How do you borrow funds in a down economy?

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I'm also on the younger side (relatively speaking) and our "starting point" is about the same. I can share with you a few Fannie/Freddie guidelines that got looser since I entered the industry (ie, relics of the Great Recession being removed), so you can get an idea of what might be ahead of us. I'll also echo others saying "wait and see," since for all we know the next correction will have minimal/no impact on real estate. Before - No more than 4 financed properties per person. Now - up to 10 w/ a 720 FICO.Also before - You can have more than 4, but you can't do cash out refinances any more. Now - up to 10, cash out allowed.Also before - You can have more than 4, but the down payment requirement will be bumped by 5%. Now - up to 10, same down payment.Also before - Required reserves 6 months of PITI per rental. Now - Based on unpaid principal balances (UPB) of all investment properties. 2% up to 4, 4% up to 6, 7 through 10 require 6%. That last one, the reserve change, actually typically winds up being more conservative than the "before" requirement. Here's one that impacted primarily owner occupants, but not only them: Before - Can't count departing primary residence rental income unless you have 25% equity. People were doing "buy and bail," where you have an underwater 4/2 in XYZ neighborhood that you owe $500k on, but at the Great Recession prices they could buy a new 4/2 in XYZ neighborhood for $300k, and allow the old one to go to foreclosure. Basically, trashing their credit in exchange for a lower minimum payment and being less in debt. Now - no such requirement. Before - every home purchase needs an appraisal. Now - put 20% down on a primary residence, and get it for a price that our computer says is good, and have good credit with a conservative DTI, and the appraisal might be waived entirely (got a couple "no appraisal" transactions wrapping up at the moment, actually). Again, no crystal ball, but it's not crazy to think that when they look at where to turn the dial to be more conservative, they start by looking at what they'd done in the past to do that.

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@Daniel Ditto When I was investing in the 2008 crisis, for about a year it was really, really tough. Even my Go-To banks would say "we're simply not doing these type of loans right now". As things got slightly better, banks started to lend again for investment properties but as Stephanie mentioned, the relationship, credit, reserves are all important. Generally LTV will decrease in a recession. So if you could get a loan for 80% of the value, it may only be 70%, meaning you have to bring more money to the table. Appraisals also tend to be much more conservative.- Tom

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@Daniel Ditto I think this is probably a wait and see scenario. If the economy is trending down and lending guidelines tighten, it's hard to know how those guidelines will change, or what changes will be necessary. You can probably expect lower appraised values, the need for more cash, stronger credit, more reserves. Those are some basic ways to prepare in any economy.

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I think you wouldn't really have to search hard. The people that understand how to capitalize in a down housing market will be looking for partners. You are ahead of the curve my friend!

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Thanks @Anthony Michael, I sure hope so. @Stephanie Irto that is what I am wondering about. Seems like rental purchase lending in the last recession dried up some but maybe that was related to the type of recession it was and the previous trust everyone had in equity appreciation prior to 2007. I heard this second hand because I wasn't into RE at the time. Saving vast reserves of cash is also a decision struggle in my mind. I hate to leave decent cash flowing deals with low interest rate loans alone for now on the chance that the economy tanks and my cash is more valuable to lenders down the road. Seems like a bit of a catch 22 because I may have to miss out on increases now in the hopes of larger increases in the future. I would love to continue buying properties I believe will preform consistently, even in a down economy but be in a position to take advantage of richer deals in a recessionI know this is probably what everyone wants but I guess I just wonder how much cash I should be reserving for a recession? Does LTV increase or decrease in a recession?