Episodes
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There’s been some massive swings of instability in the stock market. I’ve got enough drama in my life. I don’t need it with my money. Little deals produce little cash. Little deals will get hurt when the market corrects. All the foreclosures were small deals: 2, 6, 8 , 10, and 12 units. What’s the problem with these deals? They cannot cash flow. It’s back to termites, tenants, and toilets. I tell you the truth—you should be in at least 32 units.
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Do you like drama in your life? Iâve got enough already. I don't want drama with my money. Two mistakes people make after they work hard for years:
1. Never invest
2. Invest in the wrong thingIf the stock exchange collapses or if Bitcoin goes up or down, I get monthly checks. Iâm paid to wait while my property value goes up. Thatâs the certainty that you need with your investmentsâyou need mailbox money. The more scale you get, the more stability you have. Most people canât buy scale. Thatâs what Cardone Capital gets you:
1. Scale (More doors is better)
2. Income diversification (a lot of renters paying monthly rent)
3. Middle of the road rental pricesMost people look for salaries but they should be looking for opportunities and the right people. How do you get started? Look at everything. Start looking at apartments. Walk properties!
âNothing pays better than a business that pays.â
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Episodes manquant?
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When it comes to investing in real estate, how do you know what market to get into? If you already follow me, you know that you should go after big apartment deals. Purchasing a home is not an investment. The bank sold middle America on the dream of owning a home. When you buy a houseâyou donât really own itâthe bank does. Never buy anything that you canât own. When you really know your real estate market youâll:
Be in itâlove it
Keep itâlocation is growing
Produce Income -
Don't let big numbers keep you from investing in real estate. If you collect cash flow over time, appreciation will happen. This isn't crypto, this isn't speculation, this is real estate—the safest, best investment you can make if you do it right. That means buying the right property at the right location at the right time. This is what I do at Cardone Capital, and I invite you to join me.
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When it comes to investing, I’m taking the real estate play every time. It’s a real asset that you can touch, feel, and see. It generates income that I can leverage for other investments, just to name a few advantages. I own crypto, so I'm "invested" in both. What are the real differences though between Real Estate and Crypto?
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What should you be investing your cash in? Are you looking to get rich quick or get rich for sure? You wonât get 2000% returns in real estate like you might in crypto, but you can get 20%. Crypto has a long way to go, but it still goes up and down. The number one question Iâm asked, is what do I do with my $2,000 or $5,000? 2k, 5K, 10K are not investmentsâyou need 100K. Think about what you would do with your last $100,000. Stocks and crypto are easy. Anything real is work. Marriage, business, and real estate are real. I work hard for money and I work hard to keep it. Any investment you make should:
A) Increase in value.
B) Protect your initial investment.I donât know what Bitcoin is going to do next year, but I know real estate will still retain its value. Bitcoin is not investing, itâs speculating. It would be nice to get rich quick. But I want to get rich for sure.
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Buying a House Vs Investing in Apartments - Real Estate Investing Made Simple: Buying a house is not an investment, but it could be a place to save money. There is a big difference between a saving vehicle and an investment vehicle. Investments pay you every month while you pay into your savings every month, right? So do you want to pay or get paid every month? Most people don’t own their home. The banks own it (your mortgage) and the government owns it (your property taxes). No matter how you look at it, a house is not the best place to put your money. Your parents may tell you otherwise, society and the media will tell you otherwise, but buying a home is simply not a good investment. If you want to get rich, look into multi-family as an investment vehicle. Learn more at http://www.cardonecapital.com
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Uncle G brings it for free every Monday with captain Ryan. Today on the show Grant advises to not chase your budget. Finances are won on offence. When you donât have money, you need to get other peopleâs money. Whoâs got your money? Donât buy deals you wouldnât look at if you had a bunch of money.
The fact is, we all get stuck finding money no matter how rich you are, so the thing to keep in mind is the deal is what matters, not how much money you have. Most people do deals based on how much money they have. There is no such thing as no money down because you will have to exchange something with themâsooner or later the money will have to come from somewhere. Where can you go to raise money? Itâs out there, you just have to find it. Act as a broker and act like you know what youâre doing.
Here are 3 things to ask before going into any deal:
1. Ask a woman to tell you how she felt around the property. Just like when you go into a room, you know how it feels. How does the property feel to you? This is subjective, but ask yourself this.
2. Go over the numbers, the T12. This is objective. Do the numbers add up and make sense?
3. Go look at worst case scenario. Go look at the worst year ever. Will it still break even if another 2008 happens?
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There are 3 main ways to make money in real estate. #1 is the Wholesale Flip. This is a sales job. You don't need to invest money if you want a sales job. There’s nothing wrong with it but it’s not really real estate investing. #2 is the Small Deals. These are the little duplex's, quads, and anything under 32 units. Most people do these because they have a budget. #3 is Big Deals. You want to be in 32+ doors, even if you have to collaborate with others to do so. The biggest difference between #3 and #2 is income. Do you want monster deals, baby deals, or a sales job?
