Here are the 5 steps to prepare for any real estate market downturn or crash:
1. Stay lean.
2. Get training (#1 Investment)
3. Make money.
4. Stash cash.
5. Prepare to get wealthy.
Here we are in 2018. If you have been in real estate for less than 10 years, you've never been punched in the face by a bad real estate market, by a bad economy. And yet, we know this about history. It always repeats itself.
Hi there. It's Kevin Ward, the founder of Yes Masters Real Estate Success Training, helping you get more yes's and more successes in your business and in your life and even when things come crashing down, you wanna win. When I started real estate, back in the 1900's, we were just coming out of a downturn in the real estate economy. Things were still not really going great.
When I got in, things were getting better. I got into real estate in 1998, when things were getting better and getting better and getting better. For eight or nine years, I got to ride an appreciating market, a housing boom, like we had never seen and we thought it was cause we were awesome. We thought it was cause we were good. We thought we were smart. We were making lots of money.
When 2007 happened, everything fell apart. I was unprepared for it. I was in denial that it could ever happen. I had never seen a rainy day. When they said, "You know, save your money for a rainy day," I'm like, "What's a rainy day?" We didn't even know what that was. Here we are in 2018. If you have been in real estate, for less than 10 years, you've never been punched in the face by a bad real estate market, by a bad economy. And yet, we know this about history, it always repeats itself. Just like the waves behind me, the reality is, wave follows wave, follows wave. Just like you're gonna get a wave of appreciation at some point, it's gonna crash.
In this video I wanna talk about five steps to prepare yourself for the next real estate crash. Now, first question is like, Are you saying that a real estate crash is coming? Well, I'm saying a real estate crash is coming. When's it coming? I don't know. We're seeing signs. We're seeing red flags. You're seeing reports. It's starting to be talked about, that there are signs of a slowdown, that the market is slowing down, maybe turning in some areas, there are different things happening, days on the markets doubling, number of expired listings is tripling. Just, wherever you are, there's red flags that something could be happening.
Now, to me, that is not the time to be getting ready. The time to be getting ready is before the crash starts happening. Right now wherever you are, what I'm about to tell you is urgent and it is critical that you get prepared. You go, "I don't think there's gonna be a crash like there was back in 2007." Neither do I.
Some of you are thinking, "I don't think there's gonna be a crash at all. I think maybe a slow down, maybe a little correction, but is it really gonna be that bad?" Again, my answer to that is, I don't know. I don't put on my seatbelt every time I get in the car, expecting a crash. I put on a seatbelt in case there ever is one. I wanna be prepared. That right? You do too.
If you are prepared for a crash, and nothing happens, you're gonna win. If you're prepared for a crash and the market crashes, you're gonna win. If you're unprepared for a crash, when it happens, you're gonna be crashed. That's what I wanna help you avoid. Let's talk about the five things to do, to prepare for the real estate market crash.
Number one, is stay lean. In your business, stay lean, or if you're not right now, get lean. What I mean by that is, you want your business to be a streamlined, lean mean profit generating machine. You do not wanna get your business fat with overhead. What a lot of real estate agents do, every time that there is a booming market ... We've been in a booming market. Every time that happens, agents tend to get fat. They start building mega teams, they start hiring a lot of people. They take on big office rents. They get a bigger, fancier car. They buy fancier equipment. They get fancy toys.
All that's awesome, but just make sure that whatever you have, that if the market turns, and if worse comes to worse, you're gonna be okay. When the market turns, you wanna be prepared, that you're not having to hurt a lot of people, that you're not having to slash a lot of things, loose a lot of stuff. You wanna be prepared for that. The best way to do it, is to stay lean. The way I look at it is, is instead of trying to build an army business, I wanna build a special forces business. It's all about profitability, efficiency, and that what you have gets maximum productivity out of everything that you have. Number one, stay lean.
