What if I Buy a House and the Market Crashes?

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시장 폭락 시 리스크 방어법으로 시세보다 싸게(웨지) 매입, 30년 고정금리 대출, 현금흐름 확보를 제시. 과거 2018년 부동산 하락 경험을 언급하며 장기 보유하면 문제없다는 입장.

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01. koonta from our real estate investing course has a question it says what if the market Falls that is what if you buy and then the market Falls well here's exactly what you do to prevent any kind of risk while owning real estate and having a loan against real estate which most of us are gonna get alone will we buy a place here's what you're going to do first things first your goal is to try to find something under market value so that line represents what market value is your goal is to try to find something decently beneath that so if you're buying a house for $200,000 your goal is to try to get that for $170,000 or below now you might ask well how do you take advantage of that well obviously this is what we call buying in the wedge that is usually if you could find let's say $170,000 house in a $200,000 neighborhood the reason is because maybe it needs paint and carpet and so that's where you spend that $10,000 or whatever it would take on paint and carpet and all of a sudden you just protected yourself with this and that's what we call the wedge that positive difference between market value in the neighborhood what you could resell the property for if you had to and what you're buying it for this now gives you insulation it gives you protection which is what you want in the worst case scenario that you had to sell the property but here's another thing that the wedge does for you when you take advantage of buying in the wedge you generally also have lower payments but you're able to collect rents at that market value line so everything's renting for around those two hundred thousand dollar prices whatever those rents are let's just go ahead and say it's $1,500 a month well yours would also rent for $1,500 after you do the pain carpet to make it similar and so you're now locking that place in and lower payment which lower payment means less risk in real estate this is the biggest benefit to trying to buy deals in the wedge this is why we talked about that so much on this channel and obviously in the real estate investing course now there's another very important way to protect yourself from the market falling the most important one in my opinion is getting what's known as a 30-year fixed-rate loan I'm not as big of a fan as variable loans because the payment that you have to pay could change I'm also not as big of a fan of 15-year mortgages that's because you have to pay so much more per month and it could put you into a risky situation where your emergency fund gets eaten away very quickly if let's say you lose your job that's why my favorite loan is the 30-year fixed-rate mortgage the payments cannot go up other than little tiny things like property taxes and insurance that go up a tiny bit per year with inflation which if the market Falls you might not be seeing as much inflation anyway and then you're not exposed to the risk of a higher monthly payment that you might have with a 15-year loan and if interest rates go up it doesn't matter to you because you have a 30-year fixed-rate loan rates are not going up now the benefit is if interest rates fall you could refinance and get a new loan at now a lower monthly payment and so let's pull this all together if you buy a property and the market value Falls it really doesn't matter to you unless you have to sell if you do have to sell buying in the wedge buying below market value will protect you and insulate you and help you cover some of those selling fees so that you can get out and sell if you need to but best-case scenario you turn the property into a rental property you have the tenant pay off your loan and because you were able to buy the property at a discount your rent should make it so that ideally best-case scenario you have a decent cashflow enough of a cash flow to cover your repairs and vacancy which I usually consider to be about $200 per month per unit that you have and any extra expenses that you might have like a property manager as long as you follow these rules where you're buying below-market you're buying with a 30-year fixed-rate loan and you're insulating yourself with cash flow because you're buying below market you shouldn't be concerned whatsoever about the market collapsing and even if it does what should the savvy investor do in such a case well in most cases I would argue nothing that is literally just keep the property milk it and oh well wait until the market goes back up now look let's be real it's gonna be a pretty crappy feeling it's kind of what I felt last summer in the summer of 2018 when real estate values at my neck of the woods dropped like 8 to 12 percent and I'm like ah this socks is like so painful dying on the inside right but I'm thinking to myself it doesn't matter though because the tenants are still paying my 30-year debt off it really doesn't matter if this is the beginning of the end and values are gonna collapse because usually what comes right after the end is a new beginning and I think that's just a fancy way of saying every recession comes to an end and things eventually get better so as long as you're investing in real estate for the long run you probably won't have too big of problems