REM48: Which is a Better in a Recession: Debt or Equity? w/ Heather Dreves

Would rather hold real estate debt or equity during a recession? Obviously, there is no simple answer to this question, and it always depends on the specifics of the deal, but regardless of your choice, investment strategies need to change with the times…Today’s guest has seen about a 20% drop in real estate prices from recent highs, as a holder of both residential debt and equity, she’s not too worried. Heather Dreves is the Director of Funding and Fund Manager at Secured Investment Corp, where she oversees two portfolios of both debt and equity residential real estate investments across the U.S.A. for accredited and non-accredited investors. Before The Fed’s recent rate hikes, most of her borrowers were fixing & flipping properties, but as values started to come down, she has seen a shift toward fixing and renting the houses out instead of selling at lower prices, which is a pivot she is also doing in her equity portfolio!An advantage of holding debt during a downturn is that you continue to receive your interest payments even if values go down. However, you also carry the risk of having to foreclose on a distressed asset in the worst-case scenario. Equity owners have the advantage of continuing to collect rents during a recession. However, there is always a chance your tenant won’t be able to pay, leading to eviction, or you might struggle to refinance your loan at high rates and lower value. Luckily for Heather, she gets the advantage of owning both and has the expertise to work through problems on either side because she is an expert in both!What do you all think: Debt or Equity? Tune in to hear, Heather and I talk about both!Keep Making Milestones, Ben MalechSubscribe to my Mailing List!!!! Click HereIf you want to learn more about Heather, you can find him at:LinkedIn: https://www.linkedin.com/in/he....ather-dreves/https:/ learn more about Ben, connect with him through:Ben’s Website: https://benmalech.com/Ben’s LinkedIn: https://www.linkedin.com/in/benjamin-malech/hBen’s email: benmalech@carswell.io