We are currently experiencing an unprecedented global crisis. The coronavirus, also known as Covid-19, is disrupting our lives and causing the global economy to collapse. We must all pay tribute to the medical personnel who do extraordinary work every day.
It’s sad to say but our club has never been so busy. You have understood that this is the right time to invest ! It’s a good thing that the team members work in the office at home and some of us are on short-time work. This allows us to answer and correct the exercises in our training modules. Training courses to buy your first car parks and boost your rental yields have never seen such activity before. What a pleasure it is to see the achievement badges light up in our member tracking board. Congratulations to the motivated members, you will be a hit when the crisis is over !
📑 Table of contents
How to prepare well for the end of the crisis ?
You know the saying : one man’s misfortune makes another man happy. This is a very difficult phrase to hear at this time of global tragedy as the pandemic unfolds. Life is cruel and the reality of things will quickly take over, and every financial crisis brings its share of good deals. To write this article, we are calling on 5 members representing a wide range of assets. Each member brings his or her vision on how to get out of the crisis and adapts the strategy.
Antoine is a young investor starting out in the parking niche. Having no property, he is looking to increase his rental income while limiting the risks. Tayler is the club’s lawyer, owner of a dozen garages, he brings a clear vision of the crisis. Christopher, in charge of the club, owns more than forty pitches. He is the club’s diversification expert, with amodiation, parking spaces, garages and two warehouses. Oliver owns about sixty parking spaces. He is the expert in the big city’s, he always gives good advice to help others succeed by controlling risks. Finally, Mister X, owner of more than 300 parking spaces, this big owner is an investor who built his fortune by buying, improving and selling garage lots.
Focusing on a real estate niche
Real estate remains the preferred investment, did you know that there are several niches to exploit ? We present you a group that allows you to exchange on the different real estate niches. I invite you to join our group without delay. In this period of confinement, you won’t have a better opportunity to find a niche that suits you. There are a multitude of niches and the goal of our club is to stay focused on the niche of car parks, garages, boxes and warehouses. If you have been following our club for several years, there is no need to go through the joys of parking real estate again. If not, I invite you to read this article to understand all the advantages offered by the parking niche.
Take the time to train
Everyone agrees on the importance of using the time available to build up competence and establish a good investment strategy. That’s exactly what Antoine does (first-time active search user), he assimilates all the hidden content of our platform and validates the high-speed progress badges. We are sure that he is going to realize a great project after the crisis !
All members of our club will tell you, all the online training or books won’t do you much good. Indeed, a training gives you information at a specific moment, but nobody will accompany you on a daily basis. This is why we have created an interactive training system based on the exchange between investors. You learn the theoretical bases on our exchange platform and then you have access to all the tools to succeed in your projects. I invite you to test your investor profile free of charge, you will receive advice adapted to your situation.
💡 Did you know that : One study shows that annuitants view passive income generation as the result of action.
Joining a group of investors is a great way to find motivation and be the driving force behind your success !
You are already a member of the club and your projects are not taking off: how many progress badges are validated ? 100 % of the members who have validated all the badges on the new dashboard are owners and generate good passive income. This dashboard is the result of 8 years of exchanges and support for first-time members. Start with it !
Anticipating and monitoring price declines
The current economic crisis is already impacting the real estate market. All real estate transactions have come to a standstill. Professionals in the sector can no longer work, several banks no longer make loan offers and notaries no longer validate deeds. Real estate agencies are at a standstill.
You need to monitor the real estate market, follow the price trends in the cities or neighbourhoods you have targeted. Use our simulators to calculate a potential profitability or do a market study. Good deals will appear in the coming months, you must position yourself and be ready.
How do you make money coming out of the crisis ?
For Oliver (owner of around 60 car parks), the crisis is an opportunity to take stock of these assets in order to readjust his strategy. It is necessary to review each asset to determine its valuation (possible impact of the crisis), its liquidity, its quality. Then, the global vision will allow us to prepare adjustments via sale / purchase to ensure a good diversity of the whole. At the same time, it is possible to establish several opportunistic scenarios and to prepare an active post-crisis watch (identification of strong impacts on real estate in certain countries and offshore purchases, for example, or the possibility of gradually building up an equity portfolio in the event of a sharp market downturn).
We’re going to talk to you about the stock market and real estate. Do you know the connection between these two sectors ? The stock market brings in capital, real estate brings in income and wealth. These two investment sectors bring security and serenity. When you have money saved, you are serene and happier in life.
