Breaking COVID19 News
Up next , the Corona Virus ; although the pandemic has substantially hurt the economy regarding sales / profits , the underlying economic picture was strong prior to the virus , and there is compelling reason to think that it can be strong again after restrictions are lifted , as the various restrictions were created by governments rather than economic forces and can be undone when governments decide to disseminate them ; especially if a lockdown is only for a few months rather than years . So far , real estate has not shown signs of collapsing . Sellers are unwilling to unload their properties at depressed prices .
Buyers still exist . Transactions are still being completed even if they are hampered by social distancing and more people working remotely . However , the banks are doing what they always seem to do during unsettling times ; they pull back . They have less manpower via closed offices and less employees able to accomplish what is takes to make loans . This , again , gives the private lender the ability to provide the oft needed financing for borrowers . Interest rates have gone up for these
borrowers even when the Fed has reduced interest rates . Less capital in the markets to lend means the demand for capital will raise the price for that capital . As long as the conventional lenders have basically stepped aside from real estate lending , the private lender should have the same opportunities that existed during the S & L Crises , the Dot Bomb Crisis , and the Great Recession .
Of course , nobody knows how long the virus will be around and how long governments will intervene rather than let the virus run its course on its own . A long , protracted shutdown would severely affect every economic situation , but it always seems that the best time to invest / lend on real estate is during the darkest hour . The old adage of buy low , sell high seems to work better than buy high and hope it goes higher . Even if we do not know how long an economic decline lasts , conservative underwriting can help weather tumultuous times . As many investors claim , the time you make money is when you buy , not when you sell .
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EDWARD BROWN
Edward Brown currently hosts two radio shows , The Best of Investing and Sports Econ 101 . He is also in the Investor Relations department for Pacific Private Money , a private real estate lending company . Edward has published many articles in various financial magazines as well as been an expert on CNN , in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns .
Edward Brown , Host The Best of Investing on KDOW AM1220 on Saturdays at noon 21 Pepper Way San Rafael , CA 94901 4152990330
ebrown1111 @ aol . com