Right now, some investors are making fortunes while others are losing everything. Same market, same economy, completely different outcomes. The difference isn’t luck, it’s strategy.
After more than 30 years in real estate and owning over 10,000 apartments, I’ve learned the plays that work not just in good times, but also in downturns and everything in between. If you stick to these five fundamentals, you don’t have to guess where the market is headed. They’ll protect you in a recession and help you grow in a boom.
Here are the five plays that I use in every market cycle.
1. Buy Where There’s Little Competition
Scarcity is your friend. Early in my career, I learned this the hard way. I bought into a condo complex in Las Vegas where hundreds of owners were trying to rent out nearly identical units. At any given time, I was competing with dozens of landlords for the same tenants, which wiped out my cash flow whenever I had even one vacancy.
The lesson: even a great property on paper can underperform if the market is oversaturated. When tenants have fewer options, you can hold pricing, protect margins, and avoid unnecessary concessions.
Investor takeaway: Avoid crowded markets, even if the price looks attractive. Less competition means stronger negotiating power and more consistent income.
2. Create Forced Equity
Forced equity means increasing a property’s value through planned improvements or income strategies that you control, not by waiting for the market to rise.
For example, one portfolio we acquired wasn’t billing tenants for utilities. By implementing a utility billing system, we added $500,000 in annual income, which translated into a $10 million increase in property value at a 5% cap rate.
In another deal, we installed washers and dryers inside units for $150,000. That small investment generated $120,000 a year in new income and boosted the property’s valuation by millions.
Investor takeaway: Only make improvements tenants will pay more for. Cosmetic upgrades may look nice, but they don’t always translate to higher rent.
3. Buy Cash Flow First, Appreciation Second
You can’t pay your mortgage with future appreciation. Too many investors get caught speculating, hoping a property will go up in value. That’s gambling, not investing.
Cash flow is the safety net that keeps you alive during downturns. One property I passed on looked perfect until I factored in higher property taxes and insurance. That deal went back to the bank two years later. If I had bought it, it could have sunk me.
Investor takeaway: Numbers first, emotions second. If a deal doesn’t cash flow with conservative underwriting, walk away.
4. Use Fixed Rate Debt to Hedge Inflation
Debt itself isn’t the problem. Bad debt is. Fixed rate debt is one of the most powerful tools you can use as an investor. When you lock in a low rate, your payments stay the same while rents typically rise with inflation.
That widening gap increases your cash flow year after year, and your tenants are the ones paying down the loan. Inflation hurts savers, but it rewards property owners with fixed debt.
Investor takeaway: Match long-term holds with long-term fixed rate debt to protect yourself from interest rate shocks and inflation.
5. Keep an Emergency Cash Reserve
This one isn’t flashy, but it’s a game-changer. Too many investors drain reserves for distributions, leaving themselves exposed. Vacancies, repairs, rising expenses, or sudden market shifts happen all the time.
When the pandemic hit, my partner Ross and I already had three months of operating reserves for every property. We later increased that to six months. While others froze, we kept operating and even went on offense by looking for new deals.
Investor takeaway: Reserves aren’t “lazy money.” They’re insurance that gives you options when others can’t act.
Final Thoughts
You don’t have to predict the market to be successful in real estate. If you consistently:
-
Buy where competition is low
-
Create forced equity
-
Prioritize cash flow
-
Use fixed rate debt
-
Keep strong reserves
…you’ll be in a position to win in any cycle.
Real estate wealth is built on fundamentals, not guesswork. Stick with these five plays, and you’ll be stacking wins no matter where the market goes next.
