How To Make Money In a Crashing Market: Real Estate
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How To Make Money In a Crashing Market: Real Estate


Steven, can you make money when the market
is crashing? – Absolutely and we’re going to talk about
exactly how to do that right now. – You know, it’s interesting when people say
that sky is falling, the stock market is crashing, it’s the end of the world, the interesting
thing is that the people that run the world, the people that have the money, the people
that know, they understand that that’s nothing more crash equals biggest opportunity. – Yeah, I want you to for a moment to start
thinking counter-intuitively, counter-cyclicly in other words, when everybody else is freaking
out and they’re selling their properties, what’s the right thing for you to be doing
right now? – If everyone is selling, you got to be buying. When everyone’s buying, you got to be selling. That’s Warren Buffet’s play but that’s the
playbook out of what the wealthy simply do. So we’re going to talk about market cycles,
we’re going to talk about how to make money in the crash. But let’s just back up first and get super
big picture. Right now, economy is just like human development. We have spring, summer, fall, and winter and
we never go spring, summer, fall, spring, winter, fall. They move in a predictable patter and right
now we know that we are in out last biggest fall out in 2007, before that was 1999 and
the market is always going to be moving in these cycles and you’re either prepared for
it, anticipating it and working in tandem with it or you’re behaving like a consumer
that gets crushed by it because by the way, people that just have the money in the stock
market get crushed. People that buy real estate without having
rules for protection when a market crashes, they’re going to get crushed. Majority of people get crushed because they
don’t know how to play the market. Now, Steven, before we go dive deep into this,
we’re two young guys, we’re on our 30’s, people might be like, “Who are you guys to talk?” Well you’re talking to two guys that help
thousands of people after the 2007 crash, purchased thousands of properties in the worst
crashing markets and we were buying homes that were selling once for $300,000, $250,000
for $70,000 or $100,000. We helped our clients make literally tens
and tens and tens and tens and tens and tens of millions of dollars and so, here’s what
we know, it’s going to happen again and either you’re prepared for it or you’re not and we
hope this video will get you prepared for it. – So for me, there’s like 2 different scenarios
that we want to talk about. Number one is, you have real estate in a certain
market and it’s crashing or it’s crashing and you haven’t bought homes in that market
and you want to get into it or figure out how to handle this crashing market so I’m
talking about the first. Let’s just say that you owned a property and
all of a sudden you find yourself in a situation where the market is crashing, what do you
do? Well I think the mentality of most individuals
is when the market is crashing that means I need to pull out, I need to get all my assets
and I need to take it back, this is often what you see happening in the stock market,
right? You hear the whisperings and the rumors that
are going around, everyone’s saying “Hey, guys. Be careful because the market is going to
crash.” Well, because of all those rumors, because
of all that information, you get scared, you play off of your fear so you pull your money
out of the market, that literal, that action of pulling your money out of the market along
with thousands or hundreds of thousands of other people doing the same thing at the same
time causes that market to crash. – You cannot move with the masses, moving
with the masses will hurt you every single time. – No fear like, do not do your actions based
on fear, right? So if you got your property and the market
is crashing, I will tell you, first of all most people don’t know. Is it a market crash when the market is crashing,
your rental property, if you bought it the right way, if you bought it the way that we’ve
been talking about teaching over the last many years now, you’re actually in a really
good space because you’ve got a property that’s going to continue to produce for you and where
if your investment had been in any of the other investment, it would have gone down
with the crash although, the equity in your home on paper may have gone down, you’re still
getting a monthly cash flow. – Yeah. In fact, even the opposite happens when the
market is super strong, your rental market is soft but the opposite happens and the crash,
the rental market becomes very very firm so rents can increase, it’s easier to put people
in homes, people are looking for rentals. So it works if you have properties purchased
below the median which is more of our tagline. You’re going to have to watch many videos
before you can hear it over and over and over and over again that the price point to buy
properties is really what matters the most and so, Steven and I, we’re always encouraging
people, whether you’re using our system or your own system, buying backyard real estate,
purchase property below the median. Why? Because that means that’s where you have the
largest number of people that will actually move and sell and make property work which
means when the market crashes, you’re going to find everything over the median, tank,
you’re going to find the median lower, you’re going to find homes under the median, they’re
going to get a blip on the radar, they’re going to get a bump. $100,000 doesn’t go in to $10,000 but a million
dollar home can turn into half a million dollars. So anything over the median is going to crash
real hard. Now, Steven, let’s talk about where we’re
at at the market because 2007, that was over a decade ago and I remember what October of
that looked like, we’re over 10 years pass that, we know things move in cycles and I
got to tell you right now, spring becomes summer, summer becomes fall, fall becomes
winter, winter is when things crash. Where are we at at the market right now? – Yeah, it’s an interesting conversation and
I don’t ever think that I have a crystal ball necessarily, you know, these cycles, although
they do happen, it’s hard to really predict exactly where we might be but – No one can,
no one knows the future. – No one can but if you look at trends and
what happens, we’ve experienced the winter, right? We’ve experienced that 2007 and 2008, we’ve
seen some growth back, we’ve gone through some spring, we’ve gone through – Oh my gosh. Yeah, construction happening everywhere, low
