i might go bankrupt

I might go bankrupt yes that is true and

in this video I want to talk to you

about the entrepreneurial risk of

feeling like you might go bankrupt

so first I want to explain that when I

became a real estate agent I had a

steady job working at Red Robin as an

expediter I never made it to server I

got I moved from Jamba Juice I made a

dollar more per hour and I was so

excited but I never made it to server

and you know what I just decided that's

it I am going to quit and I'm going to

become a real estate agent I didn't make

a dime from that for 11 months it was a

YOLO it was a YOLO to start a real

estate business at the bottom of the

market in

2010. that's crazy why would you do that

but I did and I did the same thing again

pretty much when in 2013 I decided you

know what I'm gonna YOLO a substantial

portion of my net worth into doing a TV

commercial to blow up my real estate

business

and then I expanded the business into

different verticals getting a

construction license and a lending

license and some things worked out and

some things didn't

and then I quit that entire business

because I was doing YouTube and I

started doing YouTube full time now

remember I became a multi-millionaire

well before YouTube I just brought the

teachings of real estate and stocks to

YouTube and and people enjoyed that

perspective and I'm so grateful for that

I'm so grateful that you come here to

watch me flip-flop all the damn time

I think nobody knows how to flip-flop

better than Kevin

and look I like flip-flopping because PP

flip pp's flip-flop all the time and

that's something you have to remember is

that PPS are not constant they're never

constant they go up and down pp's

flip-flop all the freaking Time pricing

power for companies change business

pricing power for where you are in your

life changes

I am a conservative in my opinion real

estate investor really really

conservative real estate investor but

I'm also willing to make really really

big bets on businesses whether that's in

stocks or in my own businesses

and right now I'm at another critical

point in my life where I've decided to

make a really big bet on my businesses

and that could go personally really

badly for me now whatever ends up

happening I'm going to share everything

with you I certainly don't think that

I'm going to go bankrupt I think that

I'm

98 certain that I personally will be

totally fine but I want you to see what

I just personally signed up for and then

of course I'll talk about what

implications this has for uh for my uh

my ETF and house hack separately right

this video is about me this is not I

always have to be very clear because

sometimes people see me make a title

like this or a video like this and I'm

talking about me personally and they

kind of conflate that with like an ETF

or uh house hack the real estate startup

this is very separate from those so keep

those in the back of your mind but I'll

Circle back to those so what did I just

sign up for uh this folks I just

personally signed on a

9.6375 million dollars of debt this is

the largest loan single loan I've had

more loans than this obviously in real

estate but this is the largest single

loan that I have ever personally signed

on

this loan is uh being written to the not

my Tesla LLC that's because unlike Tesla

I want this to go up

[Laughter]

