos in existing communities that need rehab work are another type of real estate you could invest in. You can also have up to two years before the investment loan is due to give you time to find a suitable buyer.
If you have your heart set on commercial real estate investments, there are a few different opportunities that have not felt the full effects of COVID-19. For example, fix and flip warehouses and new warehouse construction are doing well in many markets.
This is largely due to the volume of goods still being moved and transported across the country by the trucking industry. Manufacturers still need warehouses to use as distribution centers for housing, storing, and transferring goods from a centralized warehouse to retailers and direct-to-home shipping.
How Do I Know if My Investment Will Be a Good Decision?
The key to making wise investment decisions during COVID-19 is understanding the property you want to buy. Take the time to do some research to see how fast the type of property you want to invest in is selling.
You want to look at historical data from about mid-March through now to get a good idea of the average number of days it is taking to sell the types of properties you are considering. Keep an eye on these to spot changes that could indicate difficulties selling the property later.
You also need to be aware of potential delays in various processes like the acceptance of purchase offers, closing, etc. Some of these processes are taking a little longer to complete than pre-COVID.
Most importantly, make sure you line up your lending, so you do not have to wait for funding. The last thing you want is to find the perfect investment property, only to lose out on the sale because you couldn’t get funding quickly enough.
For easy hard money loans for investment property fix and flip homes, new construction, and other real estate investment direct lender loans, please feel free to contact Sunset Equity at 866-986-0192 today!
Benjamin Donel, CEO