We like self-storage because even if there is a recession, and people downsize, those people will have a need for self-storage, as evidenced by storage occupancy rates during past recessions.

I was going to mention the same thing about the Covid eviction moratorium but you covered it so well.In addition, at the Great Recession there was markets were rents fell and markets were vacancy rates increased significantly. 

If rates are dropped into the mid to low 5s, we're in a recession.

I only know about the times where this was found out prior to closing, obviously I have no way to know about the times this shady behavior wasn't found out.Since you get a vote in who this tenant is, and it's retail, PSA that commercial lenders (especially the ones offering the best terms...) are starting to vet deals by how 'recession proof' the tenants are, even if they are currently paying on time.

That may not seem like a big jump, but a 50 basis points (0.5%) increase in the UR has historically been a very reliable recession indicator.

If rates did drop, that 3 year fixed period means their rate would automatically drop with it, so they wouldn't have to refinance if they didn't want to, but if they did want to (cash out refi made possible by a recession forcing more elderly people into assisted living facilities, thus driving up rents, and the value of assisted living facilities? 

It sounds like they want to get as close to the assessed value as possible, and I remember that during the Recession assessed values were higher than you could actually sell a property for.

If they’re dropping without a recession it could get very ugly if things turn negative for the average renter.

If there's a hole, it may be a red flag.b) sensitivity analysis: I examine all the assumptions, and make sure I can live with the worst case scenarios.c) "Stall and see": if they are getting money over multiple years, and there is no penalty for investing later, I would usually wait so I get some real performance data, versus having to look at theoretical pro forma information.d) Recession stress test: I will not invest in anything, until I subject it to recession level stress and see if I can live with the result.

Judicious use of leverage (debt) when the property will still cash flow positive after debt service; when there’s enough equity left in the property to refinance if advantageous, and when sufficient reserves are held to cover vacancies, recessions, and unexpected repairs5.