Banks Don't Want You To Know THIS About Money

In this video, Ken McElroy, shares his personal journey of accumulating over $739 million in debt and unveils the strategic use of debt as a powerful financial tool for wealth creation. The video breaks down complex financial concepts like leveraging other people's money, cash-flow investments, and estate planning, offering a new perspective on debt as an essential element in wealth-building.
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ABOUT KEN:
Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and has an upcoming book: "ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years." Ken is a Rich Dad Advisor.
Ken offers a wealth of personal experiences, practical advice, success stories, and even some informative setbacks, all presented here to educate and inspire. Whether you’re a new or seasoned investor, the information and resources on this channel will set you on a path where you and your investments can thrive.
Ken's company: mccompanies.com/
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DISCLAIMERS: Any information or advice available on this channel is intended for educational and general guidance only. Ken McElroy and KenMcElroy.com, LLC shall not be liable for any direct, incidental, consequential, indirect, or punitive damages arising out of access to or use of any of the content available on this channel. Consult a financial advisor or other wealth management professional before you make investments of any kind.
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#kenmcelroy #realestate #realestateinvesting #DebtManagement #FinancialGrowth #EconomicStability #PersonalFinance #CorporateFinance #SecuredDebt #UnsecuredDebt #InterestRates #FinancialStrategies #EconomicResilience #FinancialPlanning #RiskManagement #InvestmentStrategies #MoneyManagement #FinancialEducation #EconomicTrends

[@KenMcElroy]

If you got value from this video and would like to support our work, please consider sharing. the only way we know what kinds of videos to continue making is by the number of views. So if you want more videos like this, share it with a friend!

[@davidrpriest]

Great video as usual Ken!! Money does grow on trees. You just have to call a bank or your investors.

[@aromanmcse]

Hi Ken. Can you recommend a good and trustworthy estate planner in LA. Thank you.

[@addankiv1]

Ken, thank you for sharing your expert knowledge. I took the benefit of following some of the concepts from your past videos. I struggle to scale in brining people to the deal and finding positive cash flow properties. It would be helpful if you make a video on strategies around this.

[@jaredcrenshaw7665]

Dude, what you're promoting is a ponzi scheme.

[@sjoerd6860]

If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem.

[@varunbatra4099]

Hahaha so true, now they are your partners. Want you to succeed.

[@gavnonadoroge3092]

if the bank owes $100 billion, that is the country problem if the country owes $100 trillion, that is the world problem

[@jeffdavis8811]

The only thing that matters is who is making a profit. There is no problem if you and the bank are both happy. What is your point?

[@huebothedog665]

Sure but keep in mind if you owe the bank 100k that’s still your problem. 1 million too. Most people will never gain enough trust from a bank to owe 100 million so any debt will be as much their problem as $100

[@bgrady24]

I’m doing exactly what he’s describing. I own 10 houses, retired from my 9-5 at 36 two years ago. Planning to expand forever.

[@MrTrevorDidier]

good for you!

[@MrTrevorDidier]

He is producing something.. providing housing for people, and providing jobs for trades/banks/realtors/paying government salaries and money into the community through paying taxes. The properties will gain value over time, free up equity, and the debt will go down over time. It's made many average people wealthy and will continue to do so. Odds are this person isn't overextended and is strategic with debt. 90% of millionaires have done so through real estate. That was true 100 years ago; is true now; and will be true 100 years from now.@@TheMasterOfShadows

[@Jekyll_Island_Creatures]

Isn't it harder for you to get loans without your W-2?

[@bishopsdeeplearning555]

nice. i'm 38 and own 8 properties. down payments from last 2 properties came from refinancing earlier properties. could probably retire now but i'm gonna keep acquiring properties until my net cashflow exceeds my monthly paycheck.

[@CallMePreet]

Me too! I retired at 39 with 12 properties. I couldn't be happier with all my low interest mortgages. Cheers.

[@HousesByVic]

Bro would send Dave Ramsey into cardiac failure if he saw this 😂

[@kahvac]

Ken.... Perhaps your best video yet...Pure Gold ! Thank you.

[@alphabeta8403]

2:30 Harvesting cash 3:55 Buy, borrow, die 6:10 Good debt vs bad debt 8:00 Have a long term approach

[@JamesWoods-xy5um]

So what happens when property values go down and/or interest rates go up and the banks are not willing to re-fi? Commercial loans only have fixed interest for a relatively short period of time. In declining interest rate markets that’s fine, but that’s not the market we are in now. What about the lack of non-recourse RE loans to the majority of investors? Your video only shows half of a very two sided equation.

