Spencer Platt /Staff/Getty Images
The "BiggerPockets" podcast, hosted by Brandon Turner and David Greene, recently shared a list of tips from real estate leaders on how to survive, and even thrive, during an economic downturn.
Noah Kagan, the founder of Sumo.com and a successful real estate investor, made a guest appearance on the episode and shared five tips on how to make money in real estate during this economic downturn.
"I want this virus to go away, but the uncertainty is where the opportunity is," he said on the podcast.
While uncertain times makes the market difficult to navigate through, Kagan laid out his top tips that current investors, as well as prospective investors, can use to get ahead right now.
1. Be creative when renting your space out.
The spring is when people typically start looking to move. But the coronavirus pandemic worsened in the US as temperatures rose in March, and renter interest has been looking frosty.
RENTCafé reported that rental housing searches on its site dropped by 25% from March 11 to March 17. For the same week a year earlier, traffic had been down just 4%. That same week, overall traffic on RENTCafé was down by 22%, paid advertisements were down by 28%, and 48% fewer renters were searching for apartment utility information.
In a time when apartment searches are down, Kagan suggested getting creative.
"How can you get creative when renting your space out? Can you rent it out for short-term offices, package distribution, video shoots? If people are doing more things online, maybe they can use it for that," he said on the podcast.
2. Make low offers.
As Kagan explained on the podcast, it doesn't cost you anything to make offers, so make low ones.
"Everyone is starting to panic," he said. "The fear hasn't fully gotten to peak, but it'll happen in the next week or two as everything slows down, as everything closes down."
3. Invest in groups.
"If you're thinking about some real estate, and you're a little nervous about it because you're not sure if it's still even overvalued or started getting undervalued, get a group of four, five, 10 people, and use bigger pockets to find a person. And that's a chance to hedge your risk," he explained.
4. Move into cash.
On the podcast, Kagan stressed the importance of being cash-strong in a time like this. In fact, in the midst of the pandemic, Kagan said he's moved to a 70:30 cash-to-equity ratio so he "doesn't have to really worry about the market," and has cash for the things he wants to do.
5. Get your renters to pre-pay you.
"If you have any renters in any of your properties, go to them and say '30% off, pay me for the year,'" Kagan said. "Then you don't have to worry about your rent, you don't have to worry about your place, and I don't have to worry about any of the money coming in or out."
Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please email covidtips@businessinsider.com and tell us your story.
Get the latest coronavirus business & economic impact analysis from Business Insider Intelligence on how COVID-19 is affecting industries.
Next Story
In second consecutive week of decline, forex kitty drops $2.28 bn to $640.33 bn
SBI Life Q4 profit rises 4% to ₹811 crore
IMD predicts severe heatwave conditions over East, South Peninsular India for next five days
COVID lockdown-related school disruptions will continue to worsen students’ exam results into the 2030s: study
India legend Yuvraj Singh named ICC Men's T20 World Cup 2024 ambassador
