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The downturn of 2008 nearly drove Marc King into bankruptcy.
During a Thursday morning session of Inman Connect New York, King — who today is the president of Keller Williams — said that he had $2 million in debt at the time of the Great Recession. Along with various other bills, that meant he had about $20,000 per month in expenses to pay.
Financial advisers suggested bankruptcy, but King instead sold his real estate company to try to get out of the hole. Suddenly, King had no job and a lot of bills he had to pay.
“If there was money left over, my family got to eat,” he said.
King eventually did make it through the downturn and thrived, finally becoming president of Keller Williams in early 2021. And during Thursday’s session, he shared his strategy for making it through economic and housing downturns — with his argument being that the present is actually a moment in which good real estate professionals can thrive.
“I’m excited about the market we’re in,” he told the packed Connect ballroom.
Get out of debt
King’s first piece of advice was that during downturns, real estate professionals who don’t have to service debt have a major advantage.
“The reality is that not having to service debt at the agent level at the brokerage level or at the corporate level is one of your superpowers during a shift like this,” King said.
His evidence was his own experience; King said he was the top agent at his board in 2008 and had a net worth of multiple millions of dollars, but that wasn’t enough to fully insulate him from the challenges of having significant amounts of debt.
Build a budget
King’s next suggestion was for agents working in a downturn to “create budgets for both business and personal expenses.” He argued that agents who understand budgeting can be more valuable to their clients than even dedicated financial advisers. And experienced real estate leaders can also help buoy up their team members and less experienced agents with good planning.
“Understanding these financial principles will not only carry you through,” King argued, “but will carry the people around you through.”
Relatedly, King also argued that members of the housing industry need to hold their investment dollars accountable too and build solid financial reserves.
“In 2008, if you had 12 months of reserves you flew through that market,” King said.
Build passive income
King asked the Connect audience Thursday how many people owned investment properties. Most of the hands in the room went up. But he then went on to say that broadly across the entire agent community, only 8 percent of industry pros actually own rental properties.
That, King argued, ought to change because investing in real estate is an invaluable tool for wealth building in the U.S.
King also said agents should invest in real estate so that they become experts on the topic who can better advise their clients.
Stop and look
King’s ultimate advice for thriving during a downturn is to slow down and evaluate “when everybody is panicking and running the other way.” And he also pointed out that during the last downturn, Keller Williams grew.
His point was that hard-working and smart agents can build their business during the present, even if the market itself is slowing.
“This is a time,” King concluded, “to think about thriving.”