[@asbradd2]

Kenny Mac - Great job on this one. I am sharing this with all the kids I am mentoring. You break things down really well and make it easy to understand.

[@davidglad]

The criteria for success is cash flow must cover debt service and that return on assets must be higher than that debt cost of capital.

[@bobthebuilderhecanbuildit]

I’m a millionaire. Unfortunately I owe a billion dollars… seriously though please use extreme caution when taking on debt!

[@beno2782]

In what way you mean?

[@bobthebuilderhecanbuildit]

@@beno2782 leveraging debt to make money can work, but it increases the risk substantially. If I put $500 into a stock, I could get rewarded when it goes to $1500, or punished if it goes to $0 If I take a loan for $1000 and invest, the same stock would get me $3000, but instead of worst case being $0, worst case is now $-1500 (plus interest) so taking a loan to make money will cost you if the economy turns sour

[@mikepodorski4272]

We have been in a period of time where debt has been cheap and easy to get. We have also experienced extreme asset appreciation, especially in real-estate. We are currently in a commercial real-estate bubble, even in residential. Ken has spoken on this several times himself. When equity vanishes, this model implodes. When rents decrease, this model implodes (Ken is positive rents will continue to increase, even though the data shows otherwise). When they happen at the same time, look out! Debt is necessary to finance business growth. Too much debt is foolish.

[@AdeposiOkupe]

You’re right. I also think it’s not all doom and gloom if you play your cards right. What do you think is the best way to paddle safely with respect to these risks you raised? Ken also talked about having plan b and plan c, in case something goes wrong. I’d also love to learn what his other plans are but what are your thoughts

[@mikepodorski4272]

@AdeposiOkupe keeping equity instead of borrowing against it. Growth is slower, but more secure.

[@wealthelife]

Works brilliantly if you are lucky with market timing. I've seen stories of 20 year olds with 10 properties than made millions in Sydney in the early 2000s. And seen stories of investors going broke during a property market downturn when they had high vacancy rates, couldn't cover the mortgage repayments, and the property was worth less than the outstanding mortgage... recency bias is a bitch. I suggest anyone thinking of this look at the history of interest rates, average real estate prices, average rent etc. for the past 50 years in their particular area, and see how this would have worked out in each 5 or 10 year period during that time. If you couldn't have survived the worst 5 or 10 year period that happened during the past 50 years, you might want to think twice. And don't forget that the next 5 or 10 years could be nothing like any of the previous 5 or 10 year periods during the past 50 years.

[@DancesWithGod]

Ken, OUTSTANDING VIDEO!!! Thank you!

[@kennethrobinson7647]

Easy to say with zerp interest rates. Would love to see your strategy with today’s interest rates.

[@gedb6099]

Todays interest rates are average for a 30 year period. People like yourself wouldn’t have the minerals to do it if they paid you to borrow

[@HousesByVic]

Seeing that rents have increased 40% since covid, essentially nothing is different, just bigger numbers. Adapt to the times, it is what it is

[@huebothedog665]

I want to see how people did it with 1980s interest rates lol

[@CurtBagne]

Just buy fatter deals.

[@paoher4928]

Thank you Ken as always, I really appreciate your videos.

[@pamelarealopes436]

Absolutely one of the best video you have made so far! Thanks for sharing your experience with us Ken!

[@dhowto3005]

Thank you sharing your approach and Congratulations on all of your success!

[@Eden639]

This is a great video! So much good information.

[@lubosimaboshe]

Awesome video thank you

[@monkeyloven]

I wish I would have done this sooner. It does seem so stressful but this is a nice clear video and explained well. Thank you!

[@BotterBro]

Love these type of videos

[@Canadiantravelvlog]

Very good advice. Thank you Ken. You are the best.

[@Elkemartin213]

The banking situation is a reminder that Fed hikes are having an effect, even if the economy has held up so far,” It’s precisely at times like these that investors need to be on guard against the next certainty. First SVB, then signature bank and now first republic bank, these are all the signs of yet another 2008 market crash 3.0

[@KarlGrabe955]

My main concern now is how can we generate more revenue during quantitative times? I can't afford to see my savings crumble to dust.

