Exposing the 3 Biggest Housing Market Lies Keeping You Broke

The three biggest lies that you've been told about the housing market, not once, not twice, but over and over again by the media, by the so-called gurus, and sometimes even by people that are in the real estate business. These lies keep people stuck and they scare many investors out of buying. More importantly, they trick investors into bad investments and making terrible decisions. Today I'm going to expose the three lies in the housing market and I'll tell you the truth from someone who has been through tough, tough times and through multiple housing markets, rises and crashes over the last 30 years. So this is why it matters now. Right now you're hearing all kinds of noise. Rates are too high, don't buy. Prices are too high, wait for the crash. Or it's always a good time to buy no matter what. But most of it, it's wrong. I've seen markets go up, crash, stall out, go back to the lenders and then roar back again. And I can tell you the real danger isn't the market itself. It's believing a lot of this bad information. So lie number one, the market always goes up. This is, in my opinion, the most dangerous lie in real estate. People repeat it like it's the law of nature. The truth, real estate can and will and will again go down. And it has even most recently, especially on the commercial side. I've seen real estate values drop 30, 40, even 50 percent in certain markets. And you all know the stories of 2008 when we started buying when they were down 40 and 50 percent in multiple markets like Texas. And I've seen houses, condos and multifamily projects in the Phoenix area selling for less than they cost to build. In many cases, just trying to get them off the bank's books. In 2009, Ross and I did exactly this. We bought a 680 unit building in San Antonio, Texas, which was right near the USAA insurance company and which at the time employed over 10,000 people. It was literally across the street. So this property was 30 percent occupied and was owned by Bank of America at the time. So the bank owned the note. The investors had already lost their money, but the property was a mess. It had all kinds of work to be done on it. And of course, when you buy something like that, it's negative from day one. It does not cash flow. 30 percent occupancy doesn't even come close to paying expenses, not to mention any kind of a mortgage. We negotiated the loan and bought that property. And then we put about seven or eight million dollars into that deal. And when the dust settled and it all stabilized, we had fixed the property, fixed the neighborhood, created an incredible renovated property right near USAA, which was also a great place of employment. And so we filled it up rather quickly and the investors won, we won. And all in all, we increased the value of that property significantly, which benefited not only myself, but my investors, the bank, the neighborhood, everyone involved. You can do this exact same thing. So, yes, over the long term, well-bought real estate in strong markets does tend to appreciate. But if you buy wrong, wrong price, the wrong location or wrong financing, you can be upside down for years, which is exactly what's happening to many people today. So the truth is, do not buy because you think prices cannot go down because they can't. Buy because the property works today, because it cash flows and it makes sense on today's numbers. And you've underwritten that property conservatively. And of course, you have some reserves. You need to make sure it's in a great market with good fundamentals and there are people coming that are going to rent your property to save the day. So the mistake to avoid, banking on appreciation to bail out any kind of a bad deal. Do not do that. Gold is near all time highs, but appreciation isn't the only way to benefit. Monetary metals, you could potentially earn a yield on your gold paid in physical gold without selling it. Here's how it works. When you lease your gold through their platform, pre-qualified companies pay to use it under strict guidelines, like renting out real estate, but with gold, instead of paying to store your metal, you may earn up to 4% annually in gold. You stay in control and you can choose which leases to participate in. Monetary metals handles the due diligence, lease terms, and all the administration. Thousands of investors use this approach to grow their gold, not just sit on it. Visit monetary-metals.com forward slash Ken to learn more. Leasing gold involves risk and returns are not guaranteed. This is not an offer to buy or sell securities. Please review all risk disclosures at monetary-metals.com. Visit monetary-metals.com forward slash Ken to learn more. So lie number two, you should wait for the perfect time to buy. This is a lie that keeps people stuck on the sidelines for years. They're always waiting for something. Rates to drop, prices to dip, the market to stabilize. Here's the truth, there is no perfect time. In 2008, people were saying, don't buy now, the market is too risky. Now looking back, that was a mistake. In 2012, when things started to stabilize, those same people said, don't buy now, prices are going up too fast. And in 2020, those exact same people again said, don't buy now, the economy is