housing availability. – No doubt, no doubt. And I think right now we’re probably in fall
and I don’t know if we’re in the beginning or end of fall right now but we’re kind of
in the fall-ish area. – And with fall, we’re almost in that suspended
animation, right? We’re printing money, interest rates are artificially
being held extraordinarily low and all that’s happening to avoid the inevitable. And the inevitable is that there’s going to
be another crash and it’s not the end of the world but you got to be prepared for it because
there’s a way to take advantage of that, we can take advantage of any market and one of
the mantras that I have in life is that winter is coming and I’m ready for it, I crush it
in winter. If your business can survive winter when most
things die, then you can crush it in any other market time. So winter makes champions and it makes warriors
and it finds out who are the strong that are really going to survive in the evolution of
business and in the real estate game, if we’re in fall, now is excellent. Every season is a great time to buy real estate
but how do you get prepared? You get prepared that the property that you
are buying you might hold on too longer than you think, you buy below the median so you
keep it rented out ad when the market crashes, it’s just simply not time to sell, it’s like
Steven said, it’s time to cash flow. – So let’s say that the market is in its crashing
phase and you want to still get into real estate well, usually that crash isn’t going
to last years and years and years, right? SO the crash will typically happen over a
shorter period of time and then things will kind of stabilize down in a certain point
and when that happens, one of the things that I can tell you right now is to be prepared
and this is kind of what you and I have had conversations about. Man, if we could turn back the clock to 2007
and 2008, although we did get in those markets and help a lot of people make a lot of money,
one of the biggest regrets is that we wish we have done more. – We absolutely could have done more and I’m
talking about now even in just my own financial world, my personal asset allocation, you never
put all your eggs in one basket. Right, there’s a system of diversity. Nate, remind me, we got to do a video and
talk about how people like, what financial bucket people should be putting money in because
one of the buckets really is this financial ability and this is what you need to know. There’s a certain amount that you’re going
to put into that growth bucket with real estate and I’m telling you that in 2007, 2008, 2009,
I did not allocate enough funds there. If I had to go back, I would have put way
more there because the homes that I did buy, I crushed it. My ROI’s, I was making 30% plus a year on
my money over a number of years and I only wish that I had bought more. You never put all your eggs in one basket
and you don’t just buy as much as you can so how you get ready to crush it when the
market is taking is, around the country, you’re going to see that all markets perform different,
there’s no such thing as this national crash. I mean, we can all experience that roughly
together but you’re going to see that some economies localized are going to experience
way more crash. For us, in our area around the nation, Vegas,
Florida, and Phoenix, those are the three markets that took the worst beating in 2007
but these were on new homes during a massive build up that had to rebuilt. How do we know that they had to rebound? Because people still making babies and people
are going to be needing houses and when population is on the rise, people may go 5 years without
buying but we’re building really a back log of, we got to get it back in and you can’t
buy house for less and it can be built so by the way, if you can buy a house for a hundred
grand that cost $200,000 to build, it’s just a matter of time before the market reevaluates
and it doubles so Steven, when you have this next crash coming, you and I, we’re going
to be looking at, what are the markets that are most devastated? Especially the ones that have natural strong
economies, good business growth, good economy but also had new build’s and we want to buy
as much new build’s than crash as possible because they are a guaranteed first comeback
when the market re-stabilizes. – Yeah, I think it’s important to understand
like you just said. The market, when the markets crash, there
are many markets around the US that are not crashing or not experiencing that same type
of crash, Phoenix, Vegas, Orlando like you just said. They all experience that massive crash. Here in Utah, we experience that tiny little
hiccup. In other words, there are still markets around
the US even if your market is crashing, you can get into and make a lot of money even
as though other markets are crashing. – Well and now, here we are a decade later
and we’re still buying homes in Florida at this ridiculously low prices. That market hasn’t still fully come back. It’s been moving, it’s been shaking but we
have such strong rents out there, that’s one of our hot markets. North Carolina is a hot market. Cash flow markets, Memphis, Tennessee, Indianapolis. By the way, if you’re looking for a team that
has experience making money when the market is tanking, click up here in the corner and
actually get in touch with us and learn about our systems because we’ll show you how to
buy properties right now, still in the market so there’s always markets reevaluating which
means the crash was 10 years ago, it might as well been yesterday because there’s always
a way to buy the best real estate right now and we’re still doing it for our clients and
nothing that happens in the market is going to change that because this is 3,000 year
cycle called the K-wave or the Kondratiev cycle, it was submitted as an economic theory
from a Croatian man, Kondratiev. And if you study the K-wave cycle, it’s astonishing
and comforting to realize, wait a second, it’s not the end of the world, it’s just the
end of the season and then we’re going to shift into the next season and there’s no
reason why your temporary losses in the market can’t actually turn into your greatest games
after everything’s been taken into account. So friends, that’s how you make money in crashing
market. Markets come and go, they go up and they go
down. They cycle through the seasons of life and
now you really know first of all how to make money in the crash but how to make money during
any season because remember, if you can rock it out and win in winter, then you know how
to win all the rest of the time.

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