[@Greghilton3]

Sincerely it's best to seek an advisor right now, unless you're canny yourself. As a business owner in both the service industry and eBay reseller of all product categories, I can tell you we’re in a deep recession and everyone is running out of money.

[@Davidstowe872]

It's true that people minimise advisors' roles until they experience regret for their errors. I recall that, in the midst of the COVID-19 pandemic in early 2020, I had to find a way to survive, so I looked for licence advisors. Thank goodness I found someone with decades of experience and practical knowledge; thus far, my $325K stagnant reserve has returned almost $1 million from subsequent investments.

[@Quason788]

How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings?

[@Davidstowe872]

The advisor that guides me is Vivian Carol Gioia, most likely the internet is where to find her basic info, just search her name. She's established.

[@Gutenmorgenside]

Fascinating, thanks.

[@user-lu4cc8lp5v]

Thank you for the Turo reference Ken thanks to you and Robert I use opm for my Turo fleet you guys saved my life I’m Roman from Miami thank you

[@accordio321]

This is a big moral problem, it is predicated on an irresponsible expansion of the monetary system. It will only continue as long as the music plays. When the music stops, there won’t be any chairs to sit on. The ever expanding monetary system is literally robbing peoples savings in the form of purchasing power and allowing others to lever that money. It’s very troubling, someday it will break down.

[@wealthelife]

In the end it is a zero-sum game, with some modest long term average positive return overlaid. Over a couple of boom-bust and interest rate cycles the average return might be 2% real (after expenses, taxes, inflation etc), but some people will have made a fortune during 'good times' and others will have lost a fortune during 'bad times'. Overall, it is just transferring existing wealth from one group of people to another. Due to differences in experience, knowledge (and luck) it tends to be a larger group of people making smaller losses to transfer sizeable gains to a smaller group of people. Doesn't really add or remove wealth from society as a whole, but is fun for those that end up winning 'the game'. ps. Monetary expansion is fine if it is in line with a) population growth, and/or b) productivity increase. Otherwise it is inflationary in the long term -- so it can rob people's savings via reduced purchasing power (if they are in cash rather than in assets that keep up with inflation).

[@leadgenjay]

Great insight on using debt strategically! For entrepreneurs, it's crucial to understand the difference between good and bad debt. Good debt can generate income or grow in value over time, like real estate investments, while bad debt doesn't increase your wealth and often has high-interest rates. Always assess the potential return on investment before taking on debt.

[@failforwardfast8609]

Thank you Ken.

[@user-ek2ui4sv9c]

Great video, thanks 😊

[@93notchback]

Great video Ken

[@cashcow4383]

Really loved this video andt he straight forward explanation

[@user-vd5lt9wv9t]

Ken, this is your best video

[@jamesdanny3137]

I started watching you in middle school, a month ago I started investing into the s&p 500. My portfolio is only a little over $68k, but it's a start. Plus I can't even legally get a job, so I'm doing decent.

[@gavnonadoroge3092]

@jamesdanny3137 so where did the first $100000 come from?

[@MCBC_5]

I agree using debt magnifies income if used to create assets

[@sebastian-lo4xv]

thank you

[@aromanmcse]

KM is the MAN!!!

[@roccochiappone]

Awesome video, I will use good debt to buy income producing assets such as realestate apartments or a business.

[@Starkham]

Hit 200k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started with 14k in last 4months of 2023

[@alals6794]

He is making it up...........

[@jimmytvglobal]

Very useful info

[@aromanmcse]

Ken is the MAN!!!

[@andrewleyba22]

Awesome!

[@yorkiesforsalellc7546]

Hey Ken. To start with Thank You. I read and studied two of your books prior to the pandemic. ABC's of Buying Rental Property and The Advanced Guide to Real Estate Investing. I got so excited I bought 9 two hundred thousand dollar single family homes in one year for rentals. They all cash flowed from day one. I had heard about nest buying and all of the homes are in the neighborhood where I live. Very safe, convenient, good schools and jobs. I put the minimum twenty percent down and financed the rest. I got the twenty percent from a HELOC and savings. Then the pandemic hit and over a year all nine homes appreciated one hundred thousand each. Can you believe it. I invested less than 40.00 in your two books and made over nine hundred thousand. Recently I did cash out refies on all of them and am looking forward to investing those proceeds in MC Companies. By the way I love your plan English videos and really hope to meet you some day. Keep up the great work!

