How do you prepare your investment for the next market crash?

[Chatree C.]

Hi everyone, newbie here. I'm planning to buy my first investment this year. I'm trying to do as much due diligence as possible to protect my investment and assets if the real estate market crashes in the future.

For buy and hold strategy, is it enough to make sure cash flow positive (actually not easy in my area) and account for enough unforeseen expenses? I wonder how you all prepare your investments for this.

It would be nice to hear from folks who had been through the previous market crashes as well. What you learned and what you wish you had done differently.

[Derrick W.]

here is my plan. 1. I work with c+ to b+ rentals. No matter how bad things get there will always be b&c tenants. An A can move to a B but there is no one to replace an empty A. 

2. My loans are structured as such that I can drop my rents to just break even and I can still survive.  This kills cash flow but is an emergency plan. 

3. Reserves! I can survive 3 months with NO renters. This is highly unlikely but possible. I plan to Keep adding cash to this account until I reach a 1 year "safety net". This is not my repair reserve, it's a "pay the bank note" account only. 

I over plan ahead. The old saying " pray for peace but prepare for war" is a good motto to live by.  No one can be 100% ready but I hope to  be as close to that 100% mark as possible.