Be fearful when others are greedy and greedy when others are fearful.
Warren Buffett
Business Investor
Buy when there is blood in the street even if the blood is your own.
Baron Rothschild
British Nobleman
1. Distressed Assets
Coronavirus may be a greater opportunity to buy distressed assets than even the great recessions. Investors predict a steeper decline in the wake of the coronavirus pandemic. The shettering of retail properties, hotels, and many other businesses that make up a huge part of the economy has created a crisis where tenants are unable to pay rents, and landlords may soon be unable to pay mortgages resulting in distressed properties on the market.
2. Interest Rates
In 2008, the Federal Reserve cut the federal fund rate. Through quantitative easing, the Fed lowered interest rates and allowed people to refinance in 2008 to help the economic recovery. Dr. Dotzour anticipates the Fed will again lower rates and allow people to refinance again at even lower rates. He believes this will be the key to economic recovery.
3. Long-term Real estate demand
There will be a lot more industrial warehouse space built in the U.S., especially with just-in-time inventory supply challenges caused by having so much dependence on China. There will be more demand in the U.S. as more inventory increases. There will be more positive demand for agricultural farmland. Unimproved land in a runaway inflation scenario is a great investment. Class B and C apartments will see a lot of demand, as will RV Parks.
4. Low Construction Cost
Due to the nationwide pandemic, construction for new projects will slow down. It is a great opportunity for investors to take advantage of lowered construction costs due to the decrease of projects breaking ground giving developers an opportunity to negotiate improved pricing on their projects.
