Are cash-flowing rental properties recession proof?

[Theo Hicks]

I need to stop doing this, but I had a discussion with a work colleague regarding investing. He has a few rental properties but does most of his investing in the US stock market. When I brought up the fact that I was in real estate and told him my strategy (BRRRR) he was up in arms. When I tried defending myself, he brought up the fact that I wasn't around for the 2008 recession where real estate investors (and investors in general) got hit pretty hard, and that if it were to happen again, I would be in trouble since I am only investing in real estate, for now (I am only 24...).

So I started thinking about how a cash-flowing real estate portfolio could be hurt by a recession. If my $100,000 property value is decreased to $70,000, as long as I still have tenants paying the rent, I am still making money. And since I bought at below the market value (let's say $85,000), I may have paid off enough of my mortgage to not even be upside down on my loan. Also, if a lot of people aren't on BP and bought above market value, aren't cashflowing, or are upside down on their mortgage, not only will I be able purchase their properties inexpensively, but they will still need to live somewhere, so the demand for rentals will go up resulting in rental rates going up resulting in increased cash-flow and more properties purchased! As long as I have a decent amount of cash saved up (since I won't be able to take out equity) and I have had some good success investing, I should have no issue buying properties outright or getting a loan.

In a nutshell, this was my response to my colleague and he was telling me that I didn't know what I was talking about and that I was wrong. 

So I write this post to get input to see if my logic is correct or if I am missing something? I am still very new to this so if what I said was ignorant or incorrect, I need to know lol Thanks in advance for the help!

[Joe Bertolino]

There are real estate guys and there are stock market guys. Don't bother arguing with people who the trust the stock market more than they trust their own ability to select and manage a property. These are the same people that "don't want to get calls about clogged toilets" so they hand their life savings over to a financial advisor and hope for the best. Don't try to convert them.