Capital Availability In a Real Estate Recession

[Jon S.]

What happens to availability of investor capital during a real estate recession? Do hard money loans, bridge loans, 30 year commercial fixed loans for rental properties, fix and flip loans, commercial lines of credit, all dry up? How would the qualification criteria change? Bottom line, if you already have access to credit and loans in this current market, is that any indication of the capital access for RE investing during a recession? Or will we only be able to access the capital in our bank accounts? I want to be prepared to buy properties when there’s a market downturn. But I don’t want to sell my properties to stockpile capital.

[Jon S.]

@Manny Cirino

How is institutional funds defined? It sounds like hard money won’t be available? My concern is that banks will tighten their criteria making it harder and more costly for smaller investors to get loans. Is that about right? What can small investors do to be more eligible for funding in a downward market?