Recently received a question from an investor with just a couple deals under their belt, and they asked me a couple of great questions I wanted to share:
What do you have planned for 2020? Also, how do you plan for a downturn?
I'm finishing up my first (couple deals) in the next 60 days and was hoping to grow my business in 2020. But I'm also getting nervous about a downturn. Mostly because of inexperience. I'm under 30 and haven't dealt with a recession as yet so I'm anxious to see how it plays out.
Good questions. Here's what I have planned: I'll be selling a few units going into a rising market early next year. I'm thinking up until the election we'll be pretty stable. After that, all bets are off.
There are only 2 ways to deal with a downturn: keep your powder dry and when you see blood in the streets, buy! The other way is to make sure you have good cash-flowing properties with enough equity in them to be able to weather the storm.
Or a combination of the two strategies above, which is what I plan on doing.
Keep in mind: the average investor who is now all-out 'in it', sinking everything they have into chasing this market will be the first ones to cut, run and cry about how real estate sucks when the market turns and they get their fingers burned.
To me, it's better to take some profit when you can, even if by staying in you could have gotten more, rather than staying until too late and losing everything you think you 'made.'
In 30+ years we have never had to worry about a pull back or recession. Stay focused, frugal & stay within the median price property or mkt rent arena. Then again maybe your referring to this elephant in the room :))