Protect Yourself And Your Investments When The Next Recession Hits.

“Here Are The Things That You Should Do So That You Can ‘Survive’ and ‘Thrive’!”

By Van Sturgeon

Real Estate Investor

You know it’s coming…

It’s just a matter of time…

Are you ready for it?

It’s a question that I get all of the time. 

“When is the next recession and when will the downturn in the real estate market happen?”.

There are a lot of businesses out there that make a lot of money on fear. The media is a perfect example of a place that thrives on generating a lot of negativity so that people watch their programs and read their news articles. 

How interested would you be in the news if all that you heard and read was about how everyone got along and there was peace everywhere. Think about it...

Listen Folks...As the saying goes “It's not IF there will be a recession, it's WHEN will there be a recession.” That’s a fact about life. What goes up, must come down. Look at history and you will see the same human patterns emerge for thousands of years.

So...yeah, there will be a recession and a downturn in the real estate market coming soon.

So what?

I find that many new investors are often asking the wrong people and receiving bad advice that instills fear on making a move and preventing them from taking action.

The truth is nobody really knows when the next recession will hit, and how dramatic it will be to the real estate market. I have seen real estate markets react to recessions differently, in different areas of North America. 

I have investment across this wide landscape and I can tell you that each market has reacted differently to a recession.  

But as an educated real estate investor, you can certainly build a lucrative real estate portfolio using proven systems that will protect your finances and your real estate investments.

First...Don’t try to predict the market. There's a common saying in the real estate industry…

“It's not about timing the market…. It's about time in the market!”

So now that you know there's going to be a recession, and you don't have to worry about trying to figure out when it will occur. I want you to think about some different questions that will help assure that your real estate is protected for the upcoming recession.

I want you to think about your financial situation and real estate portfolio thriving in the next recession.

I want you to notice that these questions come from a place of confidence and certainty, rather than in fear.

Folks...Trust me that Success in business, real estate, and life is 95% mindset and 5% execution.

I have been involved in real estate for over 30 years, and I have seen some real doozies along the way. Prices have skyrocketed and made millionaires out of people, and I have seen those same people later have their properties foreclosed on them by the banks. 

Any successful real estate investor with years of experience and success will tell you that recessions are full of opportunity, if you are prepared to take the chance and use it to your advantage. From personal experience, I have made my fortunes during these periods of time. 

I have helped many investors start, scale and manage their real estate investment portfolio…during these tough economic times. It’s actually the best time to start...

If you are an investor that currently owns real estate, I want you to stress test your portfolio so that you can have the confidence to be able to get through a recession, and actually thrive in the environment. 

You should be aware of your debt and compare it to the appraised value of your real estate portfolio. You need to stress test your portfolio by doing some calculations. If you had a drop of 25% in rental income, you need to make sure that your portfolio will be able to break even and pay all of its expenses during this period of time. 

We don’t want to over leverage our properties, and you always want to make sure you are cash flow positive. If your portfolio is over leveraged, you can always take steps now, before a recession comes. One possibility is to sell one of your properties that has a lot of equity, and use those funds to reduce the debt on your other properties.

You can also do this with your personal funds. You want to make sure that you are not living beyond your means and that you have nice healthy reserve funds in your account should something happen. At a bare minimum, you should have at least enough money to cover the expenses for each property you own for three months in a reserve fund. In addition, you should have at least 3 months of your daily living expenses in reserve, as well. This is a bare minimum and I would suggest you slowly manage your budget so that you can increase your cash reserve fund.

Our banking system likes to lend money when you do not need it, and they make it extremely difficult when you do need money. I would suggest that you get as much access to capital now, when times are good. For example, you could start to improve your relationship with local banks, set up lines of credit, get another credit card that is for emergency purposes only, and start to build relationships with private money lenders.

By being proactive and positioning yourself for success now, you will not need to worry about what will happen in the future.

In fact, you will be welcoming a recession and seeing it as a positive development to your growing portfolio. In addition, you can sleep peacefully knowing that your portfolio is built on a solid foundation and can withstand a drop in property values and/or rents.

Do this now! I promise you that when the next recession hits and real estate goes on sale, you will be able to buy amazing deals from the real estate owners that were not educated and not prepared!

Remember the best investment you can make is in YOUR education.

As I often say "success is not a matter of chance it is a matter of choice." You can invest a little bit of money today to become educated, or it will cost you a whole lot more in the future when you get hit with a bill from the school of hard knocks!!!

For more information on house renovations and real estate investing, visit www.vansturgeon.com to help you in your real estate investment journey.