When the Next Recession Hits, You’ll Be Happy You Did THIS Beforehand
When will the next recession take place, and how badly will it affect the real estate world?
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Look, if anyone knew this, they’d be on the beach (or wherever else they chose) for good—so don’t let anyone kid you with their predictions or statistics.
When Will the Next Recession Occur?
Literally every radio show or podcast I’m a guest on, they want to know: “What’s the market going to do? When’s the next recession?”
There is no “market.”
There are numerous different markets around the country, all in different phases, at different times, in different areas.
In 2008, I lived through the feeling of what it’s like to do the wrong kinds of deals, sign personally on loans, and fall victim to all the other mistakes for several years leading up to that time. This is especially important for those of you to consider who started post-2008.
I don’t know when, how, or why the next recession is coming—no one does. But I do know this.
There are ways to soften the blow when it happens. I’ve adjusted by buying on terms to avoid making those same mistakes. In my opinion, using terms-only strategies to buy and sell is one of the best places to hang out, operate, and perfect your skills in any market, anywhere.
The Silver Lining of a Market Downturn
When the market slows even a touch, we’ll have an easier time buying—like 2012, ’13, and even into ’14.
Is that a bad thing? No! It’s fantastic.
We have to engage with more people now to get a deal and fish in different ponds, so to speak, but it’s all about the numbers. As long as you know yours (or borrow ours at first), you know how many sellers you’ll be communicating with to secure a deal. As the market slows and you’re buying properly, you’ll buy many more properties and speak with less people to do so.
I’m not going to say I completely look forward to the slowdown in this or any market our associates are operating in, but in many ways, I do. I know how hard they’re working now to put deals together, and I see firsthand in our family team how hard we all work.
So, will we welcome needing to have less seller conversations to secure a deal, experiencing sellers calling and chasing us instead of vice versa, and doing some great long-term deals that will set us up for another decade?
We sure will. And you should, too!
My advice? STOP worrying about the recession. Instead, practice and hone your skills to get deals that are owner financing, lease purchase, or subject to.
And if you choose to go the route of the former two, do so with long terms so you’re not concerned about cycles. I guarantee that you’ll feel like an anchor is no longer weighing you down and financial success is within reach.
Let’s recap: say no to personally signing on loans and say yes to creating long terms and contracts that are set up to protect you. That’s a bit different from signing on loans and using unproven methods or conventional methods. Those, I promise, will keep you up at night when the next recession hits.
Should you have five to 10 rehabs going when the market slows? It certainly wouldn’t be my choice.
Should you be a Realtor when the market slows? I’d rather throw up on my shoes.
Should you be trying to spin wholesale deals at $5,000 to $10,000 each, with your only checks coming when you do another deal? A deal without any future paydays?
You may as well go be a Realtor!
Why not create three paydays (see past posts here on BiggerPockets) for every deal so you can work as hard as you’d like, take time off as you’d like—all while knowing the paydays continue.
I could keep going. But the point is buy on terms, and you’ll set yourself up for a great experience.
Are you convinced the next recession is right around the corner? Why or why not? What will you do and/or are you doing to prepare?
Drop me a line in the comment section below!