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Property Brothers describe the real estate investors most likely to get hurt by a downturn

Homebuilding last month leapt to its highest rate in 12 years, newly released construction data says. But the havoc wrought by last decade’s housing bubble has buyers wondering how to protect themselves if the market goes south.

Drew and Jonathan Scott, co-hosts of the HGTV show “Property Brothers,” offer simple real estate investment advice for the moment a market downturn approaches: Find the sweet spot between panic and patience.

“If you are organized and you are keeping up on what's happening in the market and you're seeing indicators of what's going to happen, I think you can play it a little safer,” Jonathan Scott told Yahoo Finance Editor-in-Chief Andy Serwer.

“Whereas I think people all of a sudden freak out. They panic. They want to sell,” he says.

Cautioning against the opposite miscalculation, Jonathan Scott adds: “People who are affected the worst when something like that happens are the people who react too late.”

Drew and Jonathan Scott made the comments during a conversation that airs in an episode of Yahoo Finance’s “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

Born in Vancouver, they came to prominence fixing up homes in HGTV reality series like “Property Brothers” and “Brother vs. Brother.” Each week, 18 million people watch them in 160 countries; another 10 million follow them on social media. They’ve capitalized with a line of home furnishings and a digital home-design service.

Drew Scott, a co-host of HGTV's "Property Brothers," appears on Influencers with Andy Serwer.

The most precarious investors are those who stretch to afford a property outside of their budget, Jonathan Scott said.

“Anytime you make an excuse to buy a property, like, oh, well, maybe this isn't the best time, but I'm going to make it work, and you overleverage,” he says. “That's when you lose your shirt.”

Jonathan Scott’s twin brother, Drew, offered similar warnings for those who overspend for a property that puts them in a tough financial position.

“We work mainly with homeowners,” he says. “They have their one big investment in their life, their home. But if they're not overleveraging to get into a new house, if the market's going up and down a little bit, well, you can protect yourself. You're only going to miss out if you're forced to sell.”

In 2008, when the housing bubble burst, the Property Brothers escaped nearly unscathed, Jonathan Scott said.

“There were a lot of people who lost a lot of money,” he says. “We were fortunate when the crash happened, at that time we only had one property left at the time.”

“We knew people who were picking up on housing and they lost out big, because they didn’t have any of their own equity, it was all loans,” he adds.

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Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.

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