How To Make Money From The 2021 Housing Crash

we’re going to be talking about the upcoming 2021 housing crash and how you can prepare and profit from it

so i made a video about the upcoming housing crisis about three months ago i talked about when i think it will happen and how it will happen so in this video i wanted to give a quick recap of my thoughts and how to actually prepare and profit from it stay tuned okay so let’s talk about why the housing market hasn’t crashed yet then i’m going to talk about why it will crash and then i’ll get into how to prepare and then how to profit make sure you watch until the end of this video

so the first reason why it hasn’t crashed is simply because of forbearance as i mentioned

in my previous video homeowners can’t get foreclosed upon until december 31st of 2020.

the second reason is low supply so this is a combination of two things it’s a combination of

forbearance meaning houses aren’t coming onto the market or being foreclosed upon or going to short sales or being sent to auctions number two

is because it’s a huge demographic shift going on

baby boomers simply aren’t selling their houses they’re they’re actually the second biggest population cohort in the united states can you guess what the first is it’s me

millennials people that are actually having an appetite for buying you know their first home their starter home or a forever home if you will so there’s low supply and high demand number three

evictions are paused okay so evictions have been paused through the end of august and september in some states meaning that you have a 30-day notice to get out so if you’re being served and at the end of september that means you have all of october to kind of get your stuff out and move

then we’ll start to see some pressure so people or

the tenants are actually still in those homes and they’re not getting evicted and then number four is low interest rates i talk about this in a lot of my videos because it is the single biggest lever in the economy it drives most

investing decisions rates are low so people can afford more house in their monthly budget

which also adds upward pressure to demand

so let’s get into the next slide of why it will crash

okay so here are three quick reasons why the market eventually will have to crash or correct let’s let’s use correct because crash is one of those clickbaity words that i can’t stand

even though i’m probably gonna use it in the title of this video so forbearance ends so no

for bear ants get it uh someone told me in my last video that

uh i should draw a bear and an ants this is terrible don’t even pay attention this

so forbearance ends this is a dam that is holding pent

up foreclosures and pent up short sales lenders will start to take back properties and will either be with an agent or it’s going to go to auction which i’m going to talk about later in this video

number two is that supply increases so once the supply starts to increase from a flood

of these properties millennials like myself can purchase their first home their forever home

you know their second home etc etc thus lowering

the demand thus lowering existing prices in the market

so when demand falls the prices of existing inventory

naturally has to fall because it’s the law of supply and demand

and then finally number three unemployment is historically high okay i’m not saying it’s at an all-time high but it’s high right now because everything that happened in march

so if you look at the u3 unemployment it’s at 8.4 percent

if you look at the u6 unemployment it’s at 14.2 percent

so you can see that it’s declining if you take a look at this chart but it’s still historically high

so in my opinion this is another indicator that people may get foreclosed upon

or it actually hurts demand for existing house shoppers out there because they simply don’t have a job

so when you have no income the last thing you’re going to do is look for a house you’re going to look how to you know put food in your stomach keep the lights on and go to work or at least get a job you’re not going to be house shopping so with all this being said

how do we prepare for this crash okay so how do we prepare for the 2021 housing crash this is very simple you need to build your war chest

i actually made a video in august of 19 saying how you should prepare for the upcoming 2020 market crash

and guess what happened just a few months later obviously we know that the market crashed

so a lot of these principles are going to be the same so

number one is cash if you have cash on hand it kind of sucks because you are a loser

savers are losers if you watch my other videos and cash

is trash however if you have a goal or a strategy to utilize that cash right now cash is king if you know that you want to buy properties in the future if you don’t have cash on hand and say it’s invested in the market or you already have it tied up somewhere if you do have equity in your existing homes or existing home excuse me a heloc and a home equity loan are two good options

so if you don’t know what a heloc is that simply stands for home equity line of credit

this is a revolving line of credit against your house or against the equity of your house

just like a credit card so you can draw money as you need it and then you can pay

the interest off interest only or you can pay off the full amount as you go so this is a good way to scoop up some off-market properties or properties that are

extremely discounted because of the crash

third is a home equity loan this is essentially the same concept as a heloc except that this is a fixed amount it is literally a loan against your home against the equity in the home so this can be a fixed rate it can be adjustable rate and then you’re essentially unlocking the equity in your home

so if you have if you own your house outright and it’s worth a hundred grand you can typically take up to 80 percent loan to value so you can take the dead equity that’s sitting in the walls of your house and unlock it with a home equity line of credit