uh preferably not down

uh and um and I am uh uh myself and

Lauren are the signers and personal

guarantors of this loan so uh if this

loan goes poopy doopies then uh I am

personally on the hook for this

now again I want to be so thankful and

grateful to you because if it weren't

for you as a community watching my

videos and the thousands of you who are

course members or Affiliates for my

courses who are like dude you know love

Kevin or hate Kevin on YouTube these

courses actually do have tremendous

value the course member live streams

love them or hate them uh like Kevin as

a person damn there's some really good

research and insight in those that

you're not getting anywhere else I mean

you're getting basically my brain and my

team's brain just dumped to you all in

in Q a format and research look I'm not

trying to sell you on I'm just trying to

say thank you to all of those of you who

support me because you make this

possible Right you make it possible for

me to take this risk this is a risk I'm

taking you know some people are gonna

look at me and go you're an idiot and

people told me it was I was an idiot

when I did my my uh TV commercial for

real estate people told me it was an

idiot when I became a real estate agent

people told me I was an idiot and I

should get a real job when I started my

YouTube channel you know like I'm always

called an idiot and every time somebody

calls me stupid it's a sign that hmm

maybe that is what I should be doing so

I'm getting called pretty stupid about

this and people think I'm trying to like

subsidize some kind of like luxury

lifestyle with this and I'm going to

show you some pictures okay and then

I'll show you like the monthly payment

that I'm facing with a sucker as well uh

but um yeah look when you see this it's

gonna look like a butter purchase okay

because I've always said that stuff like

this is better this is a Phenom

300E small jet I call it a baby jet uh

it is a two pilot it can be flown single

pilot but it is a two pilot uh twin jet

jet airplane this is extremely expensive

uh it is uh it is a basically a 13

million dollar plane uh I want to come

clean about why by the way and I talked

with course members about this in a

research note this morning that I sent

out to everyone but um I just want you

to know what I faced when I was when I

was looking at this first I was told

that I'd be looking at 10 down on a

plane okay 10 down is very very

different from where we ended up it went

from 10 down to 20 percent down to 25

percent down like last minute because of

macro conditions so 25 down on a plane

is a lot more than 10 down on a plane so

I needed a lot more cash inconveniently

here in December than I thought I needed

on top of that

on top of that okay this is the other

thing I thought I was gonna buy an 8.6

million dollar plane but the 8.6 million

dollar plane I went and looked at ended

up being a smoker plane you wouldn't

know that from the pictures and stuff

they said they redid the interior and

I'm like I better go check this thing

out much like in real estate you go

there and it's like

oh that's why that one ain't selling

like Lauren ain't gonna go in a smoker

plane with me you kidding now I'll talk

comps in a moment okay we did a lot of

shopping uh for this thing but uh and

I'll talk to you rationale for this

although I'm not trying to like justify

this thing it's a business risk okay I'm

not trying to subsidize the luxury

lifestyle it's a business risk but this

this is a big deal so I had to pay more

for a plane

uh than I was expecting to not only did

I have to pay more for a plane than I

was expecting to but uh I had to put

more down and it sucks now the good news

is I'm getting a much newer plane first

of all the paint job is dope okay it

looks like a circuit board it looks like

a computer it's sick it's a Phenom 300E

thing's got some of the most advanced

avionics that you could ask for it is

got the Garmin 3000s Pilots are gonna

love this this thing is is new it's

beautiful it's safe it's great I'm so

excited about this uh but look I you

know I'm not trying to sell you on on

the idea of this plane right this is a

business risk that I'm undertaken and

and I can only do it thanks thanks to

all of you and therefore I feel like I

owe sharing this basically YOLO that I'm

taking with you because it's a really

big risk like a plane can sink people

planes are really expensive I am setting

aside died about two and a half million

dollars in an annual expenses for

payments

and uh for for pilots and for hangers

and everything else for this plane the

plane is going to cost me on a monthly

basis at minimum 71 000 just for the

loan now fortunately it is a 20-year

fully amortized loan so it's not there's

no balloon payment uh never do those

there's no uh you know uh variable rate

uh which I probably wouldn't mind at

this point because I think the rates are

going to go down but there's also no

prepayment penalty so I could refinance

which is nice but dude this sucker is

probably gonna cost four to five

thousand dollars an hour to operate the

good news is the variable costs are only

going to be about a thousand to fifteen

hundred dollars which is nice so it's

kind of like the most expensive part of

having a plane is actually not using a

plane is owning a plane like the

expensive part is owning a plane not

using a plane now if you want to do like

the one-off flight Charter you end up

paying like fourteen or fifteen thousand

dollars an hour that's a rip-off that's

insane like this is already expensive

