So... evidently we're now in a declining market

[Ed Wood]

[J Scott]

Originally posted by James Sinclair:

When that comes how do real estate investors weather the storm and not wind up declaring bankruptcy?

A few ways:

- Buy right (with built-in equity)

- Leverage right (low LTVs when you borrow or lend)

- Cash flow right (positive cash flow with room to weather vacancies)

- Plan right (have multiple exit strategies should Plan A not succeed)

- Be willing to lose money short-term or hold properties long-term (if you're flipping, you may need to sell quickly for a loss before the market gets worse, or hold long-term until the market improves)

- Don't be greedy if you're a rehabber (don't forgo a decent, quick profit in hopes of a greater profit from waiting for better offers)