Real estate investors are uniquely qualified to serve in the community after natural disasters. Whether it be hurricanes, floods, wildfires, earthquakes and everything in between. There are so many helpful things everyone can do to assist those in need. However, in this post you will discover how you as a real estate investor can help provide immediate and lasting assistance for those that have been affected.
The chances are most of us either know someone or have been affected personally by a natural disaster of some sort. I've been through it myself in 2010 when there was a flash flood in Nashville and my own home was flooded. I've also been through several hurricanes with of all my investment real estate in Florida. People typically don't have sympathy for an investment property being destroyed by natural disasters, but still, I know what it feels like both as a homeowner and as an investor. I hope 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. Dealing with Contractors
One of the most important ways you as an investor can help the community is dealing with contractors. This is a very difficult challenge because there are typically very few contractors available. The ones that are available are so busy that they must price their services accordingly. This usually means raising their prices. Some argue that they don't, but with contract work, there's no clear line.
If the natural disaster becomes national headlines, you will get an influx of out of town contractors descending on your area. They're pros and they charge way too much. They do decent work, but the problem is 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 help negotiating with these people because that in and of itself can be very complicated. You know better than them what labor and materials should cost.
In addition to this, you may want to consider sharing your contractors. I know for me personally, I have the greatest contractors on my team and I always keep them busy. However, during these times when there is a need, I've been sharing my contractors. I’ve worked with them, mentored and managed them and they are so good at what they do. They are wonderful people and when I'm sharing that with others that need help, they get the experience of a lifetime.
If you don't have your own contractors, you need to work on locating, negotiating, and managing them, making sure they are doing what they're supposed to do. If you 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 already have a lot of experience working with these folks. If you don't, you may not be of much help because you don't want to have the blind leading the blind.
2. Be a Contractor
Being a contractor is an option if you can't locate one or you don't have anyone to share. For those of you who want to help people but also make money at the same time, this is something to consider. As a real estate investor, we have similar skills to contractors. When we close on a property, we need to fix it up. Even if we don't do the work, we're kind of like a general contractor, estimating how much it's going to cost to renovate and hiring different subs; the plumbers, the electricians, the HVHC, and drywallers.
If you are going to become a contractor, you must do it legally and get the right licensing. So, if you time it right, you can make decent money and do a great job helping those in need because ultimately contractors do serve a critical role after a natural disaster.
Think Twice Before Investing in Damaged Property
It’s important to note that being a real estate investor in a natural disaster area is not always as lucrative as you might think. It's not like you can go run in and grab a bunch of houses up for dirt cheap. Usually, they're damaged, and if the insurance company's not going to pick up the issues then those problems are left for you to deal with. I've had several apprentices over the years who didn’t listen to my advice and learned that lesson the hard way. They purchased property in a flooded out area and then renovated it only to discover they didn't get the right mold certifications and so forth and they ended up losing money.
So, being a contractor can be fruitful economically, it can help people tremendously and it doesn’t have the risks. You're only getting paid for the jobs you do, not betting on the hope that a house is going to sell.
3. Assist with Filing Insurance Claims
You can also help those affected with the filing of insurance claims. You can assist them with the claim itself and work with the adjuster, making sure that they've discovered every flaw. As a real estate investor, you're already walking into people's homes and looking at everything that is wrong with the house. With your trained eye you can help with the insurance process.
Now, it's best that they hire an attorney as well, but it certainly doesn't hurt to get all the help they can get reading the fine print of the insurance policy. Because as you know, insurance companies love to collect premiums, but they don't like to pay out claims. As real estate investors, we read contracts and mortgage details all the time so you may be far better versed than your next-door neighbor. You can be there to help your neighbor get rightfully paid what they're owed.
If you're not well-versed in insurance and you're a real estate investor, shame on you. You really need to get that world dialed in. I have a video on that subject that shares with you some insight. In fact, I preached the gospel of getting flood insurance years ago even in non-flood zone areas.
4. Advise on Whether to Sell or Stay
A lot of people are afraid after a natural disaster and they worry that it's going to happen repeatedly. This fear leads them to just want to sell and get out. The truth is that it may not happen again for a very, very long time. Real estate investors are uniquely qualified to help victims navigate the question of whether to sell or stay. You can also help them find temporary housing, or a place to rent if need be.
Selling their Property:
You know how they can get maximum resale for their property. You can show them how to put a property on the MLS with a flat fee, with the right pictures and description, making sure they get maximum exposure to the marketplace.
I know that sounds counterintuitive for a real estate investor who could get it under contract and wholesale it. However, these people have been affected by a natural disaster completely outside of their control. We want to be there to truly help them in any way they need. They might say they want you to handle the sale. Then of course, you could be the real estate agent listing the property or the wholesaler. But if you show them how you do that for themselves, they can get maximum return on the sale of their property. So, it is going to depend on the situation. Obviously, as a real estate investor, we do want to be economically productive. However, we don't want to do that at the expense of others.
Keeping their Property:
You may also want to convince them just to stay put. I know someone who was affected by the recent hurricanes who was very serious about selling his investment property. He had already put $100,000 into it. He had no hurricane insurance and was just going to lose the money and let it go. I encouraged him to stick to it because the property has tremendous income potential. That island is going to rebound and next time around it's going to be better than ever. You can't give up on real estate. You too may be helping them to overcome their fears that it's going to happen again in the future.
Helping to Find Another Property:
Whether they need to rent or buy, of all people, we are probably better than anyone on finding deals before anybody else. I have a great video on techniques for finding properties. I found my own personal home by following the techniques I share in that video. You can use your skills to help people find another property. Otherwise they're going to Zillow and realtor rentals looking for what’s available. What they will discover is that nothing is available.
After a disaster it seems like nothing is available but that’s not the case. It's just not as easy to find and you as a real estate investor can help them find those opportunities using techniques I share in that video.
Serving the Community
These are just a few of the ways you can assist after something as terrible as a hurricane or flood. Obviously, I sprinkle in a couple of ideas of how you can make some money during those situations. Just remember to do it all in the spirit of helping. All in the spirit of making sure that you are providing win-wins for everybody that has been affected.