[@jomedial]

That’s great

[@AdeposiOkupe]

Wow. That’s really impressive. I’m sure Ken would love to meet you and hear your story personally

[@yorkiesforsalellc7546]

Thank you.@@jomedial

[@yorkiesforsalellc7546]

Thank you so much. Most of it was just by happenstance as far as all of the appreciation. I had know idea they would go up like that. I'm just glad I read the books when I did. Have a great and successful day.@@AdeposiOkupe

[@rik-keymusic160]

I don’t think people just know enough about the financial system to get involved with it, its kinda tricky and trusting people in this business aswel. I don’t think they teach how to get wealthy in schools because often these teachers aren’t wealthy themselves… glad we have KZbin now !

[@TXetc]

Dave Ramsey seething 😡 punching the air rn

[@APICSKH]

It’s not every Joe’s cup of tea

[@SEANPOL203]

Dave doesn’t take risk anymore

[@scottkidd1969]

Thank you for a great explanation of good debt. If you are using debt to gain cash flow, it can be a great thing to grow your wealth. Great point that people are ok with debt to gain more liabilities but assets not do much. Thank you

[@michaelgoss3039]

This video was very educational and important to understand the ways of money works in the world Wish I could be on your team

[@mr.incredible8235]

great video

[@michaelwarriax3895]

Thanks Ken! Great video! I would love to link up with someone in Colorado that could help me do this… I have spent thousands to do exactly this and still in the same situation…Definitely interested in multi family and I have a great idea with parking lot investments that can be used as a template to rinse and repeat

[@unknown4554]

I bought a 5bd 3br home and rent out the other rooms. I get 3300$ in rent but minus the mortgage and utilities. I cash flow 300$

[@user-oc6wv4gj1j]

Smart contracts automate various aspects of real estate transactions, such as property transfers, payments, and compliance checks. By eliminating manual processes and reducing the need for intermediaries, smart contracts streamline transactions, significantly reducing the time and resources required to complete a deal.

[@Rylee-hy6jr]

So when you do your cash out refi do you only redo the loan for an amount that your current rent will cover the payments or do you just go up on your rent?

[@MarlonKingShow]

Thank you, so how do i get started? With minimal caputal to start? Im in the UK btw

[@calledout4437]

Except why the hell would I refinance my 3.5% rate for 7% today? Heck no! Inflation has ruined investing. Even putting 50% down, I still can't make money off of a rental. At least not where I live.

[@LisaPimentel2021]

You take out a HELOC on your home

[@utpharmboy2006]

​@@LisaPimentel2021that is exactly what he said he is not doing because rates are 7% and probably a little higher for a heloc

[@casasdenick]

It is possible to make money even with current rates. I'm a lender and have these deals coming across my desk daily. If you find the right deal, whether a value-add, off market or otherwise, you can still make a profit in today's market.

[@utpharmboy2006]

@@casasdenick yeah but there are generally a lot more better ways to make them

[@casasdenick]

@@utpharmboy2006 In my opinion the how when it comes to "making a profit" in business is largely a personal decision. For myself RE is what I know and love. It works and pays well for my family. Regardless of personal opinions or beliefs the numbers work on our deals. Others make money with REITs, or tech stocks, some re-sell sneakers and others work 3 jobs. My advice is to do what works for you.

[@matthewjames1172]

this is NOT how the system works: "the bank takes that money from the savers and loans it out..."

[@mulalobusinge]

Very true...they digitize it into existence...double book keeping

[@rhuffstedtler]

It’s a simplification, and it’s fairly close to how it used to work. Today, when banks loan money, they turn around and sell it to someone who creates a collateralized debt instrument (the things that blew up on us back in 2008), and sell chunks of it like a bond. But on the front end, the bank still has to maintain their asset ratios in order to originate new loans.

[@matthewjames1172]

@@rhuffstedtler "bank still has to maintain their asset ratios in order to originate new loans"...I don't think this statement is correct...when banks issue a "loan"...both a deposit and a liability appear on its balance sheet simultaneously.

[@bongdallion3435]

Does this apply to other income generating assets other than real estate?

[@moviehipster]

BAM! (BEST ALL-TIME McELROY) I Listen to everything, KEN just laid it all out in one speech, the whole nutt! Listen and re-listen, KEN'S truth bombs will set you free! Nice Work Ken! This one goes into the bible, canonize it.

