are often considered to be a great investment during a recession: 1. Multifamily properties. Investing in multifamily (i.e., apartment complexes and townhomes) can be a great option during a recession. The demand for rental housing often increases as individuals or families downsize or postpone ownership due to economic uncertainty. Well-managed and properly located, these properties can provide consistent rental income and long-term appreciation. 2. Residential rental properties . Rental properties, particularly in high demand areas, can provide a consistent income stream during a recession. Affordable housing options such as 1-4 family units and desirable rental markets tend to be more resilient. Commercial properties with long-term leases, such as retail and office space, tend to offer stability during a recession. However, be careful in this post-COVID, work-from-home environment. And, although online shopping is the new the norm, you still can’t get your nails done or hair cut online. 3. Commercial properties.
you can handle the additional burden. What is the worst-case scenario? Bad things happen to good people all the time. 6. How reputable and reliable is the lender? Look for reviews, testimonials, and references to check their track record. Personal referrals are always the best. Ask the lender to tell you about their worst deal. Get them talking so you can learn about them. 7. What is your exit strategy? Even if your plan is to sell the property, you need to understand how you can get refinanced out of it just in case it doesn’t sell. You need multiple exit strategies. 8. Have you considered economic conditions? The economy changes. Check with multiple sources—not just the one who will tell you what you want to hear—to give you an update on current conditions and a prediction for the future. The update should focus on the real estate market and the business environment and use government economic indicators. 9. Have you sought advice from other real estate investors you know, like, and trust and are successful and experienced? Nix gurus and people trying to sell you education. Talk to people you see doing honest business in your area. RECESSION-SMART ASSET CLASSES During a recession, certain real estate asset classes may have better resilience and potential for returns. Here are some asset classes that
prices. Buying these proper - ties, rehabbing them, and then selling them is known as fix and flip. Distressed properties include foreclosures, short sales, and properties with motivated sellers. Careful due diligence and a solid understanding of what you are doing is required for success. When working with these types of properties, remember above all that the sellers are experiencing what may be the most difficult times of their lives. Make sure the deal is a blessing to all involved. The performance of real estate asset classes can vary, depending on specific market conditions and the severity of the recession. Markets are cyclical and always changing. Stay on top of the local market trends and assess the demand dynamics. Diversification within a real estate portfolio can help mitigate your risk. Investing in a mix of asset classes, locations, and property types can provide a more balanced portfolio. FIX-AND-FLIP FORMULAS Investors use many calculations to help them assess the probability of a project’s success. Here are three you need to think about: 1. After Repair Value (ARV). This is an estimate of what the property will be worth once it’s been com - pletely renovated. To calculate it, you need to know comparable sales in the area—and you’re not going to find that on Zillow. Ask a real estate agent to run comps for you. You need to consider the size, the age, and the style of the properties. Further, its location must be within a mile.
4. Industrial properties and warehouses. Warehouses, logistics, and self-storage
facilities tend to have consistent demand during recessions. With the growth of online retail and the need for efficient supply chains, the demand for the space is growing. 5. Distressed real estate. Reces -
sions often create opportu - nities to acquire distressed properties at discounted
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