Recession imminent? Should I sit on sidelines?

[Alex Silang]

I was just in a cafe today reading how a recession is on the horizon in Fortune magazine. Many many factors, most notably the almost inversion of the yield curve (which predicts recessions with 100% accuracy.)

Right now I got a triplex, things are going great but rent could be improved (and would include some rehab.)

I've always thought about doing a BRRR (first one was minimal rehab), flip, etc. I do have access to private money (wealthy aunt offered to lend money.) However, my heart tells me time is not right. In my target market, I'd probably be close to meeting the 1% rule, but I'd want to do a little "value add" to juice returns. But I don't want to do anything major now given my newbie status (first property was merely to get my feet wet.) If I was doing my first rehab (which of course would come with cost overruns, mishaps etc) while the market/economy was tanking....haha ya that wouldn't be good.

On the other hand, some people do deals in good markets and bad. I could rehab and then hold it (BRRR), not necessary to flip... I'd hate to wait on the sidelines for 5 years with a tinfoil hat before acting.

What do you think?

[Cassi Justiz]

Markets will always rise and fall. If you are buying right and cash flowing, a downturn will not destroy you. You just want to make sure you are not over leveraged and you can afford to drop the rents to cover the mortgage in the worst case scenario. You definitely don't want a $1500/month mortgage on a house that will barely break even or cash flow at a high point. If you wait around, it will be much harder to get loans once a crash happens.