Losing Career & Home | The Recession Begins [Meet Kevin Reacts].

hey everyone kevin here i think this it

goes as a warning for everybody who has

a job and who's trying to build their

wealth in the longer term

we have an art slash real estate post

here that's gotten some popularity came

up and suggested and i thought hey let's

respond to this since after all a real

estate broker used to be a licensed

lender and what i do has everything to

do with helping people build their

wealth

so let's take a listen here i want to

thank everyone for reading through this

mess beforehand me and my partner bought

a house about a month ago in texas i

have to admit we were desperate to buy

the house didn't consider our situation

we put 30 percent down mostly to reduce

the payment as much as possible with a

4.625 interest rate luckily enough we

didn't over bid for the house we just

bid according to similar houses in the

area this would be known as bidding

according to what the comps are which is

obviously very very important and now

the ugly part uh and they paid about 230

000 for the house by the way with a loan

of 150. now the ugly part my partner

has their job their job has been slowing

for a while now and now there are hints

of layoffs in the near future for this

person's partner and they themselves

work in tech making decent money to pay

for the house until now that the

industry is facing a tremendous slowdown

maybe venture capital attack here also

seeing a huge huge slowdown

anyway a lot of people have started to

get laid off and i'm not precisely

precisely the most important individual

here worst case scenario we can both be

unemployed in the near future this is

the solution that i'm thinking

sell the house now for a huge loss and

then pay even more in the tax season

well first of all if you had a big loss

you wouldn't pay more in the tax season

but you'd definitely be limited in how

much you could write off but anyway we

would move into our old place which is a

mobile house which is more affordable

i've been looking for houses around the

area that are still selling relatively

fast so they're kind of getting excited

thinking oh well if homes are still

selling let's let's just dump now

quickly

as i say i'm aware it will be a huge

loss not a flipping situation here since

the house is in good shape okay well

that's also a very important detail

right there that we'll come back to that

and i'm aware that the mortgage will not

be happy how probably is it i will face

a hard time getting a new loan in the

future we're both really depressed right

now there are a bunch of boxes that we

need to stop unpacking and they're just

sitting there we fought for a long time

to get the house and now we're facing

this challenge i would appreciate any

advice specifically from somebody who's

been in the situation or professional in

the field well we got the professional

in the field situation but i've also

been in a similar situation given that

my first property

that that i bought with my wife we were

barely able to afford the payment and we

thought oh my gosh if one of ours just

hours gets cut we wouldn't be able to

afford the property and so we actually

came up with some logical solutions for

this so we'll talk about

those exactly let's just get get into

some of those ideas but i like to put

numbers on the odds of both of you

getting laid off let's start there let's

say both of you have a 30 chance of

being laid off well the beautiful thing

that you can do is you can multiply that

together and then you come up with a

combined likelihood of only nine percent

that both of you are going to get laid

off so if you evaluate and play with

numbers here you can probably see that

for both of you to get laid off

probably going to be pretty unlikely but

it could happen so what i like to do is

just go to the worst case scenario and

see what can we do to deal with it so

let's think about this

first of all let's make this clear the

lender does not care if you pay off your

loan after a few months ideally six

months that's usually the window in

which they want to keep it because they

want to be able to sell the loan to

another party but generally the lender

makes money doing what is known as

making the loan to get points or to get

some kind of spread in which that they

make your loan at let's say 4.625 where

you are and they sell it on the open

market uh and they pick up points on the

open market because maybe the open

market has interest rates that are

actually at 4.4 at that time and that

little difference there is something

that they can essentially get paid

points for so either you pay points or

the market pace points the lender once

they make the loan doesn't care this

loan goes off into the mbs market which

is the mortgage bond market and people

don't care it's mortgage-backed

securities mbs uh the lenders really

don't care if anything they want you to

do another loan in the future so it's

fine they just want your business back

you don't have to worry about that so

don't don't let things that don't matter

blur your decision-making process here

whatsoever like don't even think about

taxes don't even think about the lender

right now focus on

what you have which first of all is a

low odd of actually losing your job so

let's write that down or both of you

losing your job so low odds

of both

uh both getting fired right so let's put

a little check mark there uh there we go

but let's say uh right now you're in a

situation where you fear that this could

happen do you ever think about how much

information you have to give up when you

sign up for a crypto exchange name

birthday email phone number social

driver license etc and i mean pretty

soon they'll be asking you for your

kidneys and there's a lot of sensitive

information and some of these companies

have been going bk and you know what i

could potentially leave them vulnerable

even companies that don't go bk to cyber

criminals who are certainly aware of all

this information which is why we are

seeing a growing number of cyber attacks

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with aura what's the first thing you

