Recession fears in 2026: are you building bigger cash reserves or going all-in?

Question

Cheers from San Antonio!

Recession fears in 2026: are you building bigger cash reserves or going all-in on cash-flow assets?

I’d love to hear where everyone stands right now:

• > Are you increasing your cash reserves and playing more defensively in 2026?
• > Or are you aggressively going after cash-flowing rentals and BRRRR deals while others are hesitating?
• > How are you stress-testing your numbers for higher insurance costs, potential rent concessions, or longer vacancy periods?

Jeremy Horton · Answer

Increasing cash reserves? The usual here, no changes. Usually about 3 months expenses per property. Then a separate emergency fund. Same with the stock market - regular DCA since we're at ATHs. If we dip again >10% like we did earlier this year I'll double down. RE in my area hasn't dropped much, if any so it doesn't make sense to buy more.

Aggressively going after rentals? Negative. I'm doing the opposite. Planning to sell out of most of my SFH LTRs. I think there are better opportunities. I think SFH LTRs work for the right niche of people - RE professional, agents, those in the RE business full time that can take the tax deductions.

Stress testing? I usually account for ~10% increase for insurance/taxes. Problem is we have seen way more than that in the last 4-5 years. On top of that rents can't be increased enough to cover the increased expenses. That's why I'm planning to sell most of my rentals.

If I was in the real estate business completely, I would use a lead generation system to get targeted leads probably through propstream (direct mail, texting), funnel them down by the best deals in good locations, do creative finance/margin loan and rehab and probably sell most of them. Potentially keep a few as LTRs (if you can get the tax benefits).

I am just seeing a lot more opportunities that SFH LTRs right now. Subdividing land, developing, even building and then selling. Or affordable homes at scale - trailer park, RV park, manufactured home community w/ a small plot of land. Businesses. Stock market.

Chris Seveney · Answer

Certain markets across the country will be great buying opportunities in 2026, especially those who potentially could buy distressed real estate, as we are seeing a significant uptick in the number of distressed properties coming on the market. I just want to reiterate this will absolutely be a market-by-market situation, as some markets will get hit much harder than others.

Alyssa Marquez · Answer

Back home I may take a more middle road that is why I continue to maintain my cash in good shape, while continuing to look for cash flow that looks good in conservatively conservative. In performing a stressed analysis the thing that I consider is what would be my position with increased insurance & property taxes. Extended Vacancy periods, (including actual and deferred) as well as maintenance & Capex, And then assume a 10 % reduction in rent or offering a 10% concession.

If I still get an acceptable cash flow with these figures then I would buy with confidence.

Liquidity in this market is a lot easier to get back then a good deal.

Recession fears in 2026: are you building bigger cash reserves or going all-in?

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