224 - Coronavirus Fallout - How To Avoid Taking A Loss

This week we are going to talk about how to avoid taking losses based on recent events.

Stock Investors...Losses come from only two events, the sale of a stock or the permanent closure of the business in which you own stock

If you are invested in companies that have solid histories the stock prices will rebound once consumer confidence is restored.

If you are a buy and hold real estate investor do not sell now!  Instead, wait for markets to rebound.  If cashflow is low maybe you can refinance for a lower rate or if you have paid down equity refinance for a smaller loan balance which will reduce your payments and therefore increase your monthly cashflow.

Another way to increase cashflow is to offer additional ametities if it makes financial sense to do so.  An easy way to to buy a washer and dryer and lease it to the tenants.  Adding a storage building can also be a huge profit additon.

If you are a house flipper, it’s time to get to work finishing your projects and get those properties listed and sold.  DO NOT SELL THEM YOURSELF (unless you are an expert at marketing homes for sale).

Consider reselling the flip property as is before making improvements.  Now is not a good time to speculate because the number of available buyers are decreasing daily with every news report.  People are confused and scared and the confused mind always say no.

If you have uninvested funds sitting in a 401k plan from a former job, transfer that money into a self directed IRA.  The massive benefit of a self directed IRA is that you CONTROL what you are invested in.

If you have no control in what you are invested in you are exposing yourself to loss of money.

A word about buying, everyone is asking me if they should stop buying, my answer is :it depends…

I would buy if the numbers made sense after allowing for 30-40% economic vacancy, meaning non income producing units or period of time without any income from the asset.  Outside of that don’t buy until you can structure a deal that leaves plenty of meat on the bone.