What happens when lending liquidity dries up?

[John Canque]

Recently attended my first REIA meeting yesterday and was excited about hearing from the speaker and that I recognized a lot of the concepts from my 2 months of study. The concept of an unlimited ROI was intriguing (using a hard money loan to pay and fix a buy-and-hold property and refinance after completion with essentially no money down).

My questions are:

1-"What happens when loans dry up such as during a recession?"

2- "Is this a realistic concern?"

A hard money loan charges a high interest rate and is meant to be short term financing. I'm fearful of the worst case scenario of buying at the market top and not having money to pay off the hard money loan. Thank you in advance!