but I'd rather pay like four thousand

dollars an hour if I use the thing right

but it's it's predicated on using blood

so this is literally a a business

YOLO that's that's all I could tell you

it's got nine seats uh uh belted lav uh

it's got the two seat couch in the front

it's small plane uh it's got two pilot

seats obviously I love the design of it

the colors of it everything uh I'll be

seeing it in person again soon so I'm

really excited about it but I have to be

very very transparent it is a big

business risk now I'm going to talk

about comps in just a moment but let me

talk about why I'm taking this sort of

YOLO of business risk so I believe that

I I have two choices I can sit here and

make you know one YouTube video day and

just okay cool you know you made it on

YouTube or whatever and just lay back

and collect your paycheck and say the

same bull crap every day like go buy

index funds guys can't beat index funds

which I think is total bull crap anyway

uh I think there's a massive benefit to

an actively managed ETF where the active

ETF manager can rebalance stocks that

ran

in a tax advantaged way for you and

choose thematic plays you you generally

you don't get that on in in in index

place but anyway

okay

that's the easy option right you just

sit back collect your paycheck Don't

Rock the Boat don't have anyone hate you

don't do anything to make people unsub

dislike you know and and play it safe

that's one way you could do it you

collect your paycheck good

me I want to level up and so my view is

that if I want to convince the world

that I can be the CEO of househack

while at the same time operate my

YouTube business and media business

because remember when I ran for governor

everyone's like how are you getting your

rent for governor and be governor and

run a media business at the same time

it's not going to work yeah everybody

always says that this I get the same

complaints about house hack how are you

gonna run hashtag and YouTube at the

same time and you know what they're not

wrong I can't do it unless I can hop on

a plane and actually on the ground boots

in the ground be the inspiration that

drives our company and for the first

hundreds maybe even thousand properties

that we buy I can't Outsource this like

like some people are like

oh Kevin why don't you just do

matterport scans and run your real

estate business from from from the

office

anyone

and and that might be possible in the

future when we have thousands of

properties in a like a really a perfect

real estate reputation and we're a huge

company right in the future that's

possible that's no-brainer in the future

especially once we get established in

our areas with our context but anybody

who does Real Estate knows that real

estate is a people business you don't do

real estate

from afar you show up you meet people

you shake people's hands you build

relationships with the plumbers and the

electricians and the contractors to make

sure they don't screw you because if

you're not there you're gonna get

screwed and so you have to build teams

to make sure you don't get screwed and

see what I'm basically doing

is I am signing up my own personal self

and Lauren she's along for the ride and

she's on board with this okay and that

says a lot okay to get her on board with

this

I actually didn't have to do a lot of

convincing she was really opposed to it

but when I sat down and I broke down all

of the numbers and all of the vision and

all of the plans she's like

I support this that takes a lot for

Lauren to say that she is a really

risk-averse okay uh so

I believe that for me to make sure that

house hack has the best possible start

I'm going to sign myself and put myself

on the line to prove to everybody who

has the faith in house hack that I'm

putting everything into this space

it's gonna be great

so

I'm personally paying for this plane

I'm personally buying this plane I'm

signing up for the liability of this

plane it's really really scary

now what about cops uh because some

people are like oh and obviously me

being able to travel facilitates all of

that right okay good uh and it also

facilitates me continuing to make

YouTube videos and building my team and

building the ETF and all that good stuff

so

what do the comps look like for this

because some people want to have this

impression that oh you know Kevin's just

saying he uh you know this plane

appraised for more than he's paying for

it to inflate it to the IRS no that's a

criminal and B not what's happening okay

the appraiser is done by A lender let's

go through some comps share a little bit

more insight with you

and uh then I'll come right back hey so

just to provide some insight into how

that works I actually did shop for many

different planes last year I was

actually briefly in escrow on a plane

had a 300 000 deposit on it I got all of

that deposit back uh less net net about

25 000 so I did eat about a twenty five

thousand dollar cost on the last plane

but that's okay because I got a plane

that's much more efficient it's smaller

it's not as big as the last plane maybe

I'll reveal the last plane at a

different time but uh that was way too

much play in the last one but anyway uh

these were some of the other models that

were available like a 7.99 million 2010

so you could see like 2010 was selling

for eight mil that thing's like 12 years

old it's got 5 000 hours on it that's

almost what they call a charter dog

where people kind of just rent them out

while they're not using them to a

charter and it just they get the miles

put on them and these they're called