[@victoriapiper1952]

What percentage of your total RE portfolio is debt? What range do you like to be in?

[@JanKowalski-tk7zl]

In fact, you run a company whose business consists in purchasing buildings on credit and repaying this loan from the fees paid by tenants. As with any activity such as running a business, there are a number of both positive and negative issues associated with it. Not everyone has the mental structure that allows for such activity, I would say a decided minority of people. That's why there are few entrepreneurs and a huge number of people working full-time. Regards !

[@gregs8685]

What is the cap rate on RE investment right now? RE is a bad trade until rates and values come way down.

[@meganoleary584]

My husband and I bought a property with two houses on it about three years ago. We remodeled them and financed the property and we have tenants in there who are paying and it’s cash flowing. We are now building two more units on the property borrowing money from a family member, and just paying it off in five years, those two units will cover that payment and then after five years it’s going to be all cash flow it’s hard to think about refinancing because our interest rate on the property is around 4% so I’m not sure if it would be a good idea to refinance the property and pull cash out in the future even though the property is going to go up in value so muchafter we’re done but it’s going to be cash flowing a ton after five years kind of a hard decision on what to do in the future since we have such a low interest rate

[@modernsaver-km5ex]

This worked over the last few decades, I’m not sure it will continue to work over the next decades…

[@Rob-ip1km]

The government will continue to print money and create large amounts of inflation for the coming years IMO. So buying hard assets and using the banks money to leverage inflation will still be a great strategy.

[@modernsaver-km5ex]

@@Rob-ip1km the concern for me is keeping the tenants in if we fall into a long painful recession and millions lose there jobs

[@gregs8685]

Yeah let’s see how this plays out. Bankruptcy is my bet.

[@Rob-ip1km]

@@modernsaver-km5ex me too. Either inflation will rocket higher again or we get some deflation. I definitely wouldn’t be buying now. If deflation happens I’m looking to buy multifamily in early 2026 or single family in 2026/2027. If inflation makes a new high or does a 3peat like the 70’s - I’ll be wishing I had bought something now instead of waiting 😭.

[@lettruthprevail9820]

Interestingly though is lately many of these rich are selling stock instead of borrowing against it

[@goaliem288]

I have 5 single family homes, when I’ve looked into the cash out refinance after 10 years, I have had trouble getting the rental to still cash flow with the higher mortgage amount and interest rates in these days. Are you experiencing this as well? Or did I potentially buy in the wrong type of rental market that cannot support the needed rent for a cash out refinance.

[@bobbyvette]

He makes it sound better and easier than it really is. It takes years to obtain equity in a property to be able to cash out refi and the banks only allow so much that you can cash out

[@bishopsdeeplearning555]

depends. "money is made when you buy". if you can get a deal on a property in a rapidly appreciating market, its not uncommon to be able to pull out 100k within a year or two.

[@ruggiero541]

What’s your thoughts on using margin then? Buying “higher” yielding dividend stocks and using margin to purchase them. I’m looking at it like real estate, although I could be looking at it wrong. Use margin to buy high yielders. Use 50% of the dividend payments to pay back margin. Use 50% as dividend reinvestment to add more shares. Technically the company paying the dividend is paying the loan?? Then like a mortgage, 10-15 or whatever years later the margin is paid back and you have the shares on the high-yielders continuing to pay monthly.

[@trenyarae]

And yet, there are more TEACHERS who are millionaires than just about any other professional career!

[@ConstantinUngureanu]

For a day trader that trades options where can I find very good accounting that understands that this is a online business and so on ???

[@user-bq1zz2fr5n]

Shoul the property be places in an LLC from the beginning?

[@dealforbet8888]

Banks 😢

[@jackfromphoenix9065]

I need a good bookkeeper/ accountant- do you have anyone you recommend?

[@susankrause3079]

Hi Ken, it would be great if you could talk about people who follow this plan buy a house that Cash flows on day one and then property taxes insurance and everything else goes up in huge amounts and then the property no longer Cash flows. What are you supposed to do then????

[@annaalbright5933]

Hi Ken, I understand your message in this lesson. However, a couple of days ago, I watched another KZbin from you which I believe implied we should prepare and have cash reserves. I'm a small investor, have no debt on my properties except for the typical liabilities 9:13 9:13 i,e. Property tax, repairs, etc. I have plenty of cash reserves and all properties are paid off but should we wait to refinance and invest? Thannks,, Anna Albright

[@danw7864]

Well that explains all these KZbin videos coming out

[@TheMasterOfShadows]

Bot views and lots of fake comments too.

