THE RECESSION IS HERE!!!

Buying & Selling Real Estate
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THE RECESSION IS HERE!!!

Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes

Quick! Sell me your house before it’s too late! :)

Are you optimistic or pessimistic about this upcoming recession?

I’m optimistic about these next few years, I hope there is a massive price correction. I’m running around trying to gather as much capital together as possible to buy bigger deals. Am I the only one seeing this silver lining?

If I remember correctly - the best time to invest is when everyone is selling. But what do I know I’m just a millennial.

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Mark Fries
Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
7y

@Nick Rutkowski

Economic conditions never enter my mind...I CRUSHED it during the recession...and I continue to CRUSH it today.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Ryan K.:

    @Jay Hinrichs I agree with your thoughts. Stabilization or a small correction is a likely scenario (or worst case). We dont have the overbuilding like these was prior to 2008, the new construction numbers and new permit numbers prove that fact. And demand in most places it through the roof right now, and available inventory fairly low. If property prices fall even a moderate amount, say 10-15%, both investors and owner occupants (currently waiting on the side lines) will likely scoop things up and like you said "Stabilize" the market. Heck look at the recent movement in the stock market, it was a small trough in late 2018, and like you said the investors came in and bought, stabilizing things and bringing it back quickly. Just too much money on the side lines waiting for a small discount at this point.

    Well I hope so.  I could not survive another 08 meltdown that one about killed me..  

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  • Kyler Cook
    Rental Property Investor · Kalamazoo, MI · Member since 2018 · 117 posts · 235 votes
    7y

    @Nick Rutkowski

    In some places the recession never left. In some places they won’t even feel the next recession. Be more specific with your doomsday culling, Towncrier.

    2Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    7y

    I can't speak to residential. I do commercial. I can tell you where I live houses still sell very quickly but it is an affluent area.

    I do not see any recession. I am busier than I have ever been in 15 years of commercial real estate. People have tons of capital to put to work. 

    The cycles do not affect my clients as much because they typically have 8 to 9 figures of wealth and lot's of cash flow already so they are almost like their own bank. They have lenders that will lend to them in any cycle. On the down stroke it's the newer investors where some lenders start cutting off the water faucet of capital available for loans. Last thing they want is a newer investor buying while values are falling so capital tends to dry up for loans.  

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  • Kent Nielson
    Contractor · Vancouver, WA · Member since 2019 · 113 posts · 62 votes
    7y

    Curious about the earlier statement about rents and vacancies dropping during the recession....I would have guesses the opposite since a lot of people lost their homes and downsized. Could they just not afford it so landlords were forced to lower prices?

    1Reply
  • Syed H.
    Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
    7y
    Originally posted by @Kent Nielson:

    Curious about the earlier statement about rents and vacancies dropping during the recession....I would have guesses the opposite since a lot of people lost their homes and downsized. Could they just not afford it so landlords were forced to lower prices?

    Depends all on your area. If your area lost jobs, lost employers, you got hit with higher vacancy and lower rents. Also it was difficult if you had a commercial loan come due. You couldn’t refi. 

    0Reply
  • Corinne Squires
    Member since 2018 · 3 posts · 1 vote
    7y

    I'm a real estate agent and in my market we are hurting for inventory big time. It's a sellers market for sure, but there are still good deals if you know where to look.

    1Reply
  • Kent Nielson
    Contractor · Vancouver, WA · Member since 2019 · 113 posts · 62 votes
    7y
    Originally posted by @Syed H.:
    Originally posted by @Kent Nielson:

    Curious about the earlier statement about rents and vacancies dropping during the recession....I would have guesses the opposite since a lot of people lost their homes and downsized. Could they just not afford it so landlords were forced to lower prices?

    Depends all on your area. If your area lost jobs, lost employers, you got hit with higher vacancy and lower rents. Also it was difficult if you had a commercial loan come due. You couldn’t refi. 

    Thanks Syed. Where did all the people go? Move out of state? Into relatives homes? cardboard boxes??

    0Reply
  • Rich Thomas
    Investor · Salem, MA · Member since 2016 · 124 posts · 62 votes
    7y

    @Mark Fries BOOM! 24/7 crushing conditions!

    0Reply
  • Fernando Lama
    Rental Property Investor · Newark, NJ · Member since 2018 · 13 posts · 5 votes
    7y

    @Nick Rutkowski good post. you have a great attitude and outlook. I too am stacking reinvesting money w/ the aspirations of going shopping later, when everything will b deeply discounted. However there is a difference between a market correction and a full blown recession .

    2Reply
  • Bryan Beal
    Rental Property Investor · Greenville, SC · Member since 2019 · 115 posts · 264 votes
    7y

    @Nick Rutkowski as far as I’m concerned, the larger, over-inflated markets (i.e. LA, SF) will be hit most by a recession or correction. The small to mid-size markets won’t be affected much.

