Summary

1. There is no single right answer.

2. Look at all scenarios.

i. Market may go up, down, or hold for 6 months to 2 years.
ii. Cash out? What then? Hold…what if…. Buy…what if…

3. Is #1 priority lifestyle or the numbers.

4. Pick option that is the best “Happy no matter what” for you.

Full transcript

With a market turn coming, with a market adjustment, market correction, market crash, whatever is happening or gonna happen, how should I prepare? What should I do? Should I buy? Should I sell? Or, should I hold?

Hi there, it’s Kevin Ward, the founder of YESMasters real estate success training. And I did a video recently about the market crash that is coming. And in the video, I talked about, we don’t know when it’s coming. And yet, what’s crazy is, I got comment after comment after comment about people going like, “Well, should I buy a house now? Should I sell a house now? Should I hold? Should I wait? What should I do? I have this much equity. I have this much cash. I have this. What should I do?” And my first response to that is go like, “Would you just actually watch the whole video and take notes on it?” So we’ll put the link to that video here in the description of this video. So if you have not yet watched that video on how to prepare for a market crash, you can click and make sure you watch that video, ’cause it will give you a context for this video.

But because I had so many people ask and comment with this question is, with a market turn coming, with a market adjustment, market correction, market crash, whatever is happening or gonna happen, how should I prepare? What should I do? Should I buy? Should I sell? Or, should I hold? ‘Kay? If I had money right now, should I buy a house? We’re thinkin’ about buying, we’re renting. And people are tellin’ us you gotta buy, and interest rates are kinda goin’ up, but they’re still now. What should we do? Should we buy? Should we … We have a property, we have equity. Should we sell it and get our cash out? Or, should we hold? Or should we … What should we do?

And so I’m gonna walk you through a process, how to make a decision. Now, I just wanna be very crystal clear, here. I’m not gonna tell you what to do. Anybody that’s tellin’ you what to do, unless you actually have hired them and they know your exact situation and they can advise and counsel you on what to do in your situation, anybody that’s sayin’, “You should do this,” on a video like this, and they’re goin’ like, “This is what’s happening. The sky is falling and you should do this. You should sell, sell, sell.” Or, if you’re hearing a video like that, there are too many different variables. There are too many different scenarios that could happen and too many variables in different people’s situations for there to be one blanket answer. Okay?

If the sky was actually falling, then there would be one answer for everybody. Take cover. But we don’t know what’s actually happening in the market. So first, watch that other video that just simply says, “Is the market crash coming?” Yes. We know a market crash is coming. But we don’t know when, and we don’t know how severe it’s gonna be. ‘Kay? Some people are goin’ like, “It’s not gonna be as bad as 2007, 2008.” And others sayin’ it’s gonna be ten times worse, and some people sayin’ it’s already happening, it’s already beginning. Other people say it’s not gonna happen for two years. Which is it? Okay. So first, I don’t know. And neither do you, and neither do they. Nobody knows until it’s actually happening. It’s like forecasting a market turn is kinda like forecasting an earthquake. And I live here in southern California, where we have earthquakes all the time, and we don’t feel most of ’em, and the big one’s comin’, but we don’t know if it’s gonna come this year or 100 years from now. But we gotta be prepared for it. So that’s the most important thing is to be prepared.

So how do you prepare and what do you do? So first thing I wanna tell you about, should you buy, sell, or hold, I’m gonna walk you through how to make that decision. So first, understand there is not one perfect answer. ‘Kay? There is not one perfect answer. And that one just reached the end of its life, so we’re gonna switch to the new one. There is not one perfect answer that in all scenarios, “Should I buy?” Yes you should buy right now. “Should I sell?” Yes, you should sell. There’s not one answer that’s right for every person. And probably not one answer that’s right for you. It’s a question of … It’s not one right and all the other ones are wrong. It’s, which one is best? So just understand, there’s not a like, “Okay, I gotta … I can’t make a mistake.” So, not one perfect answer.

