As the market turns, new opportunities will show up to buy existing businesses or real estate.
The music will stop as owners:
- Fail to pay down debt from EIDL or more expensive working capital lines,
- Deal with the fall-out from inflationary costs in their supply chain, or
- Cannot compete with the changes in their industry like:
- Retailers getting their lunch eaten by fast fashion players like @SHEIN and @Urban Revivo, or
- @TikTok upending how advertising dollars are spent to gain the attention of the audience
What businesses or assets should you consider buying that should thrive in a recession?
- Boring Businesses – Ones that don’t require heavy equipment reinvestment and have recurring cash flow – Think laundromats, vending machines, and landscape service providers.
- Commercial Real Estate – I can write several articles on this one, but the replacement value holds over time meaning you can ride the inflation to your benefit. Multi-family and Industrial property types remain the darling of the industry. The value-add opportunities may present themselves in retail and office as the market changes and finds new ways to use vacant space.
- Bridge Lending – There are attractive bridge funds like @Arixa Capital and @Pangea Mortgage Capital that write loans against residential and commercial real estate. These funds offer investors stable cash flow and capital preservation since there is a margin of safety by staying in the 60-65% loan-to-value range.
Needs more tips or analysis on a business or piece of real estate you want to buy? Give us a call today.