    1Reply
  • Jack Edgar jr
    Rental Property Investor · Chicago, IL · Member since 2015 · 98 posts · 48 votes
    7y

    @Frank Wong

    Stress tests are real. I was an RE analyst in 2007-2008 and a d saw first hand how quickly banks can turn on their borrowers. The developer I worked for had several properties fall into default based on the annual compliance reviews which could include maintaining DCR, rental occupancy levels, reserves, including auditing your own balance sheets, as these are just a few areas they hit on (obviously depending on loan) assuming apts. Anyway, not having these in check can lead to the lender calling the loan due. So read the fine print if things start going sideways. Cause you don't want have to come up with a ton of money at the wrong time.

    0Reply
  • Roger Hefner
    Yuma, AZ · Member since 2015 · 140 posts · 137 votes
    7y

    @Nick Rutkowski. I guess I better just keep collecting rent from my zero leveraged properties. Let me know when it's over. HUD is good to me..

    2Reply
  • Mark Fries
    Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
    7y

    @Rich Thomas

    Oh yeah!!

    0Reply
  • William Glass
    Investor · New York City Fort Myers FL, Birmingham AL · Member since 2016 · 105 posts · 52 votes
    7y

    @Nick Rutkowski you must be on Robert Kiyosaki's email list. He sends a lot of "impending recession" and "recession is here" emails recently. 

    As a fellow millennial, I wasn't at a point where I was actively investing leading up to and immediately following the last recession. I saw the mania first hand though through my family and family's friends and how the real estate market crushed them because the focus wasn't cash flow. I like to the think that I'll be smart enough to go on a buying spree and be ready when the market tanks, but let's be honest it is easier said than done to go against the grain. 

    How do you prepare yourself mentally (not monetarily) to buy in the midst of a correction or recession?

    0Reply
  • William Glass
    Investor · New York City Fort Myers FL, Birmingham AL · Member since 2016 · 105 posts · 52 votes
    7y

    I'd add prepare yourself both mentally and emotionally. I think most everyone on BP gets the logical numbers part of investing despite a correction or recession.

    0Reply
  • Joseph ODonovanPro Member
    Property Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes
    7y

    @Nick Rutkowski Slow down folks, new jobs added numbers out today, labor market continues to be strong.

    https://www.nytimes.com/2019/04/05/business/jobs-report-unemployment-march.html

    1Reply
  • Brian Ploszay
    Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    7y

    In 2007, the real estate market started to slow.  Experts, more often than not, were calling for a "soft landing."  Nothing of the sort happened.

    Any recession definitely slows down real estate.  But nothing destroys values when banks stop lending for a few years.  And tons of bad mortgages were sitting out there.

    The last two recessions started with the popping of an asset bubble.  The first was the dot.com. The last was the housing bubble.  Asset prices are high right now (multi-family).   But keep in mind that one of the reasons was low interest rates.  Real estate professionals should watch rates all the time.

    Today's potential bubbles are corporate debt, student debt and possibly auto loans.  I don't follow any of this.  But it may be unlikely that real estate drives the recession like last time.  

    0Reply
  • Nick Rutkowski
    OP
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Alex Manwell

    Chicken little? I like chicken BBQed with a side of market correction. I’m merely picking on those who are panicking about it. I live in Upstate NY the most stable market since corn. No recession or market correction is heading towards me.

    2Reply
  • Nick Rutkowski
    OP
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Lamont Marable

    Hook, line, and sinker. Caught another one. You RE guys are easier to get to click on posts than catching fish in a barrel. Too easy.

    1Reply
  • Nick Rutkowski
    OP
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Kyler Cook

    Doomsday culling? Seems like someone is a little offended. It’s okay man, I was trying to poke fun at the “Doomsday cullers” Re-read the OP.

    0Reply
  • Nick Rutkowski
    OP
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Fernando Lama

    Thank you Fernando, I try to stay optimistic.

    1Reply
  • Nick Rutkowski
    OP
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @William Glass

    I don’t waste my time following gurus, including that dude. I get my information about this from my job (real estate agent), my clients (panicked investors), and what I see on BP.

    If you read my post I’m busy finding as much money as I can for bigger deals. You’re mentality and monetary issues can be resolved if you put down the self help books and quit waiting.

    0Reply
  • Nick Rutkowski
    OP
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Joseph ODonovan

    Boom, there is a silver lining in everything. I’m a millennial, there is no slowing down ha. Can I send this information to those who are freaking out about the “market correction”?

    1Reply
  • Kyler Cook
    Rental Property Investor · Kalamazoo, MI · Member since 2018 · 117 posts · 235 votes
    7y

    @Nick Rutkowski

    Offended? I was poking fun at the ridiculous clickbait title, but it seems like someone is sensitive and doesn’t understand humor :)

    See how that works?

    My comment stands. Simple yelling the end is nigh doesn’t make sense in real estate. I’m more interested in talking about specific markets that we can see exposed personally.

    0Reply
  • Nick Rutkowski
    OP
    Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
    7y

    @Kyler Cook

    You’re right, I make a better fisherman than a soap box preacher. Next time, I’ll reevaluate what you say to make sure its taken in context. Anyways, what are you seeing in your specific market?

    0Reply
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