What If The Market Crashes?

How I Survived 2007-2012

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What If the Market Crashes?

I remember the day vividly: August 2007. I was sitting in my realtor’s conference room when the news flashed across the screen—Countrywide Mortgage, one of the giants, was going under. We didn’t fully grasp it at the time, but it was the beginning of the greatest property value correction in modern history. Over the next three years, banks collapsed, home values plummeted, and the ripple effects touched everyone in real estate.

Rather than rehash the causes, let’s focus on what I learned about surviving—and even thriving—when the market turns.

1. Watch the signals

Keep an eye on default and foreclosure rates, the volume of home sales, and overall market sentiment. Cracks in the foundation show up before the walls fall.

2. Respect leverage

Debt magnifies gains, but it also magnifies risk. If property values dip, over-leverage can turn a cash-flowing portfolio into a liability overnight.

3. Read the broader economy

Housing doesn’t move in lockstep with Wall Street, but investor confidence does spill over. When capital markets tighten, real estate feels the chill.

4. Remember: opportunity hides in downturns

If you have cash, you’re in position to scoop up assets at deep discounts. That’s not “taking advantage” of others—it’s providing liquidity when the system needs it most.

5. Use interest rates wisely

When the Fed slashes rates, don’t hesitate to refinance—even if you don’t pull cash out. Lowering your cost of capital gives you staying power.

Back then, my model was simple: buy flips with cash. When the crash hit, I dumped the 13 houses I had on hand and reinvested at 80–90% discounts. It wasn’t genius foresight—it was a lesson learned in real time.

They say “Cash is King.” In a bad economy, cash is the Emperor.

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