Recession is coming?

Question

https://www.marketwatch.com/st...

Hi guys,

I was reading this today and it seems that everybody keeps talking how recession is imminent.

So, those who survived last recession, what do you think you did good and what do you think you did bad? And have you survived the recession or had to file for bankruptcy?

I have an acquaintance who kept leveraging before recession, got crashed during recession and now is not leveraging at all, buys his properties for cash and is doing well.

Here are my thoughts:

When recession hits would be good to have an ability to buy more, since assets will be at discounted prices.

May be it makes sense to decrease the leveraged amounts?

For example, I have a lot of equity in my house I live in, (if I dont refi it it will be paid off in 8 years, and my rental will be paid off in 11 years)

However, if I cash out refinance my house, there will be enough of equity to completely pay off my house.

This will increase my buying power, since I can  collect the rent from my paid off rental and put it towards buying more.

Because in recession you want to buy more...

Am I thinking right?

Will you guys please share what you learned from the last recession? What is your plan for this recession that might come?

Bill B. · Answer

I ignored 12 years of experts saying the crash was coming and kept buying. Then it crashed for almost 2 years and I kept buying. And now they’ve been predicting the next crash for 12 years and I’ve kept buying. Why would you listen to “experts” who don’t invest in real estate?

If you’re really worried about the next crash you should probably sell your house and start renting, your stocks and put the money in to cash or cds, and start living waaay below your means. You’re not ready to invest in real estate or even stocks yet.

99% of all experts that have been predicting the next crash for the last 10 years haven’t sold their investments in real estate or the much more “overvalued” stock market. The other 1% still haven’t bought back in from the last crash because the next one was coming in 2010.

I have yet to hear any one of the big name experts apologize for book after book and interview after interview about hyperinflation, gold going to $10,000/ounce or the stock market crashing 50% for TEN YEARS. Not one. Can you imagine the financial ruin you have suffered if you’ve listened to them? You’ve been destroyed, you may never retire. My dad’s lucky he had a pension as he’s had his entire retirement fund in cash equivalents for 10 years earning about 1%.

Jimmy Watson · Answer

@Bill Brandt

This really struck a chord with me, seeing as I listened to the 'experts' in 2019 and put my TSP into a safe, low interest fund.  I missed out on incredible growth this year and am kicking myself for it.  Should have listened to Buffet and 'set it and forget it'

Account Closed · Answer

Arizona won't participate in the next recession. Too much growth going on.

Mary Jay · Answer

I think the markets are always short on the inventory before a crash...I remember in 2005-2006 there was few inventory. When market is going up people are not selling. Why would they? Their houses are going up...

Then in 2009-2011 there was a lot of inventory, people had to sell...

Mary Jay · Answer

He usually buys when a good company is on sale... He does not buy when its not on sale...I think  it is represented by his saying that you brought up : "be greedy when others are fearful"

Anyway, I myself did not stop though ups and highs of the market,  through my investing career I was buying mostly low but bought 2 properties high last year...My theory is while I have a good paying job and banks lend me, I should buy. Once I retire, probably banks wont lend me with the same eagerness so I may not be able to buy then. I guess, in other words, take the opportunity while it lasts...

What about you? What is your investment pattern? Do you buy in Midwest or all over?

CJ M. · Answer

@Mary Jay

Every few years? He preaches about investing for the long-term, and says "be greedy when others are fearful."

Mary Jay · Answer

Warren Buffett does ...

CJ M. · Answer

@Mary Jay

Except for this recent long run of economic growth, historically on average there's a recession every 4 to 5 years. Let that sink in. Are you going to stop investing every few years?

Mary Jay · Answer

basically they are higher now than pre recession.

So how are you doing it? What was your strategy since the 90th? Are you buying two houses per year? That is what Ive been doing the last couple of years... Before that I would buy one house every couple of years or so...

Bill B. · Answer

@Mary Jay

Most of them are $260-$290k. A couple of outliers. 1 on the low end is 1/2 a townhome by NLV airport pry only worth $240k and a couple pool homes that are probably $350-$400k.

Recession is coming?

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