Timing the market - Next market 'crash'

[Guyoz Golan]

Hey guys, looking for opinions!

We all know time in the market is better than timing the market, but still, how would you go about being prepared for the next market correction? What is your strategy for being ready to such an event, assuming it will happen?

Having some cash aside is nice, but being ready on the investment opportunity is key. 

Given that interest rates will skyrocket and borrowing will be harder, what is the best way to be 'all-in' on the next sale?

[Kyle McCorkel]

@Guyoz Golan This has been discussed probably hundreds of times the past few years on BP. Search “crash” or “bubble” and you will find oodles of threads. But to answer your question my thought is to not wait to get active, but invest using a strategy that will work in any market. Or at least won’t leave you screwed if the economy tanks so quickly that you can’t react. This involves investing using solid criteria and fundamentals, not speculating or relying on appreciation or rent growth, and of course solid cash flow. I personally look to add value as this serves as an equity cushion if values were to fall. But ultimately I keep plenty of cash reserves so that I am never forced to sell prematurely. If values fall temporarily but you don’t sell, you didn’t really lose any money. Hold through the dip, get your cash flow, and keep a healthy reserve and you’ll be fine. As far as being ready, I keep plenty of cash and lines of credit and don’t use all of them on one deal. At this point I might use 1/3 to 1/2 of my earmarked ”RE acquisition and rehab” capital on any one deal. That way if another deal comes along, or if the market tanks and all of a sudden there’s deals everywhere, you can react.

[Russell Brazil]

2 years later, that market crash hasnt materialized yet....oh and uhm, skyrocketing interest rates? Dont think that ones has happened yet either.