How to Profit from a Recession?

What's up everyone? Today I'm going to give you my number one tip for surviving and thriving in the next recession. So before we get started on this video, please hit that like button below and consider sharing this video with someone who might find it useful. So it's become pretty clear that with the recent events in the Marketplace and the COVID 19 scare and all the things that are taking place that the US economy is headed into a recession. Right? This was the black swan event that sparked the next recession. We knew it was coming, we just didn't know when and what was going to cause it. But those two things have taken place. So every recession is different and I want to help you guys maximize your opportunities in the next recession because every recession does provide opportunities. While there are differences to each one in magnitude and in sectors that are most affected, the one thing that is constant is that there's always going to be an opportunity to make investments that are going to pay off in the long run. So the one constant thing I noticed amongst all the recessions is cash is king. If you have cash to invest during these periods, you outperform because you can make investments that others can't. Now you know, many people are heading into this recession and don't have those resources available and you know, so they're not going to have the same opportunities that someone who does has. But many people don't have liquid cash to invest. One thing you can do is if you own your home and you're sitting on a lot of equity, you could use that equity as an investment. Now typically a mortgage lender like myself or anybody in the real estate industry would tell you to take the cash out, tap that equity and take it out. But I would actually advise you to do something else. I don't provide this product. You'd have to go to your bank. But the thing I would advise everybody to do is to take out a home equity line of credit. They call this a heloc. Now what a HELOC does is it is an open ended line of credit that's attached to the equity in your home. It costs nothing to open. Most of the times if you go to the bank where you have your banking relationship with, it's free. So 100% free. They handle all the paperwork. Takes about a month to do it. You don't have to pay any interest on this line of credit unless you use it. The rates will vary of course, depending on your credit score, but if you're not using it, it's essentially free. The only cost Is I believe they have an annual fee that starts after the first year and you pay that once a year. It's minimal. So the cost is, like I said, nothing that allows you to have the money available in case an opportunity presents itself. Now, you don't know what that opportunity is going to be. It might be in the stock market, it might be in the real estate market, it might be in a business that all of a sudden you want to invest in privately or in a business that you want to start, or a side hustle or anything. But having that cash gives you options, options that aren't there if you don't have that money available and you don't have to pay interest. So, you know, that's the best part about the heloc. The reason why I would advise you to take the money out before you need it is because currently home prices are at or near their peak. So if we do see home prices come in a little bit and the market soften a little bit, that will impact your ability to take out a line of credit. Because the banks only give you up to a certain amount of, of your equity. It's a conservative percentage of your equity. So right now, if your home price is sitting at a really high valuation, that gives you access to the most equity you know that you've had in recent years. You can tap a small portion of that, have it available, and that gives you the ability to invest. Now I'm not saying that home prices are going to come down, but if they do, many times the banks will stop providing this liquidity or they will limit the amount of equity that you can take out. So you get a kind of a double. You get kind of. You get hit with two issues. One is home prices could come in and then the banks get more strict. As that happens right now, you don't have either of those options or those difficulties or headwinds. So I would definitely use this as an opportunity to get that line of credit established. Now, if you have questions about whether or not to do a cash out refinance or a home equity line of credit, reach out to me, let me know, I'd be happy to help. But in the meantime, think about doing this. Because having access to cash is the one thing that differentiates somebody who is able to take advantage of a recession and somebody who is penalized by that recession.