• Pace Morby

What a recession means for me in the 2022 housing market

Here’s a question for current real estate investors or future investors looking to get into the market:


Why would you ever get into real estate the traditional way?


What’s the traditional way?


The traditional way of doing things is called the BRRRR method and, no, I’m not cold. BRRR means to buy, rehab, rent, refinance and repeat to make a profit.


If you want to invest in real estate using this method, you should be shaking in your boots right now. BRRRR is outdated and investors are going to be feeling the pain here in the future.


I know in my business I’ve only maybe had a handful of homes where we executed the BRRRR method in the last year that I’ve seen a full return on my investment; maybe a handful total.


Imagine getting into the real estate market in the riskiest way possible at the time of the ultimate unknowns.


Scary.


And I’ve seen a lot of our SubTo community members speculate about a possible recession coming our way later this year or even next year.


While the chairman of the Federal Reserve says a recession is not likely, it is still a possibility. So how do you prepare for a recession? Or rather, how do I prepare for a recession?



Like I said last week, the housing market is insane right now. Home prices keep growing and are likely to slow a little if a recession hits; but they’ll still keep heading upward!


The low interest rates won’t be coming back.


So, finding a home – whether it be for you or for an investment – might seem like it’ll be easier, right?


Guys, that’s just wrong.


A recession would get its hands on every part of the economy, and the housing market is no exception!


There still aren’t going to be enough houses on the market to meet needs.


People who paid inflated costs for their homes in the last two years are probably going to see property value depreciation.


I hate to say it, but there’s going to be a lot of pain if a recession does come. We may see foreclosures pop up like we did around ‘07-’09.


That means a lot of people losing money and losing their homes.




Now, as crazy as it might sound, I'm going to tell you that there are actually a ton of new opportunities for buying and investing in real estate.


A future recession would mean a ton of new opportunities for buying and investing in real estate. It would mean helping out a lot of people that would otherwise have their credit completely destroyed.


This is the power of creative financing – helping people solve serious pain points and challenges when it comes to their housing.


You tell me: does taking ownership of a property from a seller who can’t make their payments sound like it’s going to come in handy during a recession. Of course!


Sellers have plenty of reasons they’d be willing to let you take over their property through subto. In the case a recession does come, creative financing is not only going to be the only smart way to continue to invest, it might be the only way you can invest and help your community.


So, while you can’t avoid being caught in a recession, you can take steps now to help out then.


Being an entrepreneur means that I get the chance to serve my beautiful wife and family and make money, but I also can help out my community. It can be that easy.


If you’re a part of the SubTo fam, you get to be a part of the generation of entrepreneurs that will be helping people out and turning a profit. And if you’re not a part of our community, come join the growing number of people around the country who are changing lives and seeing results.