How to Prepare for a 2026 Recession

This week on my Mastering Real Estate podcast, I reviewed J Scott’s "Recession-Proof Real Estate Investing. This book aims to equip readers with the knowledge and tools to make informed real estate decisions regardless of the economic climate.   

One notable quote from the book that we should all pay attention to is: 

“If the real estate cycle saw a downturn in 2008 and typically cycles every 18 years, that means we should expect to see another dip in the real estate cycle sometime around 2026. That could be a minor real estate downturn or, if it coincides with another business cycle downturn, it could be much worse.”

As I read the book, I took copious notes and created this helpful PDF I want to share with you. It details each phase of the economic cycle, how to recognize it, and how to adjust your real estate strategy.

Right now, it’s pretty clear that we are coming off of the Peak phase, so we should all be looking ahead and preparing for a recession. Here are some things that we can do to prepare as real estate investors.  

How to make money during the Peak Phase: 

  • Flip with caution.
  • Buy and hold works, but some strategies are better than others.
  • Multifamily value-add works, but deals are hard to find, and there is added risk.
  • Change your lending tactics
  • Note investors should demand discounts.
  • Wholesale instead of flip.
  • Consider recession-resistant commercial assets.
  • Avoid short-term borrowing.
  • Consider using long-term lease options to rent or sell.

How to Make Money During a Recession: 

  • Be opportunistic.
  • Buy and hold in good school districts.
  • Start a turnkey rental business.
  • Start looking out for early REO deals.
  • Buy and rehabilitate non-performing notes.
  • Wholesale to landlords.
  • Start looking for short-sale deals.
  • Consider raw land.
  • Take advantage of seller financing.
  • Purchase with lease options.
  • Get familiar with subject-to and wrap deals.

If you want to learn more, make sure you check out my podcast episode

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