Do you want a recession?

General Real Estate Investing
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Do you want a recession?

Cole Raiford
Rental Property Investor · Gulfport, MS · Member since 2018 · 113 posts · 133 votes

There are always posts about whether or not a recession is coming, or whether or not someone should wait for one to invest. Instead of that question, I’ll ask .... do you want a recession to occur in the next 12 months? Are you hopeful for one and positioned to take advantage of it, or are you over extended and fearful of one?

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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
7y

BP is the only place where you will find real estate investors wishing for a reduction in their property values.

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  • Brock Mogensen
    Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
    7y

    We are due for one, however I wouldn't say that I am hoping for one.  When the pull back does occur it will provide a good opportunity to be more aggressive with purchasing though.

    8Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    7y

    @Cole Raiford my powder is dry and ready; but I am not at all expectant. When it comes to rentals we are way undersupplied. I'd like to get one more 12-20 unit we will see what comes up, and when.

    4Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    Yes

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  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    7y

    BP is the only place where you will find real estate investors wishing for a reduction in their property values.

    54Reply
  • Frank Wong
    Real Estate Broker · Bay Area · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    Recession does not result in lower real estate prices. I prefer to keep the status quo.  Never would wish for the end of a great party.

    14Reply
  • Cole Raiford
    OP
    Rental Property Investor · Gulfport, MS · Member since 2018 · 113 posts · 133 votes
    7y

    @Mike Dymski yea I feel like that is the tricky part Mike. I want lower prices to buy more properties, but I don’t want to lose a large equity position in my bay area primary residence. It’s hard to know what to pull for!!

    5Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Cole Raiford:

    @Mike Dymski yea I feel like that is the tricky part Mike. I want lower prices to buy more properties, but I don’t want to lose a large equity position in my bay area primary residence. It’s hard to know what to pull for!!

    Keep in mind the only ones who really can take advantage of tough markets are either cash buyers or absolute PRIME borrowers.. newbies limited experience small portfolios  those folks will find it tough to find debt.

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  • Sam Shueh
    Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
    7y

    Recession allows prices to cool off. If not cooling off can one justify $3000/sf SFH? A consolidation of industries are badly needed. Too many electric technology and smart phones are here. Same with social media many are reinventing the wheels....

    3Reply
  • David Greiner
    Rental Property Investor · Ann Arbor MI · Member since 2018 · 58 posts · 43 votes
    7y

    @Cole Raiford

    Labor market complacency is tough these days. Shortage of skilled labor and trades. Makes the job demoralizing somewhat.

    Yes I'd take a recession

    3Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @David Greiner:

    @Cole Raiford

    Labor market complacency is tough these days. Shortage of skilled labor and trades. Makes the job demoralizing somewhat.

    Yes I'd take a recession 

    I cant see how you would think that being from MI one of the hardest hit states in the country.. the carnage was immense who would want to see that again.. at least as it relates to Detroit metro its finally finding its footing after 15 years of decimation.. cant see how anyone would want bad things to happen again.. 

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  • Craig Jeppesen
    Rental Property Investor · Chubbuck, ID · Member since 2018 · 532 posts · 466 votes
    7y

    No, why would anyone wish for bad times for anyone and for your wealth to decrease, and credit to tighten. I like slow gradual year over year growth. There are a lot of unknowns that can happen in a downturn even for up to now successful investors. I also don’t believe The housing market is going down for a long time. The last recession caused a huge housing shortage that will take a few more years to correct. 

    1Reply
  • Tony Kim
    Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes
    7y
    Originally posted by @Sam Shueh:

    Recession allows prices to cool off. If not cooling off can one justify $3000/sf SFH? A consolidation of industries are badly needed. Too many electric technology and smart phones are here. Same with social media many are reinventing the wheels....

    I agree. The access to information is definitely a game changer as far as how a recession will actually affect RE prices. Prices for SFRs and smaller multi units are so inflated with Mom and Pop investors that scour the internet that good value is difficult to find. A recession will just have a cooling effect and not a meaningful drop in prices. Best values now are primarily in assets that the whole world does not have easy access to.....namely those that are limited to accredited or qualified clients. 

    1Reply
  • George MevawalaBusiness Member
    Real Estate Agent · Scottsdale, AZ · Member since 2017 · 115 posts · 102 votes
    7y

    @Brock Mogensen 100% agree. This is the time to start picking up some good value add opportunities in a pull back.

    1Reply
  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    7y

    I just got the list of Tax Lien properties (95) to be auctioned off next month & it surprised me how many are in good areas & great school districts that are potentially up for grabs. Redemptions occur but this is going to be a field day if you're holding cash & we are!!!! 

    1Reply
  • David Greiner
    Rental Property Investor · Ann Arbor MI · Member since 2018 · 58 posts · 43 votes
    7y

    Tough times are time for growth.

    And I'm not talking about monetary growth.

    2Reply
  • Caleb L.
    Investor · Georgetown, Tx. · Member since 2019 · 149 posts · 69 votes
    7y

    Yes. Why?

    1) The markets are way to bullish!

    2) Interest rates are so low, it's already to dangerous!

    3) The market needs to be reset.

    Right now the interest rates are so low. And that drives corporate and consumer debt of the charts. There has been more debt taking out by corporations and consumers than ever before! And when a recession comes, and interest rates rise back up to 6%-10%, people will stop getting loans and have trouble paying them of. The banks will also collect as many mortgages as they can, to pay of their debt!

