Getting ahead of a problem is the best way to perhaps avoid the worst and when we are desperate or not in the best financial place so everyone must act quickly. I remember in 2008 watching many people around me make the same mistakes over and over again and in the end they lost jobs, then homes and sometimes much more. I want my friends and colleagues to be successful and feel good about themselves so there are a few steps each person can take as they begin to feel the hardships of a tough financial time. Below are my 4 ways to win in a real estate during bad times.
- Communicate – Whether you rent, have a mortgage or a private contract the last thing anyone wants is a surprise. If your income has dropped dramatically and you see a rough road ahead be sure you are communicating with those that you pay. Landlords do not want empty apartments or houses and lenders really do not want to foreclose so taking the time to contact them and explain your situation is a must. I would suggest setting a time each week to call them all and give them an update and from my experience as long as you are communicating regularly most of them will do what they can to work with you.
- Set up a time to meet – If you have rental property or hold a mortgage with a buyer its best to start meeting in person to come up with a strategy and practice before things get too far along. We all hope that this blows over but having a plan in place with your tenants or mortgagees will save you a lot of time and work down the road. Set up a time to meet at the property and have a list of important questions to assess each tenants situation. Use your gut to decided how little or much leeway you are going to offer early on but be ready to be flexible and willing to listen. Think back to when you may have struggled and being able to understand and allow your tenants to reach out to you for advice can make a big difference and create some loyalty along the way. You may be able to help them as they are navigating a difficult time and in turn remain great tenants for the long haul.
- Prioritize – We have lots of luxuries and conveniences in our lives and taking some time to decide what you can live without early and what is most important before its too late can be huge. Extra cellular accounts, Starbucks coffee, Memberships and regular payments should all be assessed. This is a great exercise in general but doing it now and cutting what is non essential can make a big difference when you are trying to figure out where to spread your income. Keep this list and if it comes down to it share it with your landlord or lender giving them a sense of responsibility and commitment.
- Start Making Deals – If your income dropped by 50% or you know you are losing your job now is the time to start making deals in regards to real estate. If you have enough equity and can cash out enough to make a difference or take the pressure off put that house on the market at a fair price. If your rent is $1,500 and you can comfortably pay $1,200 now is the time to call your landlord and explain your situation. Not every landlord has flexibility but most do not want vacancies or hold overs so be clear and direct and truthful but start negotiation now. Lastly if your income is dropping and you have a mortgage with no equity start paying attention to programs that can help. Can you refinance? Is your lender offering deferments? Can you give your property back? Have your ear open to each and any option early and talk in detail about them with an advisor. Knowing a way out but not setting yourself up for future problems like a foreclosure or judgement is a great way to educate yourself as things progress.
I am a huge fan of getting in there early and figuring out a solution before it becomes a problem so this advice comes from a sincere heart. The last thing we want to do is put our real estate in jeopardy but we must be vigilant from day one. If you are unable to find additional income or take on a second job there are other options for you to make good decisions during a crises. Hopefully we are through this quickly but in the event we are not your best bet is to begin the communicating and deal making process as soon as you start to sense hard times ahead. As always I am glad to talk or help and you are welcome to contact me anytime at 317-698-2700 to discuss.
Curt has been in the Indianapolis Real Estate business for over 10 years and spent his first years learning all aspects of commercial management and brokerage. He has had great success in managing existing commercial projects and new retail and office developments. Curt specializes in building owner representation and purchases in the Westfield Indiana market as well throughout the Indianapolis Metro area. Curt is passionate about growing the local Westfield community and in his free time volunteers with Westfield Youth Assistance and raising 2 children with his wife Jennifer.