[@privateprivate1914]

How about expenses for repairs/maintenance? That’s debt and can definitely effect cash flow.

[@TheMasterOfShadows]

Yeap, this is complete trash people still believe someone will just invest in you to create debt, debt is trash. Cash flow is so much better then all this debt.

[@wealthelife]

Expenses are an 'expense' (hence the name), not a debt ;) But you do have to compare net cashflow (rent - expenses) to the loan cost (interest). And sometimes you can't just pay the interest -- the bank expects to get the loan paid off over 25 or 30 years -- so your net cashflow (rent-expenses) has to cover total loan holding cost (interest+principal repayments). Yes, the principal repayments are adding to your NW (as the loan balance is decreasing), but you still have to be able to service the debt. So it is NOT as simple as rent>interest=good investment.

[@wealthelife]

@@TheMasterOfShadows Not quite true. If the total return (income+capital growth)> total cost of borrowing (interest), AND you can cover the actual cashflow cost (eg. P+I repayments) from normal cashflow (eg. salary) in case something goes wrong (eg. can't get the expected rent and property prices drop so the asset is worth less than you paid, or the mortgage balance) and you hold on for eventual 'long term' price appreciation (not guaranteed, no matter what people say), then 'good' debt for investment purposes is OK (but risky). All depends on your 'risk tolerance' and how much return you 'need' (or 'want') from your investments. If you goal is to slowly grow wealth, than investing without debt is fine (aka Dave Ramsey approach), but if you want to increase returns (and accept higher risk) then borrowing to invest will increase you chances of higher wealth grow (but also increase you chance of going broke from 0% to something higher than 0%). It all depends on your personal situation and goals -- no one answer for everyone.

[@TheMasterOfShadows]

@@wealthelife Thank you for the comment. I agree with most of what your saying. But what i'm talking about is this fairy tail that there is this shark tank ready and willing to give you capital for you to invest to make you yourself wealthy with debt that you incur. So they take all the risk and you profit. I believe you should invest your own money and create cash flow yourself and don't exploit the debt bubble for your gains.

[@ericjames7819]

Would be interested in hearing ypur experience of going through the GFC. How you managed the risks of debt during that time.

[@KenMcElroy]

Great idea. We will record that soon (ken's team)

[@TheMasterOfShadows]

Sell off bad debt to a fake company, have company go bankrupt and sell off assets and allow bank to collect from the government with bad write offs, banks sell homes not sold and pocket full prices. Win win, let the people pay for my bad mistakes because i'm rich they can suck it.

[@3joewj]

You down with OPM??

[@user-oc6wv4gj1j]

Decentralized applications, or dApps, are software programs that run on a blockchain or peer-to-peer (P2P) network of computers instead of on a single computer. Rather than operating under the control of a single authority, dApps are spread across the network to be collectively controlled by its users.

[@KaayJaay]

O. P. M. Other peoples money. Leverage.

[@ElJefe360]

I just hope Dave Ramsey don’t listen to your show, otherwise he will have a heart attack 😂😂. Great info Ken you are the Master!! Your channel is pure GOLD with all the information you provide. Keep up the good work 😎🙌🏻

[@maxpaine1000]

😂😂😂

[@bensmith4563]

Dave Ramsey knows how this works he just failed at it years ago because it's a simple concept but quite complex in practice dave ramsay pushes having no debt because it's safe and for most people safe is good

[@amirsalehian2797]

What happens when the market crashes with this strategy? I feel your strategy will work if the market continuously goes up. Please explain.

[@desiseveright]

Purchased cattle on my own expense, this spring I take on debt for heifer replacments, good debt.

[@MrLasox]

Could you make a video when about when you don't have anything how to start with one property and then having two, three or more with the numbers etc? Because like you said many stops when they are buying a home because they are "forced" too move there. So therefor they would have too be paying their own loan, not buying anything more and not rental it out too other people. And when people are paying down their own loan will alot of your salary go back too the home. Loan, maintenance, etc. and because of that like i'm trying too say is that much of the income will be "forced" too the home, and most people would also "save" into the home by paying it down faster and therefore it's harder for many people too set up whole another saving account that's enough for the bank down payment because all the costs family have now with their 1th home. Many banks would also deny you when you don't already have a family that are going too rent the second home? So it's kinda hard too start the whole thing too actually become decent moneyflow.

