Taking Advantage of A Downturn
The experts have been and I'm talking about these guys that are you know, hey, give me 500,000. Let me invest it, let me short it for you. They lost money five years in a row because they kept thinking this was the year, the depression is coming. This is before covid. And I know good people that are like, you can't go seven years, I've looked at history. It only goes seven years. The longest, you know, non-recession has been nine years. Now we've gone 10, 11 years without a recession. So for anyone that is over 40 years old, that has some understanding of the economy, realize that it goes up and down and I knew and at least I felt like I knew when the housing prices were outbidding each other, it felt a lot like Los Angeles in 2005 when everybody that was a waiter and actually could walk in with a 550 credit score and get a million dollar house and I'm like, there's something not okay about this. And I know that the fundamentals are different than 2008.
Of course, from the crash I understand all that. But when other people like the bitcoin and the real estate when average non-sophisticated buyers are rushing into a market like the Dutch daisies or the Dutch flight, I'm always like, okay, something we're at the top of this thing not about you because you're also a real estate investor like me. But at some point in the last year and a half, I was like, man, I'm out unless I find a great deal. Like I'm just going to wait till it on sale. That's how you handle a recession and I'm no Warren Buffett, but you know he actually admitted, hey, for the last 12 months, we've been stiff, we've been tucking away money.
We've been tucking away cash because that seems like the best way to prepare for a drop in value. And what happened in the last six weeks has recorded. This is people got scared, the stock did drop, tech drop, bitcoin drop. So people then say, holy christ, I don't have a lot of cash and now I need the cash back so where you need the cash from? The only liquid assets are stocks and bitcoin and you can't liquidate a house instantly. So I'm not scared. I kind of expected it but if you're not in a position to either have cash, look at it because now you know the credit's dried up. So there's no more easy dumb money to buy those things that are now on sale. But if you're a real estate investor in the next three years, that's going to be the best time to buy.
Think about all the people in the last three years. That over leveraged bought 10 airbnbs because money was cheap. And now they're like I'm going to be in business and now they're like, oh no, I got to sell one or two a year I know that. So there's going to be things on sale and just like anybody who's ever gone to Walgreens or on amazon, we like on sale. It makes us happy. Why would you buy anything retail if you can get it on sale at the same product? That's how you have to look at a recession is things are now on sale. And do you have the money or the credit or the relationships to create? Now a bigger asset pile and hang on to it for the next four to seven years? Is that fair and the way to look at it?
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