Recession is coming?

18 Replies

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?

Originally posted by @Mary Jay :

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?


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

Originally posted by @Account Closed :
Originally posted by @Mary Jay:

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?


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

Thank you, Mike.
You have gone through the last recession.
What worked for you? How did you make it through?

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%. 

@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'

@Jimmy Watson

I totally understand. Even when I found out about my dad’s state retirement being in “cash” I never tried to talk him to putting it back in to the market after those 10 years for fear of how we would both feel if the market “crashed” 10-20% the next day/week/month. 

Even if we see a recessionary period, I dont expect to see big change in real estate, many markets are super heated, BUT a recession will probably only moderate the market. I Flipped and sold foreclosures all the way through the last downturn, the difference this time is lending is not predatory not everyone has ARMs. and more people have a lot of equity. Currently most markets in the US is short on Inventory, so lets say we see a market slowdown, so days on market increase and maybe a slight downturn in prices, and I mean slight if any, the reason prices dipped last recession is because the sellers (banks) could discount to get properties sold, setting lower comps. and many homes were abandoned and blighted. now there are not many blighted homes compared to then, yea in a down turn a few people will lose there homes, but we will probably never see in our lifetime another 5.5% foreclosure rate like at the worst point of the great recession. I hate to burst your bubble Newbies, that ship has sailed, get comfortable with making deals work today, or wait till your old and its too late for you.

Originally posted by @Bill Brandt :

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%. 

 So you were buying at 200-300k per house and then in recession 70-100k per house ?

What happened to the 200-300k houses during recession? Did u lose any of them ? 

I Guess what I’m trying to ask is how were u able to sustain non paid rents because I know market crashed really bad in Nevada, u probably had a lot of tenants who could not pay and you have on your hands 200 K -300k houses

Originally posted by @Jimmy Watson :

@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'

I’ve made a mistake too. I took out 20 k out of my 401k when trump was elected at 1600 $ S&p and it grew to 3k in a year or so...

I would of had 40k now  

@Mary Jay

Pre recession my target property was $180-$200k. During the recession I bought, and regretfully, refused to buy houses mostly in the $100-$110k range. 

House renters in Las Vegas, in my experience, never stopped paying rents. I was increasing rents the entire time. I’ve heard that apartments didn’t do well but I had zero evictions and VERY low vacancy from 1998 to 2019 when I had my first eviction. People who lost their house, and their families, could pretend nothing much had changed if they just lived in another house. But if you move your family from a house to an apartment it’s pretty obvious. 

I did have one house (my first) I bought in 98 for $180k hit $500k at the peak and then drop back to about $220K and now it’s back to around $500k. It didn’t matter what it was worth as I’ve collected over $500k in rent from it.  It’s a horrible rental, way too big, 3200sf 5 bedroom. But, back in 98 it was only $10k more than a 2400sf 4 bedroom. And like the BOGO offers, I couldn’t pass up the “value”. 

Originally posted by @Bill Brandt :

@Mary Jay

Pre recession my target property was $180-$200k. During the recession I bought, and regretfully, refused to buy houses mostly in the $100-$110k range. 

House renters in Las Vegas, in my experience, never stopped paying rents. I was increasing rents the entire time. I’ve heard that apartments didn’t do well but I had zero evictions and VERY low vacancy from 1998 to 2019 when I had my first eviction. People who lost their house, and their families, could pretend nothing much had changed if they just lived in another house. But if you move your family from a house to an apartment it’s pretty obvious. 

I did have one house (my first) I bought in 98 for $180k hit $500k at the peak and then drop back to about $220K and now it’s back to around $500k. It didn’t matter what it was worth as I’ve collected over $500k in rent from it.  It’s a horrible rental, way too big, 3200sf 5 bedroom. But, back in 98 it was only $10k more than a 2400sf 4 bedroom. And like the BOGO offers, I couldn’t pass up the “value”. 

 Very interesting ... thank u for sharing your experience... what are those houses now cost that were 100k during last recession?

Originally posted by @Bill Brandt :

@Mary Jay

Pre recession my target property was $180-$200k. During the recession I bought, and regretfully, refused to buy houses mostly in the $100-$110k range. 

House renters in Las Vegas, in my experience, never stopped paying rents. I was increasing rents the entire time. I’ve heard that apartments didn’t do well but I had zero evictions and VERY low vacancy from 1998 to 2019 when I had my first eviction. People who lost their house, and their families, could pretend nothing much had changed if they just lived in another house. But if you move your family from a house to an apartment it’s pretty obvious. 

I did have one house (my first) I bought in 98 for $180k hit $500k at the peak and then drop back to about $220K and now it’s back to around $500k. It didn’t matter what it was worth as I’ve collected over $500k in rent from it.  It’s a horrible rental, way too big, 3200sf 5 bedroom. But, back in 98 it was only $10k more than a 2400sf 4 bedroom. And like the BOGO offers, I couldn’t pass up the “value”. 

My house was 400 K pre recession  then dropped to  150 k, I bought it in 2012 for 230, now it’s 350

@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. 

Originally posted by @Bill Brandt :

@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. 

 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...

@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?

Originally posted by @CJ M. :

@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?

Warren Buffett does ...

@Mary Jay

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

Originally posted by @CJ M. :

@Mary Jay

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

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?

Originally posted by @Scott Schultz :

Even if we see a recessionary period, I dont expect to see big change in real estate, many markets are super heated, BUT a recession will probably only moderate the market. I Flipped and sold foreclosures all the way through the last downturn, the difference this time is lending is not predatory not everyone has ARMs. and more people have a lot of equity. Currently most markets in the US is short on Inventory, so lets say we see a market slowdown, so days on market increase and maybe a slight downturn in prices, and I mean slight if any, the reason prices dipped last recession is because the sellers (banks) could discount to get properties sold, setting lower comps. and many homes were abandoned and blighted. now there are not many blighted homes compared to then, yea in a down turn a few people will lose there homes, but we will probably never see in our lifetime another 5.5% foreclosure rate like at the worst point of the great recession. I hate to burst your bubble Newbies, that ship has sailed, get comfortable with making deals work today, or wait till your old and its too late for you.

 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...