Best Tips From Your Experience in Prior Recessions

[Chad Carson]

I published an article on the BiggerPockets blog yesterday with 7 lessons I learned as an investor who owned properties (flips, rentals, notes) going into the 2008-2009 recession. For most of the lessons, I have the scars to prove it!

So, I'm curious to hear from others who've invested through at least 1 recession to see if you could narrow down a few best lessons that can help others in the current challenging market. 

[Evan Polaski]

@Chad Carson I think you hit some very good points, my biggest takeaway is don't grow too quickly.  As you mentioned with your relationship point, when you are growing faster than you can handle, you will quickly take on more risk than you realize.  

I always go back to what my former boss said, fairly early in my career, as we were into the recession: money is always available to those that don't need it.  When you are sitting at 30% leverage, you look like an idiot in good economies, but stress free when the world shuts down and goes into a global retraction.

Finally, have a long memory.  Whether you just got started or have been investing for 3 decades, remember this time.  Write it down.  Get it tattooed on your forehead.  When things are high flying again and everyone is making money, remember how on February 1, 2020 everything was great, the recession was not going to hit because there was no dramatic run-up like other falls, etc.  But by April 1, everyone was locked in home, unemployment jumped 9-10% in the matter of a week, and tenants cannot be evicted for not paying rent.  When the next downturn comes, you will be happy if you are prepared, but you will only be prepared if you remember that things can turn quickly.