hours planes are operated by hours uh

here was actually one that I looked at

in person was a 2012 had about 2500

hours really like the owners really cool

people I actually thought the paint

scheme was freaking amazing but I look

when I walked inside the plane and I

explored the outside of the plane at

eight eight compared to the one I ended

up with let's just say it it was it was

10 years old uh and it was previously

from Germany and France and the Germans

and French they like smoking okay I'm

not a big fan of that and Lauren would

never go on okay let's just say anyway

uh so that's eight hate and and these

are like relatively close to market

prices because you look at some of these

selling 2015s here 2 000 hours 885 hours

nine and a half to nine point six mil

here's one that had belly damage to it a

2018

10.25 mil 2018

between 1500 and 600 hours depending on

but both of them in the 11 millions and

now this is where the the E-class starts

the E is in the the enhanced model a

newer avionics uh faster plane and a

more efficient more fuel efficient plane

the 2019 that was available had about

900 hours about 12 million for that one

the sold prices here there were some

2020s that sold around 12.99 so about 13

uh 2020 sold for about twelve five uh so

you could see you know the market is

there now you need to know that this is

kind of like what happened with used

cars or even new cars or at some point

they were actually selling for over MSRP

the same is actually true with the

Phenom 300es if you want to get a new

Phenom 300E right now you'll be on a

waiting list for two and a half years

and I don't know if I'm gonna have the

same tax situation in two and a half

years I'm certainly going to have a

different tax situation because I'm not

going to be an S corporation anymore my

media business is moving to a C

corporation and so our taxes are already

going to downshift from 50 to closer to

30 percent potentially even less so it

really makes sense for us to take

advantage of the situation now even if

we're paying a you know a fair price in

potentially a little bit of a bubbly

market and we think we're paying a fair

price because you've got sold comps like

a 2022 that sold for 13.25 with two and

a half times as many hours as ours this

is ours right here 200 hours the things

like brand new it's like never used uh

but it is used you know so it had one

owner really good owner met the guy in

person biggest harder ever I love this

guy uh really really cool guy I want to

interview the guy on the channel anyway

he would be fascinating to have on here

uh 12 8 uh 50 is what we're paying the

cons the other solds easily brought it

in at that uh so this this is not a

matter of like when I say oh it

appraised for 400 450 000 over what

we're paying for it this isn't like

we're trying to tell the IRS uh oh it's

worth more this has nothing to do with

the IRS this is not an assessment for uh

for the tax assessor this is straight up

for a lender to say hey do we feel

comfortable lending on this plane

because if it doesn't appraise we don't

feel comfortable landing on it so this

is a lender's security to lend to us

this is not again for for taxes or

anything like that it's not me trying to

like fluff oh look I got a good deal on

a plane look I think I did a good job I

I do think I'm buying it a little bit of

a bubbly time but that's just the corner

I'm backed into because of the tax

situation and uh and also the timing of

me starting my startups so I'm willing

to bite that cost and the good news is

nobody else is I'm taking that risk

actually so is Lauren Lauren's also

taking the risk okay so there you have

some insights into why I'm buying this

who's signing up for the debt on this

plane it's me uh it's a personal LLC

that I have well the LLC is owed by

owned by my media business right but

we're personally guaranteeing it but the

media business is buying the plane right

this is a clearly a business use plane

that I'm I'm doing this so that I can

continue both of my businesses and I'm

signing up for a lot of risk gets really

really scary so I have no idea how these

things are going to play out uh but I

have a lot of hope I also think that um

househack has a very very high

likelihood of success no guarantees I

you know I I can't make guarantees you

have to read all the risks and and

disclosures at househack.com right

but let's just put it this way

look at the bet that I am making

on house hack to make sure I could do

the best I possibly can to provide a

diversified portfolio of real estate for

that company

it's going to be really really exciting

so I'm I'm personally jumping up and

down with uh enthusiasm and excitement

uh you know I um

I'm excited to share this with you and I

just have to thank you because without

you this uh this risk would not be

possible

uh and uh and as a result I will make

sure I continue to provide value to you

because I I always want people to think

that if they're watching my content

they're doing it so that they can

benefit right I want you to get more

value than you give me like when you

watch an ad on my YouTube channel you

pay me value right I hope you get more

value out if you buy one of my courses

and you're you know like okay I gave

Kevin 500 let's see what he can do you

know I I want you

to look back on that 500 in a year from

now and go

damn dude I won 100x my money on that

500 right that like that's what I want

for you

uh and so I'll I won't stop until that

becomes reality thank you so much for

watching

this is scary but I I did it outside