October 5 2026 | 2.5 Minute Read
I’ve learned that economic chaos doesn’t necessarily destroy wealth—it transfers it. When markets become distressed, some investors lose money while others acquire assets at significant discounts.
I think about economic disruption in five phases:
1. Shock
Everything starts with an event that changes investor and consumer behavior—such as a recession, banking crisis, pandemic, war or major economic disruption.
Fear increases, markets become volatile and people become more defensive. Investors often move toward cash, lenders become more cautious and sellers become less confident.
My takeaway: I don’t try to predict exactly what will happen. I watch for changes in behavior because that’s where opportunities can eventually develop.
2. Liquidity Flood
When a crisis becomes serious enough, governments and central banks typically respond with measures designed to put liquidity back into the financial system. This can include stimulus, lower interest rates, emergency spending and lending programs.
The additional liquidity eventually finds its way into the economy and financial markets, which can push asset prices higher.
My takeaway: I want to understand where the money is going and how it could affect real estate values, financing and investor demand.
3. Inflation
Eventually, increased liquidity and other economic pressures can contribute to higher prices. For real estate investors, inflation isn’t simply about property values going up.
My expenses can increase too—insurance, taxes, repairs, labor and materials. At the same time, higher interest rates can make financing more expensive and reduce what buyers can afford.
My takeaway: I don’t assume that owning real estate automatically protects me from inflation. My basis, debt structure, cash flow and operating costs matter.
4. Debt Stress
This is where I believe some of the biggest real estate opportunities can develop.
When consumers and businesses become financially stressed, we can see layoffs, bankruptcies, foreclosures, distressed sales and increasing loan defaults. Some owners are forced to sell good assets simply because they need liquidity.
My takeaway: I want to be financially prepared before this happens. That means maintaining liquidity, having access to financing and knowing exactly what types of properties I want to buy.
This is where I see opportunities in distressed real estate, note buying, private lending and business acquisitions.
5. Consolidation
Eventually, the weakest owners exit the market and financially stronger investors begin acquiring assets from them.
I’ve seen this happen before. Investors who over-leveraged themselves during the expansion often become forced sellers during the downturn, while investors with cash and financing can become buyers.
My takeaway: I don’t want to be the investor who is forced to sell at the bottom. I want to be the investor with enough liquidity to buy when others have to sell.
The Bigger Lesson
The biggest mistake I see investors make is scaling aggressively at the top of the market.
If I overpay, over-leverage and accumulate marginal properties when prices are high, I can spend the downturn trying to survive instead of taking advantage of it.
That’s why I use wholesaling as a filtering system. I generate a large number of leads, wholesale the properties that don’t fit my criteria, and keep the best opportunities for myself.
Wholesaling generates cash today. Fix-and-flips can generate and stockpile additional cash. But I believe the long-term wealth comes from owning the right properties at the right basis.
I’ve also learned to be patient. Earlier in my career, I bought aggressively because I didn’t want to miss opportunities. That helped me grow quickly, but it also meant I acquired some properties I eventually wished I hadn’t bought.
Today, my strategy is different:
Protect my liquidity. Avoid excessive leverage. Generate cash. Sell the properties that don’t make sense. Keep the best assets. And most importantly, be financially prepared when the next major buying opportunity appears.