With all the talk about a recession, what could you do to come out on top?

Everyone knows the quote "cash is king." In a recession this quote is more relevant than ever before. In my opinion, the best thing you can do during a recession is buy real estate with cash. Real estate has produced more millionaires than any other form of business or investing in history.

Having a focus on rental properties during a recession would be your best bet. Focusing on fix & flips for short term profit would not be a good idea unless you are very experienced. The reason for this is because the pool of potential buyers for that property is limited. However, rentals are in demand relative to buyers. Some of the advantages of buying rentals during a recession are buying at a lower prices, buying in markets you couldn't buy in before, and cashflow.

One of the biggest and most obvious benefits is buying at a lower price. Having cash to buy with, gives you a leg up on the competition because you wouldn't have to go through the mortgage process to purchase the house. The seller will likely want to get the deal done as soon as possible to stop their losses.

My favorite thing is having the ability to move into markets you previously couldn't get into due to the high barrier of entry. With a recession, those properties will fall to the prices you can afford and these neighborhoods will have higher quality tenants when the recession passes.

To add a twist to our opening quote "cash is king" cash flow is king. During most recessions, even the housing recession of 2008, rents stay relatively stable throughout the USA. So, being able to purchase these houses at a bigger discount, while the rent remains steady, your monthly cashflow increases. When the market recovers, you will still have that cashflow coming in and appreciation because you bought in the neighborhood that everyone wants to move in when things are going well.

All in all, real estate investing, during a recession, is a great way to position yourself for future success.