or a home equity loan does that make sense

and then finally we have friends family and fools so you have

friends you can get money from family you can get money from

and then a fool that will you know lend you money that actually thinks you know what you’re doing but we both know that you don’t

i’m just kidding this is basically known as opm

other people’s money so basically you can ask people that you know that are close to you hey let me borrow this at a certain interest rate

you get you acquire the property and then you pay them back at a lower amount than a bank would give you at a certain interest rate

getting it from them makes sense let’s move on to where to find these deals next

okay so where do we find these deals once the market starts to correct or crash or whatever terminology you want to use

so number one are sheriff sales or sheriff’s auctions

these are typically auctioned off by the county on a specific day of the week where i live there every monday morning however there are a couple caveats one you have to pay with cash or you have to have that full amount in closing so if you get the property for a hundred grand you have to come up with a thou hundred thousand dollars within a certain time frame

number two is that you typically don’t have access to these properties so typically if the property is occupied or unoccupied

the county won’t let you in there so you can’t check for things like mold or foundation issues

or some of the big ticket items that you can’t just notice off the street okay however if you know the maintenance guy named fred you kind of throw him a little 20 or 50 under the table he’ll slip you the keys

i’m just kidding but seriously though number two

short sales so short sales are essentially when the lender will take less than what is owed to them just to get that non-performing uh entity out of the property so if the loan is non-performing or the real estate is non-performing

they don’t want that on their balance sheets so if the mortgage is a hundred grand they’ll say hey i’m gonna sell this property for 80 and get this deadbeat out of here

so short sales are typically just sales done by the bank

just to get real estate off their books okay

number three is driving for dollars driving for dollars is just what it sounds like

once you establish your criteria and know exactly where you want to invest in drive those neighborhoods and see if you see any uh uh

deferred maintenance so basically like you know tall grass you know garbage everywhere boarded up windows things that

literally look like the house is not occupied or the person is hurting financially

this you can then approach them you can do an off-market sale you don’t need to get an agent involved

and you can get a pretty good deal if they want to leave the property number four are letters so this is literally letters in the mail you can do yellow letters you can do

probate you can do a bunch of different techniques by sending these homeowners letters

who may not live or want to live in that property

a perfect example is you find someone who’s an out of state owner say there’s some rich dude from california they bought a deal in cleveland because they didn’t know what they were getting into

now they hate that property so they are an absentee

owner they don’t they own the house but they don’t live there you can send them a letter and say hey

you know mr software developer from california who has no idea what he’s getting into

do you want me to get you out of this property and then you can offer him a deal that way

so with that being said let’s get into my final thoughts about this and this is the most important part of the video okay so my thoughts i always give these at the end of the video and that’s why it’s important to stay and watch until the end

so number one is defining your criteria if you don’t define your criteria you’re going to be like a chicken with its head cut off you’re going to be

all over the place do you want to invest in single-family residential homes you want to invest in commercial real estate do you want to invest in doubles do you want to invest in small multi-family do you want to invest in office retail you know whatever self-storage there’s a million different

property classes when it comes to both commercial and residential real estate so define your criteria that means finding out okay

why am i investing in the first place am i investing for cash flow for appreciation

for potentially both you got to make sure your numbers work if it’s buy and hold you have to make sure the numbers work if it’s a flip

so all these things you need to get in order before you start looking for deals it’ll make your life that much easier number two is establishing a team so before this market corrects it may behoove you

to find a you know legal teammate so a lawyer a cpa a real estate agent these are all people that are part of your core team that way you can act on deals quickly

and you make sure you’re getting the most benefits especially from the cpa number three is patience okay don’t do a deal if the numbers are kind of just so-so or on the fringe

if you waited after the 2008 correction i know people that made fortunes in 2010 2011 2012 because they scooped up a bunch of short sales and a bunch of auction properties that came online after the big crash so i would wait i’d give it 12 to 24 months because that’s when i think this correction is gonna happen

and have that dry powder and build that battle chest or that war chest so don’t just do a deal to do a deal because then you’re going to burn up all your dry powder and then when a better deal comes around you’re not going to have the ability to close

so i hope this video was valuable if you got value out of it share it with one friend on facebook

on social media on twitter these videos take a lot of time and effort to create i just hope that you share them subscribe hit the bell notification yada yada smash the like button you know do all that stuff that all the cool youtubers say but at the end of the day just share the video guys i’d really appreciate it

hopefully you got value if so visit the world’s best website right here whiteboardfinance.com where i have a lot of

blog posts and reviews with my own thoughts

and again i hope you guys got value from the video thank you so much have a prosperous day

friends family fools well

that’s pretty much everyone i know so i should be swimming in the money right.

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