too uncertain. Those are all truths. And if you would have listened at any of those points, you would have lost out on one of the greatest times to buy real estate in my lifetime. If you keep waiting for the perfect moment, you'll miss deals in every market cycle. So let me give you a real example. Back in 2010, Ross and I bought a 208 unit apartment project in a so-called terrible market. The banks at that time were still skittish after the crash, rightly so. Unemployment was high. And if you guys remember, this was a rough time for a lot of people. And every news headline was telling people to stay out of real estate. So we picked up that property for about $16 million, about $80,000 a door, way below replacement cost because nobody else was making offers. It wasn't a perfect property. Yes, it needed some renovations. It definitely had some vacancy and some operational problems, but we knew how to fix those. But the fundamentals were there. It had strong rental demand. It was in a good location. And it was a price that worked on day one. And it cash flowed more importantly. So we renovated the units, improved the management, and raised rents over a long period of time and not for the first few years. So fast forward a few years, that property today is worth over $30 million. And it's been cash flowing the entire time. And we've even refinanced it two times. And we still own that property today because the hardest part is actually finding an asset that cash flows for you. I know people that were looking at that property at the exact same time. And they passed because they said the market's not quite ready yet. But they kept waiting for prices to drop further. And I totally get this. I do. But instead, when we bought that property, we built safety nets in there so that we could buy it no matter what was going on with it. And eventually, that market did take off later. The truth is you don't make money by perfectly timing the market. You make money by buying good deals that cash flow in any market at any time. And then you hold them long enough, and you have the cash reserves for the market to play itself out. If the numbers work and the fundamentals are solid, the perfect time is now. So if you want to know exactly how to structure your own portfolio so you can buy in any market, I put together something that I wish I had in 2008. The Recession Survival Checklist. It's step-by-step guide of securing your income and staying in the game no matter what happens in this market. And it's completely free. Just click on the link below. All right. So now let's head to the third lie. High interest rates mean you shouldn't buy. This is the one I'm hearing from everyone right now. People say rates are too high. I'm going to wait until they drop. But here's the truth. Interest rates are only part of the deal. I bought incredible properties back in the day at high interest rates because the price, the cash flow, and the value add opportunities were still there. It's the property still made sense, even at the higher rates. So if you go back and look in 2008, 9 and 10, interest rates were very similar to where they are today. And then Ross and I got the benefit of interest rate cuts over that next period of time as the government was starting to unwind from all the property blowups and all the nonsense that was happening as these properties were moving from the individual back to the bank. So that was a gift. But we did benefit from that as rates started going down. We were hedged on the rates not going up any higher because they were fixed. But as they started to go down, Ross and I just kept refinancing at lower and lower rates. And today we even have some of those rates under 3%. So when rates are high, competition oftentimes drops off. That's good for you because when you're buying, you want less competition. That means less bidding wars, more negotiating power, and sometimes even lower purchase prices. And I'm seeing all three of those going on right now because as you guys know, we bought over $500 million of real estate this year alone. And remember, you can always refinance if the rates do eventually drop. So the truth, focus on the entire deal. Focus on the whole deal, not just the interest rate. If it cash flows today, it's worth considering. It might not be worth buying, but it's worth considering. So let's recap the three lies and the truth. Lie number one, the market always goes up. The truth is it can go down and it will. Buy for today's numbers and not for tomorrow's hopes. Lie number two, wait for the perfect time to buy. There is no perfect time. Buy when the deal makes sense. Lie number three, high interest rates means you shouldn't buy. The truth is, look at the whole deal. All of that matters way more than just the rate. And here's the thing, one of the best ways to win in every market is knowing how to use debt the right way. I'm not talking about bad debt. I'm not talking about debt that you use to buy depreciating assets. This is the good debt, the kind that makes you rich. And there's a very big difference. So in the next video, I'm going to show you exactly how I use hundreds of millions of dollars of debt to create cash flow, build wealth, and pay almost no tax legally. If you're interested in that video, check this out.