Flip and Danny explain what triggers a recession and why affordable housing like multifamily and mobile home communities outperform during downturns. Recent GDP swung from +6.9% to -1.5%, while the Dow is down 11% year-to-date and Bitcoin down 39%. They argue now is the time to keep investing, not hold cash.
Questions this video answers
A recession is generally identified by two consecutive quarters of negative GDP.
Q4: +6.9%; Q1: -1.5%.
A positive forecast of approximately +2.1% to +2.3% for Q2.
The Dow is said to be down almost 11% year-to-date; Bitcoin is said to be down almost 39% since Flip invested.
Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies.
Yes.
There we go. Welcome to another episode of our podcast, the Reading.
Our podcast is called Freedom Through Passive Income.
Larry, one of these days, you're going to mess that up.
I know.
Well, welcome to another episode. This episode is called Recession Wealth Creation.
Yeah, I'm super excited about this one because people are fearing recession right now, and I think it's important to talk about it. There's lots of things that when we started investing, we didn't understand and we had to look up research and things like that. And more and more and more of that we're starting to talk about in these podcast episodes that we can again, just kind of expand the knowledge to those of you who don't have the time to do it. Right. That's kind of everything that we do is say, hey, we do this full time. So let us share our tidbits with you. So that way, in eight minutes a day, or 10, if I'm a chatterbox, as you say.
Yeah, chatterbox.
You can get some tidbits that will help you on your investing journey. So, first of all, do you want to define a recession?
Yes. So a recession is generally identified by a fall in the GDP in two consecutive quarters.
Yeah. So talk through what's happened.
Yeah. So quarter four of last year it was at plus 6.9%.
Yep.
And then quarter one of this year, it was at negative 1.5%. So again, you need two consecutive quarters to be negative for it to be recession. And they're already predicting quarter two of this year as being plus 2.1 to plus 2.3. So we're looking like it's like a true recession.
That's right.
But. And then they're also saying positive forecast throughout 2024. Is it in the 2% range?
Yeah. So we're looking pretty okay based on the predictions. If we hit those predictions, last quarter's prediction was off by 1 point. They predicted to be a negative 1.4. We ended up at negative 1.5%. So, you know, I haven't really studied the prediction versus actual for a really long history, but, you know, that's pretty close. Yeah, it is pretty close. So it doesn't look like we're going to hit a recession, but let's just talk about, you know, what investments are good even if we do hit a recession. And sometimes we. When we feel like this uncertainty is happening. Right. So uncertainty leads to volatility. And when volatility happens, then everybody starts to get A little fearful.
They panic.
Yeah, they panic. Yes. And they pull their money out. Dow has been down almost 11% year to date. Bitcoin. I'll let you talk about bitcoin.
I'll let you rub salt in your wounds. Yeah. So bitcoin is down almost 39% since Flip invested in it. It's true, actually. I don't think. Well, it's definitely has not been back to the point it was when we first invested in it. And I've only seen it go up and down between 29,000 and 30,000 for the last five months. But anyway, it's down, you know, it's not even in a recession yet, and that's still down 39%.
Yeah, exactly. So let's talk about what happens in a recession. In a recession, people are typically losing their jobs. They have reduced buying power due to inflation. We are already seeing that for sure. And then there's a lot of uncertainty and it continues to compound, essentially. So we're seeing a lot of effects of the recession, even though we're not as defined. We're not defined in a recession. Right. We're feeling the effects and people are fearful that we're going to be in a recession again, even though it doesn't look like we're going to actually hit it. So if we hit it, whether we don't or not, because it feels like it, what investments are good for a recession like this? It's really affordable housing.
Yeah, absolutely.
Right. So talk to people about what happens to asset classes when people, you know, feel this. The job losses, the fact that they can't buy as much as they used to.
Yep. They usually downgrade.
Yes.
They'll go from class A to class B or class B to C, C to D and such. It's, you know, or even into, you know, or into. Instead of moving from a house, a class of a house, to an apartment or to a mobile home.
Yep.
And I know we're going to talk about that here in a second, but it's, it's, it's just making it more affordable. Or moving to an area that's more affordable, especially because of remote work.
Yeah, exactly. Right. So in 2008, which they call the Great Recession, single family plummeted. Right. That's what everybody talks about. They talk about the real estate market crash. What a lot of people don't realize is that multifamily and mobile home communities, during that time, they thrived. So if you were in those types of investments, you didn't see the plummet that Homeowners and investors of single family home properties saw during that period of time, even during COVID mobile home communities, occupancy and rent went up. And Green Street Advisors said that mobile home communities is expected to outperform all other sectors throughout through 2024. So mobile.
Got it.
I actually there was a post just the other day, I sent it to Eric and I tagged him and it was somebody selling three different mobile home community parks. And I said, you know, hey, this is something that we're gonna wanna start looking at because depending on how the market shifts, affordable housing is where you wanna be and that's where you're gonna see the occupancy and the rent continue to go. And that's what you wanna be watching for. Where is the occupancy, where is the rent continuing to rise in periods of.
A recession or what uncertainty or.
Yeah, where it feels like it might be going into a recession as that uncertainty rises. You want to keep we just in an episode about 20 mile march, right? You want to keep on your 20 mile march and not stop investing, not sit on the sidelines because you're full. Yes. No. You need to put your investment continually into the asset classes that are going to be performing. Surround yourself with the people that are, understand exactly where to put the money, how to make that shift and continually be investing with them. Sitting on the sidelines is not going to do anything other than erode your cash away because inflation is, let's say eight in your what, your savings account is one. So you're losing 7% of your money.
Come on.
So you're just losing money. So just be smart. We always say invest smart, live happy. Right. It's because you want to be watching and surrounding yourself with people who know exactly where to pivot when the time is necessary to pivot. It's why we've gotten into multifamily, because we believe in it no matter what market it is. We've seen how multifamily survives and weathers any storm. Mobile home communities is going to be something that we gradually get into as well, just because of the affordable housing piece and knowing that occupancy and rents are going to be very, very strong there even if things continue to stay uncertain, maybe not even reach recession level, but. But just stay in an uncertain environment.
Yeah. Powerful stuff, man.
Yeah. Yeah.
Make sure you head on over to our website, freedomcapitalinvestments.com and join our investor club to find out all of the things that we're doing behind the scenes and if we got any deals coming in and whatnot. But make sure you're hanging out with the gang over on Facebook and LinkedIn and the YouTubers and the Instagramers and the tiktokers. We're on all of them now. But hit the like button. If you're not driving, hit the like button. And you're gonna hit the like button. If.
If you don't want us to go into a recession, everybody hit the like button.
Everybody hit the like button.
Should be the most liked episode ever. Wait a minute.
Four. All right. But we always like to end all of our episodes with invest smart, live, happy. Bye, everybody. Hey, everybody. Flip and Danny here. Founders of the Freedom Real estate group. Founders. Founders. Founders. We're the founders of the Freedom Real estate group.
That's new.
We found the founders.
Take two.
Two. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss.