Investing in the stock market
The stock market has been slumping since the beginning of the crisis, with the Dow Jones returning to its lowest level since 2013. The German DAX, the British FTSE, the French CAC 40 follow the same trend. There is no better time to invest in the stock market, that’s for sure. Even though we are focused on the parking niche, we are still primarily investors. As we said earlier, the stock market is a way to bring in capital. Tayler, Oliver and Christopher are taking advantage of this period to review their stock market strategy and give you a few pointers.
💡 Did you know that : Bernard ARNAULT, CEO of the LVMH group has further increased his wealth since the beginning of the financial crisis thanks to the stock markets.
The stock market brings capital. Capital allows investment in real estate and the creation of recurring income.
What stock market values should I bet on ?
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Investing in a real estate SCPIs
Concerning SCPIs, Oliver (owner of about sixty car parks) prefers to come out of the crisis with cash available for reinvestment. For him, you have to avoid anything that is not listed, such as SCPIs, private equity, etc… Because current valuations do not always take into account the impact of the crisis! You have to wait for the recovery and allow several months to pass before buying SCPI units.
Investing in car parks in amodiation
Parking amodiation is a legal contract by which a company assigns a parking space to an investor for a contractual period. For Christopher (owner of about 40 parking spaces), this is not the right time to buy car parks or garages in amodiation. You have to wait at least 4 months after the end of the crisis. The sales prices on this type of product are too high and the sellers have frozen the prices during the crisis.
Since the initial down payment is lost at the end of the contract period, forget about leases ending at less than 40 years. This type of product is not a safe haven but is intended for opportunists. It is possible to make some very good deals in the coming months. Take advantage of the crisis to make opportunistic offers to sellers. Without sales volume, some sellers will accept the transactions. After the crisis, the drop in prices will reduce the number of properties on the market, you will have to identify good deals.
💡 Did you know that : Our club has issued an alert regarding the increase in scams on airport car parks sold in amodiation. Click here to find out more about the ongoing scams.
Investing in a lot of garages
Tayler (owner of about ten garages) and Mr X (owner of more than 300 pitches) are unanimous, we have to bet everything on the garage lots. The end of the crisis will redistribute property titles and generate good deals. Opt for lots outside co-ownership to reduce the charges and release you from a trustee of co-ownership. Opt for lots outside the home to make storage and furniture storage is the guarantee of a high occupancy rate. Don’t forget that the sellers who have difficulties to sell their garage lots will try to put them forward with the end of the crisis… Remain vigilant and apply the methods of the club to check the quality and true profitability of a property before investing!
Investing in commercial and artisanal real estate
Christopher (owner of about 40 sites) and Mr X (owner of more than 300 sites) do not exclude business premises : professional offices, craft workshops, commercial premises. Both of them are already owners and landlords of warehouses or premises, and they know that this type of product is profitable as long as you buy at the right price. Good warehouses are rare and can be a real financial drain for the uninitiated. In general the premises sell for a fair price but the end of the crisis can bring some good opportunities.
How to find good deals after the crisis ?
This is the most important chapter of our article. You will understand that we are not going to reveal to all our readers the strategies that our experienced members use.
💡 Did you know that : A study launched during the previous crisis shows that 88 % of investors will not buy real estate in the 10 months following the crisis.
Are you one of the 12 % who will invest or will you watch others get rich ?
For once the competition is going to be weak, it would be a shame not to take advantage of our club membership offer at only $ 4 incl. VAT per month. This content is reserved for members of the investor club 🔐. Feel free to join our community to benefit from the advice of experienced investors. Club members, please log in to view this content.
Good news and bad news
Good news never comes alone. The bad news is the announced increase in credit rates. The good news is that notary fees will fall by an average of 1.9 % as of May 2020.
Notary fees : possible rebate
New : notaries will be able to offer discounts on part of their fees on a voluntary basis if they wish. Negociate a discounts above $ 100,000 of transaction. For example, for a lot of garages sold for $ 150,000 : the discount will only affect the fees applied to the higher base of $ 50,000. That’s always a good deal !
The best argument for negotiating the discount : a lot of garages gives the notary less work. This is evidenced by the fact that the fees are capped for small transactions.
Credit rates on the rise
That’s the bad news ! The crisis has halted the surge in home loans. Even if they remain attractive, rates are starting to rise slightly : between +0.2 % and +0.5 % on average, depending on the borrower’s profile. Over 10 years, rates average around 1 %, 1.1 % over 15 years, between 1.3 % and 1.4 % over 20 years and 1.6 % over 25 years.
That’s why some club investors are recommending that you take out cash to invest in a way to get out of the crisis. This argument can be put forward to sellers by telling them that rates are rising but let’s be honest, the credit rate is still low enough to invest.
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