So here’s what you do, is you look. Right now I want you to look at all the scenarios that could happen in your situation. All the scenarios that could happen in your situation. So let’s say you own a property right now, you own a house, and you’ve got equity in the house. Okay? And you’re thinking, “Okay, if the market crashes, then it would be a good idea for me to have to sell now, if we’re at the peak, it would be great to sell my house now, get my cash out, hold that cash, or invest it somewhere that’s safe.” Gold or silver or whatever. And I don’t have gold or silver safe. I’m not a gold or silver guy. But you’ve gotta look at the scenarios. So let’s just say you own this property, got equity in it. So you look at it and go like, “Okay. One scenario is, I sell and I take my money out, and I put it somewhere else.” I may put it just in the bank and hope that it’s gonna be safe there. I may put it in gold or silver as a hedge, or whatever.

And then what if the market continues to go up for another two years? Then what’s gonna happen? Okay? So we sell now, we get our equity out, we put it in savings or we hold it. We hold the money while we wait, and then we rent. And we just wait for the market to finally correct, when it goes down. And then when it gets to the bottom, and it looks like it’s gonna start goin’ up, then we’ll buy another property and we’ll be able to leverage the money we’ve made in this last appreciation cycle, we’ll be able to put that into another property. When the market’s … We sell high, buy low, and we’ll be able to move up in our house. ‘Kay? That’s one scenario.

The other scenario is, what if the market continues to go up for a couple years, what if we keep holding and we wait until we know it’s going down, then we sell? Okay? So let’s look at the scenarios there. So what I want you to do is literally get out a piece of paper and a pen, sit down with your other decision makers in this. Let’s say if you were married, sit down with your spouse and have this conversation, and go like, “Okay, what if this happens? What do we think is actually happening? What if we sell right now? What if we wait another six months? What if we wait another two years? What if we wait ’til we know it’s turning? Or, what if we just decide to ride it out?” ‘Kay? We just stay in this property and so forth. Same with buying is, should we buy right now? We have equity, we have cash. We’ve been savin’ for a down payment. Interest rates are started goin’ up, and we’re like, “Ah, we missed the best time. The best time would’ve been in 2012.” Right? Or whatever. It’s passed. At least, that’s the one we can see. The next best time maybe in a year. We don’t know.

But you go like, “Okay. Should we buy right now?” So look at all the scenarios and say, “Okay, what if this happens? If we buy and the market tanks? If we buy and the market appreciates? If we buy and the market holds?” Those are the three scenarios. If we sell and the market continues to appreciate, if it holds, if it crashes. ‘Kay? How’re we gonna be in those situations. If we just, if we wait. If we have money and thinkin’ about buying, we’re renting now, and we wait, we just hold our situation right now. Or if we own and we hold, what could happen if it goes up, down, or stays the same? ‘Kay?

So look at all the scenarios, and then you ask this question. Is this decision, is this a … I didn’t spell that right. Is this a lifestyle decision, or is this a numbers decision? And what I mean by that is, which is more important to you? Is it living in the home you wanna live in, or is it about maximizing the money? ‘Kay? Is it about the numbers, is this a business decision, a financial decision, or is it a lifestyle decision? So if you live where you live right now, you have equity in it, and you’re thinkin’, “We bought it back in 2014. The market’s really done great for the last three, four years, and we’re thinkin’ we should cash out.” Well if you cash out, and you wait for the market to tank, and then you go buy somethin’ else, are you going to … And let’s say that takes three years from now before you can do that, before you’re really ready to buy the next property when we hit the bottom, I don’t know how long it’s gonna be, but let’s say it’s three years. Are you gonna be happy that you spent those three years renting a little house or a little whatever, condo, whatever you’re staying in, or you’re living with your in-laws. Are you gonna be happy living with your in-laws for three years, waiting to get a better deal?

