Seattle area: buy more now or wait for downturn?

[Jack B.]

Most economists are in agreement that we should be heading into another downturn in 2018. This seems to hold true from my own personal observations as well; there does appear to be a downturn every few years almost like clock work.

But that is still more than two years away. Does it make sense to buy a couple more now and deal with the downturn or should I pool cash and wait?

Problem is the cash is losing money sitting. Maybe I should split the difference? I can buy two more with cash on hand, not counting reserves. This would provide me with four rental properties and a primary, all of which cash flow and appreciate well. Of course, the first three I bought during the down turn do the best but these others would still be making me money.

After that though, I could just pool a couple hundred k while I wait and if there is a downturn, I'll buy in again with even more.

[Ryland Taniguchi]

If the Nasdaq market goes through a correction, it should affect the Seattle Real Estate market like in 2000 and not like the big crash in 2008. Housing shortages are for real around here and the real estate market has fuel to go another 10 years. Stock market crashes tend to happen every 4 to 8 years, while real estate crashes tend to happen every 18 years. The exception is if the Dollar were to go into a currency crisis. Possible but unlikely with all of the problems around the world in China, Japan, and Europe. Expect the next big real estate bubble crash to be a global meltdown involving China, Japan and Europe and it will be way worse than 2008. The Great Depression is coming again but I would bet not for another 10 years. 

Cash flow rentals is always a safe bet and we are getting 1%+ rule in the Tacoma area right now.

Economists really don't know anything nor can they agree on anything. The hedge fund traders and wall street insiders - those are the ones that know what's going on because they are influencing the market. George's Soros concept of reflexity in motion.

In expecting a correction (this month till 4 years from now), we're moving out of the slower markets like Kennydale, Des Moines, and White Center and focusing our flips on the hot areas like Ballard, Wallingford, Fremont, Queen Anne, Magnolia, Bellevue, Mercer Island, Redmond, and Kirkland. We're also flipping in the low price areas like Tacoma, Lakewood, Spanaway, etc.

I am looking forward to the next crash because then you can get deals left and right if you work with liquid cash, private money and hard money. A crash is bad news if you rely on appreciation and banks.