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What to Invest in 2021

Happy long weekends! Last week, I spent several days listening to a lot of real estate podcasts, trying to see what the experts think about real estate investing in 2021. Below is my summary, hope it helps. What characteristics to look for in 2021?

  • Cash flow

Given so much uncertainty in the economy, no one knows for sure how to evaluate properties 5 years from now. Instead, focus on the assets generating positive cash flow so that you are not forced to sell when the market is not working in your favor.

  • Recession-resistant

Look for the assets with negative correlation or no correlation with economy.

  • Tax credit

Expecting higher tax rates, tax credit becomes a hot topic.

  • Distresses asset

Keep an eye on distressed assets. Maybe some interesting opportunities will show up.

What asset classes might have above characteristics?

If you own the following assets, your portfolio might perform well in 2021.

  • Workforce housing/multifamily

  • Self-storage

  • Low income house tax credit

  • Notes

When stimulus package is gone and people stop paying mortgage, notes could be lucrative. Worth keeping an eye on it.

  • Mobile home park

Other considerations

  • Diversification

No one has crystal ball to tell which strategy will make money. The most important thing is to diversify across different asset classes, different strategies, different operators and different states. Don’t put too much money into one bucket. Size your bet by your confidence in that specific strategy.

  • Don’t over-pay

If you want to buy them in 2021, pay attention to your purchase price. A common saying in real estate investing is “you make your money when you buy, not when you sell.”

  • The key is to find top operators specialized in the asset class

A good operator and a bad one can make a huge difference. Make sure you do a thorough due diligence before you invest with operators.

Invest with Confidence.

Yan Yan Sharpe Investor Group

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