I am sure others are feeling a shifting in the tide as things continue to be overpriced, increasing interest rates, and return metrics continually become more difficult to hit. I was hoping to get some discussion here on the biggest opportunities in Real Estate, specifically mutli-family investing during recessions and financial downturns.
If you could go back to 2008-2010 what were the biggest opportunities for Real Estate investors and how could you have taken advantage?
If another downturn was going to take place what type of deals would you look for and how would you best prepare to take advantage of a real estate market that is crahsing?
Looking forward to all responses.
@Zachary Feldman MF investors still did well at that time as long as they weren't too leveraged, so that would be easy to say. But I'd go a different route and buy up a bunch of SFR because they were deeply discounted. This is also assuming that I'm going back to 2008-2010 with a boatload of cash that I can afford to lose for a few years until the market bounces back.
If you are waiting for the type of downturn we had a decade ago, the next one will likely happen after you are dead. That was a once in a lifetime oppurtunity. The last one before that was the great depression.
@Zachary Feldman good topic. Even if it never happens I think it is good to think about as a thought exercise.
Looking back, the assets that have appreciated most are the most popular. So for me, what that means is I would go into the best neighborhoods in Atlanta and buy as much as possible.
Same for vacation type properties. I would go to Destin and buy anything for sale. Same ski towns in Colordao.
Get your credit score to the top tier. Have a preapproval letter ready. Have 6 month- one year living expense in your savings.
The next recession will be a mild one. Homes do not sell quickly and some sellers have to lower price. It may be flat for a few years to a slight reduction 5-10% depending on are where you are. Past experience and results are not indicative of the future. The investors over leverage will file bankruptcy or go out of business.
We don't know where the top is now or how long it will last and we didn't know where the bottom was back then nor how long it would last. It's not easy to catch a falling knife.
If there is a downturn, investors with experience and access to capital will have the best opportunity. Figuring out which asset class will vary...all market cycles are different.
Have cash and have investors with cash ready to deploy. Make sure that you are doing things that will set you up for success by gaining trust of others, running your company well, educating yourself, etc. Right now I am in buy mode, but we are trying to remain conservative and stay in a good cash position. If you set yourself up right, then the next recession will not take you down.
There will be opportunity during the next recession. It could be in single family, Multi-family, Industrial, retail, office, so be prepared and educated. For those that say Multi-family didn't get hit hard in 2008-2011, look back to the late 80's and try telling me the same thing. No sector in RE is bullet proof, so remain humble!
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