[@soniasbooks]

If the value of the asset goes down does that create an issue? Or do you keep enough equity in the property to cover that possibility?

[@Hussain-Almuflahi]

The value of an asset should not matter, unless you want to flip it or need the money fast. The goal is to hold as long as you can. Your tenants are paying off the mortgage for you. Or wait for a up cycle in properties.

[@modernsaver-km5ex]

The bigger issue is if you have long vacancies

[@nickh2053]

You wouldn’t refinance if the value was lower.

[@Hussain-Almuflahi]

@@nickh2053 ahh, you was asking about refi. Then wait it out. It was much easier from 2008 to now. Every year it was going up..

[@soniasbooks]

@@nickh2053 You couldn’t without writing a check to cover, but what if the loan was due and you had to? I thought commercial loans usually come due in 5-7 years?

[@Ladjoyed]

Hi ken, would you still go all in debt if you were in Canada with that rate that you have to change every 5 to 7 years. How would you protect yourself aigainst big variation?

[@wealthelife]

In Oz you are usually stuck with a variable rate loan for real estate purchases, and at best can get a 'fixed rate' loan for a period of 3 or 5 years -- but at a higher interest rate, Can be really painful (and produce a property price crash) if a lot of people borrow to purchase a rental property at 3% with a 4% rental yield (so just cashflow positive after expenses, maybe), but then see interest rates spike and their loan interest rate go to 7%. The US banks doing 30 year fixed rate mortgages probably explains why a lot more US banks go bankrupt every time there is a property price decline in the US, or interest rates go up.

[@hyperchannel4048]

Well the thing is that the Banks do not need lenders, they get the money from the Central Bank at much better conditions than from their customer. They will.always charge you for deposited money at your account. You will never get an interest higher than inflation from them.

[@JP-gb2sy]

It's all great until you have to come up with 20, 30, 40 grand out of pocket to buy the 1st home. That is the 1st main issue that most people can't or haven't been able to overcome. Yes, once that's done it gets simpler, but that 1st down-payment is a pocket breaker.

[@larrylamb3480]

Ken, what happens with a critical downturn of the economy and tenants lose their jobs thus they can't pay your mortgage and if you have alot of houses or apartments ,your in trouble ! I know it's a risk but do you want the stress which down grades your immune system for preventing diseases,right ?

[@jonesmatthew7511]

OPM = Other peoples (future taxes and/or purchasing power lost to inflation) Lets just call it for what it really is.

[@rayne5368]

I can't imagine having so much debt in my life. But how do I do it? And how about if I do not have any descendants?

[@Maurinusa]

Debt is leverage AND risk. A lot of people have looked smart when the interest rates were low and real estate went up quickly but that doesn't last. A lot of people go bankrupt when the trend reverses and rates go up while property values drop

[@Mr.Wonderfull]

wow you are a fricken genius

[@dougg4633]

I own out right a single family rental property ($400k value) According to this advice... I should cash out refinance ($300k) at a 7+- % rate. Why not just keep the better cash flow and invest that ?

[@IndianaEd]

Dave Ramsey is shaking his head.

[@Maulenstories]

Ken should debate this subject with Dave Ramsey lol

[@modernsaver-km5ex]

Ramsey did this years ago I believe and lost millions!

[@SEANPOL203]

Dave risked the house back then now he won’t risk a dollar

[@MrMobi007]

I wish I had $700,000,000 in debt, working on it!

[@robertmcmanus8465]

This is a great strategy and explanation. Just remember kids leverage cuts like a butter knife on the way up and like a sword on the way down. Markets going up or down is a product of liquodity in todays world.

[@SC-hc7vy]

First step is how to get the bucket of gold , “good debt,” to invest.

[@calebkang5544]

I agree with everything you said except the timing part of it. If you enter the market now, you're stupid. No property will cashflow after expense and debt service.

[@tlocs2842]

Absolutely makes no sense at all that I'm gonna take cash out of my house at an interest rate and do What with it?

[@kennethrobinson7647]

Debt is pulling future productivity into the present. That’s it.

[@MichaelSmittySmithScottsdaleAz]

Good information. Easier to trust Ken than Grant Cardone