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How To Prosper When The Market Collapses

Look, I’m going to level with you.  I think we’re screwed.

We all saw what happened last week because of “Brexit” (British Exit).  The markets are in uncertain territory.

Add inflation and the potential for recession – this situation becomes even more complex.

People are tightening their belts.

Companies are lowering forecasts.

The only thing that’s keeping us from hearing about it 24/7 is all the other crazy stuff that’s going on in the country right now (from the election to the violence).

If it weren’t for those other headline-grabbing situations (and tragedies), we’d hear about an impending recession over and over again.  It’s happening.

But that’s not actually the scary part.  Weirdly, I think many Americans might be thinking, “Another recession? That sucks. Well, we got through the last one; how bad can this one be?”

There’s actually something far scarier going on, but to see it we have to look outside of our borders.

There are crazy things happening in economies all over the world:

  • Canada, our country’s largest trading partner, has a fairly stable economy right now (which protected it in the 2008 recession, too), but it’s taken a beating with low oil prices and a VERY costly city-wide evacuation of tens of thousands of people.  Their overheated real estate is poised on the verge of collapse, too.
  • In Europe, the so-called “Brexit” (Britain’s exit from the EU) has shook up all of Europe.
  • The Middle East is a mess.  What more do I need to say about that?
  • And China is entering what could be an unprecedented period of deflation that could impact us globally.

I’m not going to review every nation or region in the world but I just wanted to show you that we’re seeing something we’ve never seen before: massive, sweeping, global changes (and VERY scary ones) happening in a lot of key economies.

Even countries that survived and thrived through the 2008 recession (Canada and China and parts of the Middle East) are hurting right now and poised for a fall… and our world’s economies have never been more interconnected than they are right now.

When some of these nation economies start to collapse – look out.  It’s a house of cards that will be dramatic and very painful for a lot of people.

Even investing legend George Soros has said similar things – that the world is facing a massive economic crisis that we’re simply not prepared for.

I’m not telling you this to scare you but to actually help you…

You see, when the global economy melts down (not IF but WHEN), who will be the people who hurt and the people who prosper?  (Yes, even in a global meltdown there are people who prosper).

  • The people who will be hurt are those in economically sensitive jobs (retail, tourism, construction, automotive, luxury goods, tech, and start-ups).
  • The people who will be hurt are, like in 2008, those who are leveraged to the hilt with multiple mortgages on houses they can’t afford.
  • The people who will be hurt are those who are holding a significant portion of their investment portfolio in stocks.

That’s A LOT of people.  Actually it will be far more widespread and far worse than the recession of 2008.

But who will prosper?

Ultimately those who prosper are those who are prepared – those who knew it was going to happen and did something about it beforehand.

Maybe you (if you heed my words and take action).

So, what can you do about it?  Here’s what I suggest…

Start liquidating your equity positions (i.e. stocks, mutual funds, etc).

Then, buy turnkey rental real estate.

Or at least start thinking about it… getting your ducks in a row to do so.  (i.e. Move your money into a place where you can hold real estate; make sure your IRA is a self-directed IRA; and so on).

Because when the next crash happens, the people who will survive it are those who own the one asset that tends to preserve its value (real estate).

The same asset that historically increases in demand during a recession because people need a place to live (rent) but cannot afford to buy a house.

Rental owners do very well in a recession because there are many factors working together for their benefit – but primarily it’s the bank’s tightened lending policies that keep people from getting mortgages (or often foreclose on hardworking families who no longer have a place to live).

This increases the number of people who need a place to live and will rent.

And if you own a rental property, that puts you in the PERFECT position to prosper.

Just imagine acquiring a couple cash-flowing properties and enjoying the regular income from them, and sleeping soundly at night even when other people are worried about whether they’ll have a job tomorrow.

Now it’s your turn: I’ve given you the warning and the facts; I’ve given you the strategy to survive (and indeed to thrive) and now it’s time to take action.  Trust me – you won’t want to leave this too long because… well… just look what happened last week!

  1. Comment by Ndy Onyido
    June 28th at 9:11 am 

    Great post!
    I am in Canada and I know that the markets in Toronto and vancouver are over heated.. a correction is imminent and I have been saying this since 2012. I work in the banking industry and banks are beginning to scale down thier exposure to this industry to reduce their loss at default when and not if the market corrects..

  2. Comment by Omar
    June 28th at 9:58 am 

    I agree about buying real estate that cashflows. I’ve been buying apartments since 2010 and just closed on 77 units earlier this year. I plan to close on another deal by the end of the year and continue to grow.

  3. Comment by Richard Harrison
    June 29th at 12:58 am 

    You might be correct; you might be just another Chicken Little in the crowd. But you are definitely self-serving in this post. There are far more and wiser voices to be heard on this topic none of whom are selling anything other than their considered opinion for one’s consideration.

    These are turbulent times for sure but far from unprecedented ones. People in this country would be wise to begin educating themselves on what happens outside our borders and how that can affect our individual and national well being. But I doubt Norada Real Estate – or any similar concern – should be high on anyone’s list of sources for this research.

    Any day is a good day to buy real estate just like any day is a good day to buy stocks so long as one has considered the risks in relation to their goals. Despite your disclaimer you are in fact attempting to scare people. Being scared is never a good reason to invest in anything. Being scared is never good period unless you’re faced with an immediate life-threatening situation. There is nothing life threatening about anything you’ve addressed in this post.

    Providing folks with reasonable products in return for a reasonable profit is commendable. Everyone wins. Something worth returning to perhaps.

    Good luck.

  4. Comment by Marco Santarelli
    June 29th at 8:45 am 

    Richard — I think Mark makes some strong, but valid points. I don’t think his intention is to scare anyone. It was probably more of a wake up call to those who are not as well aware of the current economic and global situation we find ourselves in today.

    As a student of economics and geo-politics myself, I share his concern and sentiment. However, I would propose a slightly broader solution that includes most forms of hard assets – not just income real estate.

    We all want to protect our wealth, and preserve purchasing power. Real estate is one option, but a great one for many reason the readers of this site are well aware of.

    Paper assets are far more speculative in nature, especially if you are not a professional trader or market analyst. You just don’t have the control that you have with real estate and other hard assets.

    Anyway, great feedback Richard.

    Continued success!

  5. Comment by Omar
    July 21st at 10:49 am 

    Great Article, Thanks for posting it, now the question would be: Having gold and silver as another option for value protection and knowing that during a crisis the value of gold and silver may increase, would it be better to wait until the commodities increase their value and then buy real state at that moment, when the home value should be more affordable?

  6. Comment by Marco Santarelli
    July 21st at 10:13 pm 

    Hi Omar, gold and silver are inflation hedges just like real estate, so under normal circumstances they should all keep pace with inflation (+/-). However, there is a lot a manipulation in the metals market, so trying to time any market is somewhat difficult.

    I think the better strategy is to buy your gold/silver as part of your investment portfolio, but also buy prudent income property in the markets that make sense. That way you get the best of both worlds.

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