Investing in a Post Pandemic
Real estate investing has been extremely competitive over the last few years and despite the continual cap rate compression bringing down investor returns we strongly feel that cashflow investing in recession resistant assets is a prudent strategy over holding more than 20% of your cash on the sidelines. The last decade some say has been the golden age of investing however one has to suspect that we cannot sustain this kind of current growth. A market reversion of leveling off is going to happen we want to protect our capital while growing.
Our goal is to stay in the game, get cashflow, and mitigate our risk by conservative underwriting using data our network of operators, boots on the ground due-diligence, and data that is not available to the public such as CoStar (market rent growth, vacancies, reversion capitalizations rates, etc.).
The Cares Act now allows for a 100k withdrawal from your 401k or TSP penalty free till the end of 2020 and possibly till you file your taxes in 2021. This is the time to get out of frothy paper assets and into real hard assets.
That said overall yields might be dropping. However, we don't undertake a project unless we underwrite it the right way and feel more than comfortable taking on investor capital.