Real estate investors are uniquely qualified to serve in the community after natural disasters. There are helpful things that everyone can do to assist those in need. However, in this post I will share how you as a real estate investor can help provide immediate and lasting assistance for those affected.
I’ve had personal
experience with this topic, when in 2010 there was a flash flood in Nashville
and my own home was flooded. I’ve also weathered several hurricanes with of all
my investment real estate in Florida. I know what it feels like both as a
homeowner and as an investor. My hope is that this can be of tremendous
value, not only to you but also to those you help as a result.
4 Ways Real Estate Investors Can Help After Natural Disasters
1. Advise on Whether to Sell or Stay
After a natural disaster people are afraid and they worry that it’s going to happen again and again. This fear makes them want to just sell and get out. However, the reality is that it may not happen again for a very long time. As a real estate investor, you are uniquely qualified to help victims decide whether to sell or stay. You can also assist them in finding a place to rent or temporary housing if need be.
Keeping their Property:
You may want to encourage them just to stay put. I know an investor who had property damaged by recent hurricanes who was serious about selling his property. He already had $100,000 invested in it and unfortunately had neglected to get hurricane insurance. He had decided just to lose the money and let it go. I encouraged him to hold out a bit longer because the property has tremendous income potential. The island that it is on will rebound and it’s going to be better than ever. You too can help them overcome their fears. You can’t give up on real estate.
Selling their Property:
If they decide to sell, you can help them get maximum resale value for their property by showing them how to put a property on the MLS with a flat fee. You can make sure they upload the best pictures and right description, and ensure they get maximum exposure in the marketplace.
This may sound counterintuitive for a real estate investor who would normally try to get it under contract and wholesale it. However, these people are victims of a natural disaster and we want to be there to help them in any way we can. If you show them how you do it for themselves, they can get maximum return on the sale of their property.
Of course, if they want you to handle the sale then you could be the wholesaler or the real estate agent listing the property. So, it will depend on the situation. Certainly, as real estate investors we want to be productive, just not at the expense of others.
Helping to Find Another Property:
Of all people, we are probably better than anyone at finding deals before anyone else to buy or rent. I have a great video on techniques for finding properties. I used the techniques I share on this video to find my own personal home.
You can use your skills as a real estate investor to help people find another property. If not, they will go to Zillow and realtor rentals looking to see what’s available only to discover that nothing is available.
After a natural disaster it seems like nothing is available, however that’s not the case. Properties are available but they are difficult to find and you as a real estate investor can help them find those opportunities using the techniques I share in that video.
2. Dealing with Contractors
One of the most valuable ways you can help the community as an investor is dealing with contractors. This can be challenging because usually there are very few contractors available. The ones that are available are so busy and they price their services accordingly, which usually means raising their prices. Some argue that they don’t, but it’s difficult to know because with contract work there’s no clear line.
You will get an influx of out of town contractors in your area if the natural disaster hits national headlines. These contractors are pros and although they generally do decent work, they overcharge. This is unfortunate because the people who need the most help are the ones who have the least amount of money.
You can help by locating the right contractors for them. They need assistance negotiating with these people because that in and of itself can be stressful and complicated. You have experience and know better than them what materials and labour should cost.
Moreover, you may want to consider sharing your contractors. I have the greatest contractors on my team and I always keep them busy. However, in times when there is a need, I’ve been sharing my contractors. I’ve worked with them, managed and mentored them and they are experts at what they do. They are great people to work with and the people I’m sharing with that need help get the experience of a lifetime.
If you don’t have
your own contractors to share, you need to help with locating, negotiating, and
managing them. For those of you who
don’t have much experience working with contractors, I have a great video
called 7 Things to Never Say to a Contractor you can
watch to learn more. Hopefully, as a real estate investor, you are already
experienced in this area. However, if you don’t you may not be of much help. You
don’t want the blind leading the blind.
3. Be a Contractor
Another option is to be a contractor. For those of you who want to help people but also make money at the same time, this is something to think about. As real estate investors, we have comparable skills to contractors. After we purchase a property, we need to renovate. We may not do the work, but we’re like a general contractor, estimating renovation costs and hiring different subs; the electricians, the HVHC, the plumbers and drywallers.
If you are considering becoming a contractor, you must get the right licensing and do it legally. Contractors do serve a critical role after a natural disaster and if you time it right, you can make decent money and do a great job helping those in need.
Think Twice Before Investing in Damaged Property
It really isn’t as lucrative as you might think being a real estate investor in a natural disaster area. You can’t go in and grab a bunch of houses up for next to nothing. Usually, they have significant damage, and if the insurance company’s not going to deal with them then those problems are left for you to deal with.
I’ve had several apprentices who didn’t take my advice and learned that lesson the hard way. They invested in property in a flooded area, renovated it, and then discovered they didn’t get the right mold certifications. They ended up losing money.
Being a contractor
can be economically fruitful and it can help people tremendously. It also
doesn’t carry with it all the risk. You’re only getting paid for the jobs you
do, not betting on the hope that a house is going to sell.
4. Assist with Filing Insurance Claims
Assisting with filing insurance claims is another way you can help those affected. You can help them with the claim itself, working with the adjuster to make sure that they’ve uncovered all the damage. As a real estate investor, you have a trained eye because you’re already walking into homes and spotting everything that is wrong with the house.
I recommend that they hire an attorney as well, but it doesn’t hurt to get all the help they can reading the fine print of the insurance policy. As real estate investors, we read contracts and mortgage details all the time, so you are likely better versed than your next-door neighbor. As you know, insurance companies love to collect premiums, but they don’t like to pay out claims. You can be there to help your neighbor get paid what they’re rightfully owed.
If you’re not well-versed in insurance and you’re a real estate investor, shame on you. You really need to get it dialed in. I have a video on that subject that gives you some insight. In fact, I was preaching the gospel of getting flood insurance years ago.
Serving the Community
These are just some of the ways you can help as a real estate investor after a natural disaster. I added a couple of ideas on how you can make some money during those situations as well. Just remember to do it all in the spirit of helping, making sure that you are providing win-wins for everybody that has been affected.