    Here's how it should work:

    5%-8% interest in good times, so the debt of corporations and people won't be so crazy in the good times. And a 2%-4% interest rate in bad times. That low interest will fuel more corporate debt, which is needed in recessions, in order for companies to stay alive. That would make sure American corporations would have a lot better chance of staying alive during recessions.

    But, right now we have it back words! And win the next recession comes, it will hurt because the FED can't lower the interest any more to fuel back up the economy.

    Result: Companies go bankrupt do to high interest rates because the FED can't lower them any lower. And we head into a really hard time! Not saying another depression will happen. I'm just giving facts. And the fact is this: The FED should raise the interest rate slowly up to about 7%-8% now. That gives them a lot of space to cut it in recessions. Which means that corporate debt will slow now, and in the recession, with interest rates low, corporations will be able to take out debt to stay alive.

    But, unfortunately, that's a pipe dream! :(

    7Reply
  • Bobby Stener
    Rental Property Investor · SF Bay Area · Member since 2018 · 49 posts · 54 votes
    7y

    @Caleb L. You do make a lot of sense, however, you have to understand the people on the fed are ALOT smarter than us here on this board and they know what they are doing.

    0Reply
  • David Greiner
    Rental Property Investor · Ann Arbor MI · Member since 2018 · 58 posts · 43 votes
    7y

    @Bobby Stener

    A lot smarter than us? More yes than no.

    But more importantly: they think they are a lot smarter than they are.

    11Reply
  • Bobby Stener
    Rental Property Investor · SF Bay Area · Member since 2018 · 49 posts · 54 votes
    7y

    @David Greiner. They are the smartest economic and financial people in the WORLD! I’m happy to let them make the decisions about where they want their funds rate.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Pat L.:

    I just got the list of Tax Lien properties (95) to be auctioned off next month & it surprised me how many are in good areas & great school districts that are potentially up for grabs. Redemptions occur but this is going to be a field day if you're holding cash & we are!!!! 

    Pat these are tax sales  not tax certs ?  and are there houses on any of those.. its so rare for a house to actually go to tax sale out our way. the sales here are 99.9% bare land..

    and normally anything really good gets redeemed day before ..  lets us know how that works there.. just curious..   With Bid for Assets taking our west coast tax sales on line.. its pretty tough to get a deal.. people bid from all over the world. 

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    0Reply
  • David Greiner
    Rental Property Investor · Ann Arbor MI · Member since 2018 · 58 posts · 43 votes
    7y

    There are a lot of extremely smart people that are also incredibly stupid. Intelligence is multi facted. You over simplify. 

    If history has shown us anything- we think we know a lot more than we do and this is particularly true of those in power. 

    12Reply
  • Caleb L.
    Investor · Georgetown, Tx. · Member since 2019 · 149 posts · 69 votes
    7y
    Originally posted by @Bobby Stener:

    @Caleb L. You do make a lot of sense, however, you have to understand the people on the fed are ALOT smarter than us here on this board and they know what they are doing.

     True. Although, you don't have to be smart as a person on the FED to understand economics. And to see and analyze the corporate industry to know that we're in HUGE trouble.

    The FED people are trying to keep to economy going strong, which it is to the average person. But, if you look inside the big corporations financial statements, 85% are in trouble if a recession comes!

    I look at America as a huge corporation. The president being the CEO, etc. Currently, America is loosing about $200,000 a year per person! Thanks to social security, wellfare, etc. As a matter of fact, the "rich" pay about 80% of all social security, so America has to only pay 20% of it, and we're still loosing money!!

    I think you get the point. America is one of the biggest companies, so to speak, in the world, and one of the most financially unstable.

    Good nations like Germany can afford to have free college and such because their financially stable.

    Not to sound condescending, but political parties like the Democratic party want to have free this and free that, high wages and the whole thing! Me too! BUT, we don't have the money as a nation! And all of these free plans for the public will run America into the dirt!

    Don't get me wrong! I feel bad for the people and companies that get hurt in recessions. But, it's the punishment that America MUST pay in order to reset itself, and after ten years, find ourselves in the same situation! Some how, Americans don't learn from the past mistakes of the economy?

    5Reply
  • Bobby Stener
    Rental Property Investor · SF Bay Area · Member since 2018 · 49 posts · 54 votes
    7y

    @Caleb L. Did you just say Germany? How many negative yielding bunds have you been buying from this stable country!?

    I do agree with your statement, this credit card will come due at some point and probably not soon, but when it does it’s going to make 1929 look like a warm up!

    2Reply
  • Caleb L.
    Investor · Georgetown, Tx. · Member since 2019 · 149 posts · 69 votes
    7y
    Originally posted by @Bobby Stener:

    @Caleb L. Did you just say Germany? How many negative yielding bunds have you been buying from this stable country!?

    I do agree with your statement, this credit card will come due at some point and probably not soon, but when it does it’s going to make 1929 look like a warm up!

     True point. German, and other countries bonds are very bad! I don't invest in bonds AT ALL. In terms of national debt, and there spending, it's better than America!

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y

    Why would someone would want a recession? That most certainly means job loss, increase in crime, property devaluation, stock market instability and everyone will lose net worth.

    I know those of you who want it to be like like 2010 again are thinking "buying opportunity". What you all forget is the hardship that so many people had to endure during that period of our history. 

    There is also some naivety when people believe they would seize a buying opportunity. In economic hard times, there are very few real estate buyers because fear and economic despair holds most people back. Only people with a heavy cash position can truly profit from a recession or depression, but they take a major risk to get that reward.

    Just a moderators reminder too, please leave politics out of this and any discussion. 

    14Reply
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