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#1 Lesson This Recession Taught You?

AndreiAngelkovski

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Sep 18, 2007
Messages
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Hey REIN Investors,



Would love to hear everyone's comments here.



What was the #1 lesson this recession taught you? Whether it was in your professional life, personal life, or business, this recession had an impact on everyone in one way or another. During our Beach Mastermind Group we posed the question on everyone who attended and we heard a different response from everyone. It was really interesting to hear how everyone was impacted in a different way and lessons were definitely learned.


Some of the comments heard from our group were:


Focus on cash flow and prepare for the next recession.


Do not speculate`invest!


Having an Exit Strategy is extremely important.


Best time to get a mortgage.


Just because it`s raining in one area, it does not mean it is raining in another area.


There are many investment strategies that have different impacts during recessions`not every strategy is negatively effected.


Expect the unexpected.


Some businesses boomed during the recession because they took quick action and did not sit and wait.


Live as if there is a recession all the time.



Video Blog: #1 Lesson This Recession Taught You
 

MaximeValmont

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Sep 24, 2011
Messages
138
Governments have no clue what they are doing.

I already knew it , though.





Valmont.
 

Rickson9

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Oct 27, 2009
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1,210
This recession reinforced my belief that bad times are the best times to make good money. I hope we have another recession sooner than later! I like money!
 

invst4profit

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Aug 29, 2007
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What I learned is that when the world economic situation begins to turn around Ontario will not likely be in a position to follow suite and will likely continue it's downward spiral.



The Ontario minority government is not committed to making the hard decisions that are required.
 

Thomas Beyer

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Aug 30, 2007
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13,881
I learned many many lessons.


One is that we have a lot of government debt due to excessive entitlement demands by voters and too many politicians unable to say "no way". Therefore, the only way to eradicate this massive and ever increasing debt is through monetary easing aka inflation, i.e. currency erosion. (That btw will eventually force weak European nations out of the Euro, as they cannot do that anymore as they abdicated this authority to the European Central Bank .. Did someone say 4th Reich ?)


Therefore ANY hard asset will do very well, especially those with income, such as farmland, tree farms, apartment buildings, commercial properties in good locations, mining operations or resources (oil, gas, coal, nuclear, potash, silver, nickel, gold, .. ) .




In addition nations or parts of nations with low to no debt, many new jobs and high in-migration will do far better than flat to declining population centers, especially those with large unsustainable debt levels.




The other lessons could fill a book or 3 and I am working on it.
 

Thomas Beyer

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Aug 30, 2007
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I think the lesson " having an exit strategy is extremely important" is either too basic or plain wrong. In real estate one can always sell as an exit strategy. What lesson is that ? I think a better lesson is : be flexible as assumptions, times and circumstances may change and therefore your original plan needs minor or major amendment.


I think it is good to have multiple exit scenarios in mind, but be very flexible how and when to exit as major losses can occur if you have to sell, as many (REIN members included) have found out the hard way after or during the 2008/2009 recession.


Cash at hand to hold, or cash-flow, even after rent reductions, is critical to not become an unmotivated seller.


We have learned to vastly increase our cash reserves or lower our property leverage.


Cash is King - Cash-Flow is Queen. (TM)
 

RedlineBrett

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Oct 24, 2007
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[quote user=ThomasBeyer]Cash at hand to hold, or cash-flow, even after rent reductions, is critical to not become an unmotivated seller.



We have learned to vastly increase our cash reserves or lower our property leverage.


We have made this change too and this point would be very high on my list of lessons learned.



My next one would be that diversification can save you when times get tough. If my business were a one dimensional business - ie just sales or PM or mortgages or investments then I would have faced some very hard decisions. Thankfully, with more than one way to earn a paycheque, we have grown substantially in a soft market. I think this philosophy can extend to anyone - don't be so quick to put all your eggs in one basket and always try to give yourself as many options as possible.



Another point would be that real estate is not a liquid investment and you can't day-trade in real property. So don't make short term decisions when buying it. Plan to own it for a few years and plan out your next few years of ownership!
 
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