Many real estate investors and real estate investing groups (Amin Vali Investing Group) have been hit with huge hurdles during the coronavirus pandemic. Particularly those with investments in retail, food and beverage and tourism. This is to be expected during this time of social distancing. However, this doesn’t mean that they have been fully wiped out or are bankrupt.
Since 2010 the economy has been growing and steadily recovering and we were actually in a boom economy by 2017-2018. This is the natural pattern of the economy, meaning there would have been an economic downtown in 2020-2021 with or without the coronavirus pandemic, the pandemic just made it worse.
What does all of this have to do with real estate investors and their losses? Since the economy was in a growth cycle for nearly a decade, investors have been seeing steady cash flow from commercial rental properties, which include things like hotels and restaurants. Most of their properties, unless it just generally was a bad investment, have been cash-flow positive and covering the mortgage payments and then some (meaning they had been profitable).
With the pandemic hitting the tourism industry and the food and beverage so hard, that is no longer the case. However, this doesn’t mean they are at a huge loss. Investors have 2 options here, many have stopped payments on their loans, and others have the option to just hand over the keys to a property back to the lender without having any further financial responsibilities.
Before you start thinking about how sad it is that the investors have to give up properties they have been working on for years, or that they are so broke they can’t afford to pay their loans, just remember that not all real estate is made alike, and that most investors have money in different kinds of properties.
You also have to remember that real estate, unlike investments in the stock market, can never be valued at $0. There is always value in a piece of property.
Real estate investors are still on the scene and fully in action due to the huge uptick in demand for single-family homes. Investors are busy raising huge amounts of capital in order to shift their focus on housing, especially since the mortgage rates are so incredibly attractive and an investor with access to capital has a great chance at getting one of those coveted, record breaking, low interest loans.
I bet you are wondering why we are telling you about the various successes and “losses” of real estate investors. The purpose is to show you the unlimited potential real estate investing has, depending on the market, on trends, on the location and the type of investment you make. In addition to the potential it can also be a lot less risky compared to other investments, if made wisely.
Even with single family homes, and basically any residential property that is for sale right now, being the “hot ticket” you still have to make well informed decisions (www.aminvali.com) which is what successful investors do.
Civil Engineer, MBA, Real Estate Agent
Cell phone: +1 (949)220-1000
Phone : +1(310)300-0011
Web : www.aminvali.com
E-mail : email@example.com
Realtor in Zutila Inc.