Number two is get trained. Get coached. Get ... Invest in your greatest asset. The number one most valuable asset in your business is you. You are the most valuable asset in your business. Doesn't it make sense to invest in your number one asset, in yourself to get the skills, the strategies, the systems and the support, and the mindset, so that you can win in good markets, and win in bad markets.
Right now, when the markets great, it's easy to get listings. It's easy to get sales. If you're looking around and going, "Yeah, but I'm still not getting a lot of business, or as much business as I want," you gotta get trained. You gotta get at a higher level, because when it gets harder, you gotta be better. Number two, is get the best training, get the best coaching that you can get.
Number three. Make money. Make money. You wanna make hay, while the sun is shining. Right? I'm from Texas. That's where they used to make hay while the sun is shining. When things are good, you want to crush it, so that when the market turns, you're already in a position of momentum and positioned in the market with market presence, so that you can continue to get more business. There's gonna always be great opportunities out there. You just wanna be in a position that you capitalize on all of them. Number three, make money.
Number four is stash cash. That means, as you make it, you wanna keep a lot of it. The tendency, the temptation is, when you're making a lot of money and things are going great, the temptation is to spend a lot of money. You wanna be prepared. You're repairing for when the market turns, so you wanna stash cash. One, you wanna stash cash for survival, which means you wanna have bills paid. If the market turns, and you have a bad month, or you have a bad quarter, that you're not in trouble.
You wanna have minimum of three months of a cushion, financial cushion in the bank at all times. Six months will let you sleep at night. Six months of spendable cash, to support you for six months in a market downturn. Now, that is just so that you come from a position of strength, not a position of survival. It's more than about surviving. You don't wanna survive in a downturn. You wanna thrive in a downturn. You wanna put yourself in a position where, if something happens, you're gonna be okay. When the market crashes, are you gonna go down, or are you gonna rise up?
Number five is get ready to get rich. Get ready to get rich. What that means is, that the greatest opportunities to create wealth, the greatest opportunities to take a quantum leap forward financially, is in market downturns, not market upturns. When markets crash, and most people go broke, that is when the greatest opportunities to create wealth are made. If you're not ready for it, if you're not prepared for it, then you're gonna be in survival mode.
It's what happened to me the last time it happened, back in 2007 is, I thought ... I was just ready man. I was making money. Things were going good. I thought everything was gonna be perfect. When the market crashed, I was blindsided. I did not see it coming. Not only was I just fighting for survival, but even if I had seen it coming, and seen the opportunities, I would have not been in a position, cash-wise, or strategy-wise, to be able to take advantage of it.
Right now, get ready for what are you gonna be looking for. What are the opportunities you're gonna take advantage of, when the market crashes. Are you gonna be looking at picking up properties for pennies on the dollar when that kind of correction happens? You're gonna be in a position where you can do that if you've done the first four things. If you've gotten yourself ready, you're trained, you're making money, you're keeping money.
You wanna be cash heavy, when a market goes down. That's the time to buy. That's the time to invest, because when it starts going up again, you're gonna be cleaning house. Look, I don't know when it's gonna happen. My crystal ball broke in 2007. I ain't never got it back. I can guarantee you, neither have you, and neither can all the other people out there. They're prognosticating and say, "This is gonna happen. That's gonna happen." Some people right now, are doom and gloom.
Others are going like, "No. They're full of crap. It's not gonna happen. We got another two years." Some are saying, "No, it's happening right now." Some are saying it's gonna happen somewhere in the middle. None of that matters. All that matters is, that whatever happens, and whenever it happens, you are ready. That's my message for you today, is get yourself ready by doing the five things we talked about, so that when the crash comes, however big it is, or however small it is, you win.
If you have any questions or comments on it, make sure you post them down below. If you disagree, if you got a rebuttal, post it down below. I'd love to hear what you got to say. If the video's helped you and like it, make sure you give it a like. Subscribe to the channel if you haven't done that already. I look forward to seeing you on the next video, where we'll talk about how to help you get more yes.