should be doing well the first thing

that you should really be doing before

you start thinking about when you both

lose your jobs is milk the fact that you

both still have your jobs and do what

i've been preaching on this channel

really forever but especially since

november when we had a euphoric bull

market and then as that euphoric bull

market ran away i really amplified the

messaging which is

pay off your debts pay off any margin

that you have credit cards car loans and

start building a reserve make sure you

reduce your expenses start saving more

that sounds stupid but how much are you

spending every single week going out to

restaurants maybe limit that or you know

what mix some tequila if you're gonna go

drinking in in uh you know a bottle of

coke or something or jack and coke and

go to a restaurant with that stop

overspending for alcohol at restaurants

and stop going in the first place you

know if you can you know take take your

drink and go hang out at the beach but

make sure to check local laws first but

anyway look you haven't lost your jobs

yet so you're in a place where you could

still set yourself up for comfort now by

making sure you minimize other payments

that you have you know look at things

like can you cut your tv bill your

internet speeds do you really need the

fastest in the world maybe if you do

keep it fine but does it really make a

difference uh how many cell phone

services do you have or or other

subscriptions do you have that you can

cut right start going through those

start there i wouldn't be so worried

right now about thinking just about that

mortgage payment so we'll talk about

that mortgage payment because when my

wife and i bought our first home we also

considered worst case scenarios but with

logic and some planning we ended up

finding some very useful ideas so our

payment was about two thousand dollars

per month and we were making about two

thousand dollars per month at the time

and so what we realized is okay well if

one of us had our hours get cut

substantially what we could do is we

could a

rent out rooms right we had a three

bedroom two bath and so we could rent

two rooms probably for at least at the

time six hundred seven hundred bucks

apiece and that would make up more than

half to almost 60 70 percent of the

mortgage and the rest is probably just

the almost the principal portion of the

loan which is kind of just going into

our for savings account why would we

give up that for savings account when we

could just rent out rooms of four

savings of owning real estate are one of

the most wonderful things of owning real

estate

now next that we could do is we could

jump in and we could rent out the entire

property

and uh and probably rent it out for

about two thousand dollars yeah there'd

be some incidentals right we'd probably

still be negative because maybe we'd

have repairs that would come up 100 200

bucks but we could afford a slight

negative if we had to move out and just

rent out the whole thing for say what

our mortgages the extra 200 or whatever

we could pay we could cover that and

we'd live with either friends hopefully

for for a very large discount or just

move back in with family just until we

got back up on our feet and we could re

you know

we could return the favor to them in the

future or whatever right that's what

friends and family are there for uh so

hopefully you have something you can

lean on which according to your post you

do because you have a mobile home that

you can move back into so you don't even

have to worry so much about that

and then the next thing that you could

do is even if one of you loses a job the

first thing that you really should be

considering is not oh no i'm a lame duck

now and i'm going to sit here and do

nothing is you should get another job uh

or or even get a better job if you can

yeah but even if you realistically had

to get a worse job like you're all of a

sudden mowing lawns or whatever which is

not an insult to people in the

landscaping business i'm just saying

like if you're going from tech or jobs

that are paying you very very well and

you feel like you're doing something

that's beneath you don't like there is a

demand for people to work hard and get

paid for good work out there so this is

actually the time what i where i like to

encourage people to double down on their

skill sets start getting

licenses uh get a real estate license

you know get a mortgage license uh

increase the if you're in tech what can

you do to learn another language that

you might need for a job at you know

different company that is hiring right

now uh you know you can look at

companies that are hiring as well like

for example american express as they're

still hiring and so you wonder great are

they maybe hiring some tech do they have

offices out here in texas right these

are all things that you could look for

uh you know insight into and so that way

you could start preparing so i'm a big

fan of get ready be proactive now and i

wouldn't make a rash decision and just

go dump your property uh because even if

you sold it for ten thousand dollars

less than what you paid for it after

you're selling costs and moving costs

and everything you're still going to be

down like 30 grand on this it's a

terrible idea you worked hard to save up

that down payment of 30 80 grand don't

uh don't don't blow it up so uh stay

strong

make the right decisions thank you

everybody else for watching this if you

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