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 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.

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