And then what if it doesn’t happen? What if you sell right and you move in with your in-laws, and you’re gonna wait it out, and the market keeps goin’ up for two years? And then it tanks. And now we gotta wait another two years for it to bottom out, and then … And you’re goin’ like … Are you gonna be okay living for four years with your in-laws, and then when they kick you out, you’re gonna have to go rent something or whatever. Are you gonna be miserable if you do this to make more money to reposition yourself in the market with your house, and say, “We’re gonna cash out and get our winnings. And we’re gonna cash out and wait to buy when it goes to the bottom and ride the money cycle.” Are you gonna give up so much lifestyle that you’re gonna go like, “I’m gonna be hating my life for the next four years?”

Now again, we don’t know what the scenario’s gonna be, but you gotta measure all this out. I hope this is makin’ sense. Does it make sense that we’re looking at the scenarios and go like, “Okay, if I do this and it helps me make money, but I’m miserable,” then was it worth it? Okay? Or, you’re goin’ like, “You know what? We’re gonna … We love this house. We’re happy here. We could probably sell it now and make some good money and move somewhere else and downsize, or we could rent and wait until the market corrects and then probably buy a nicer house, but we love our house. We really like it. We’d be happy to stay here for another ten years.” Then why not stay? Stay in the house, enjoy your life. If lifestyle is a primary purpose in this conversation, in this decision, then think about lifestyle versus money.

Now, if we’re talkin’ about investment property, if you’ve got investment real estate, and you’re goin’ like, “Should we sell and cash out of our rental property that we bought in 2011 and 2012. We bought a bunch of rental property, it’s really done well for us now, and it’s cash flowin’ good for us, but appreciated so much. Should we cash out and take our cash and hold it ’til the market turns, and then buy up a bunch of stuff?” Now, you’re talkin’ about a numbers game, and we wanna leverage our money to make more money. Well, that’s a different scenario. Right? And it’s a different motivation, ’cause you’re not thinkin’ about immediate lifestyle of how are we gonna live for the next five years. You’re thinkin’ about how are we gonna, long-term, put us in the best financial position. It’s about the numbers.

So you gotta look at, is this situation and is this decision a lifestyle decision, is it a financial decision? If it’s a lifestyle decision, how is it gonna affect your finances? If it’s a financial decision, how’s it gonna affect our lifestyle? Or does it even matter? So those are the, then, these scenarios that you have to look at and consider.

And then here’s what you do: Here is the decision. ‘Kay? Here’s the decisions. You pick, what I call the happy option. Choose the happy option. What’s the happy option? The happy option is, out of all the different scenarios of all the different choices you could make right now, which one is gonna make you the happiest if everything goes just the way you plan, or if nothing goes just the way you plan. That if everything goes the way you plan, you’re gonna go like, “Yes, we’re gonna be so stoked.” We’re gonna be like, “We knocked it out of the park.” That you’re gonna be happy. And, if things don’t go the way we expect and the market doesn’t do what we were expecting or believing or hoping or whatever. It takes longer, it happens sooner, faster, whatever. And it does this instead of this, we’re gonna be okay. And we’re still gonna be like, “Okay, we still made the right decision.” That, then, for you my friend, is the decision that you should make. And that is the answer for what you should do with a market turn coming. Should I buy, sell, or hold?

And you’ll go through those four steps and understand that there’s not one right answer, so you gotta look at all the scenarios. For your situation, if we do this and this happens. So what are the three scenarios? The market goes up for another year or two, market stays the same for a year or two, or the market tanks right away. One of those three scenarios is gonna happen. In our situation, we can do this or we could do this. So now you got six scenarios. You pick option A and this happens, option A this happens, option A this happens. In other words, you take all those scenarios, then you look at how’s it gonna … Which is more important? Numbers or lifestyle? And then which one for us, is the happy option? That whichever way the market goes or the timing goes, we are gonna be okay and we’re gonna be happiest. And then you have your answer.

If you have other comments, thoughts, questions, rebuttals, whatever it is, make sure you post them in the comments below. Also, if you like the video, give it a thumbs up. Subscribe to the channel if you haven’t done so. And make the decision that’s right for you. I’ll see you on the next video.