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There is a shortage of great product out there in multi-family. The most important question is how to find a deal, and how do I get them to sell me that deal? You will need to write a LOI (letter of intent). This is a written document showing the intent to purchase something. You need to sell yourself in this document. Here are 5 additional things you should cover:
1. Price
2. Closing Date
3. Financingânon-contingent
4. Due Diligence
5. Deposit -
Money is the easiest part of buying real estate. The hardest part is finding the right deal and getting a broker to listen to you.
1. When did this last trade?
2. How much did it trade for?
3. How would you rate the location on the scale of 1-10?
4. What is your debt-underwriting for the property?
5. What do you like most about it?
6. What do you like least about it?
7. What else do you have that is either unlisted or off-market?
8. Other than price, what terms will motivate this seller?
9. Who is the type of buyer for this property?
10. Do you have a favorite buyer at this time?
11. How do I exit this deal later?
12. In your mind, what is the play on this deal? -
What are the benefits of renting vs. buying? Most people think the benefits of buying a home outweigh the benefits of renting but this is false. Most people never take into account the cost of opportunity lost. Itâs almost never better to own. Instead, you should rent what you own. The more doors you have the better.
1. Renting is cheaper.
2. Nobody should own.
3. Even rich people shouldnât own, although if youâre rich, it doesnât matter if ownâbecause youâre rich.Buying leaves you with no mobility. Freedom should be your mantra, not a house. Donât use the excuse, âWell, Iâve got to live somewhere.â That doesnât mean you need to buy because you donât just need to own something, you need cash flow!
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1. Youâre not buying: If you donât buy, itâs because you donât know what youâre doing
2. Buying too small: This happens when you become scared thinking that big deals are riskier. This is false, small deals are riskier.
3. Buying on a Budget: donât be confined to what you can âaffordâ. Donât have a budget when you buy, have a budget when you own.
4. Believing the Pro Forma: donât put significance on a fairy tale.
5. Underestimate expenses: taxes and insurance arenât fully understood.
6. Not funding Capital costsâroofs, carpets, etc. need to be funded, so set some aside for when you will need it.
7. Over leveragingâborrowing too much money.
8. Under leveragingânot borrowing money.
9. Buying on CAP rates: If youâre only looking at 8 caps, youâll miss out on good deals that donât fit your criteria.
10. Not knowing: ignorance is not bliss. -
When you buy a property, you need cash flow. There is a reason why cash is called king. You want big cash flow every month when you make an investment. But how do you analyze the cash flow of a property?
1. Income â VIP parking, laundryâŠanything that people need and want that you can charge extra for.
2. Expenses â Youâre going to have payroll, landscaping, utilities, insurance, repairs, taxesâŠthese are all things that you canât get rid of.
3. Debt â Principle and interest on the loan.
4. Cash Flow â Are you making any money on the deal or not?
If itâs 1 door rent it, if there are many doors, own it. Time and cash flow = appreciation. If you buy the right property and make the right moves with it, time and cash flow will get you a 2X to 3 X returnâguaranteed.
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The NOI is Net Operating Income. You have income, expenses, and then you have NOI. 5 units and above are dependent on NOI. Itâs what the price is based off of, what the banks look at, and what the cap rate is made from. To determine the NOI you take Gross income minus expenses = NOI. The higher the NOI the more cash flow itâs going to produce. 3 questions to ask in multi-family:
1. How much will you pay for the property?
2. How much will it operate for?
3. How much can you sell it for when you exit?You can make money with any of these three ways, but ideally all three. Keep in mind that as soon as something comes on the market and it becomes a good deal with a good NOI, you often have over 10 or more buyers coming in immediately. Loopnet is the garbage dump for properties that arenât selling. As an example, there is a deal for 14 units in Athens, Georgia. It costs 750K so youâd put 190K down and finance 460K. Itâs 70% occupied. The NOI is 45K and the debt would be 32K annually. That means youâd basically be putting 190K at risk to make $1300 a month. That deal probably isnât worth it! The bottom line is you have to know what you are doing with any investment.
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If you had $1,000,000 and you had to hold it for 10 years, what would you invest it in?
Crypto?
Gold?
Stocks?
Real Estate?I choose Real Estate. Why?
1. Itâs real.
2. It provides cash flow.
3. It gives me leverage.
4. I get appreciation.Iâve made a lot of mistakes in real estate, but losing money isnât one of them. Buy lower CAP rates, that will make sure you have a better location. Time will take care of your appreciation.
Donât buy on a budget. If youâre buying on a budget, youâre better off being an investor riding on a deal with someone else. Iâm inviting you to invest in Cardone Capital to buy massive deals in good locations that will provide stable returns as we wait for time to appreciate.
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How do you determine if youâre at the top of the market? When cranes are in the air, beware. If you see cranes everywhere, you are at the top of your market. We havenât had a real estate collapse since 2009âthat is 8 years of prices going up. You donât want to buy at the top! There will be a pull back, itâs just a matter of when. Builders over build. Yet every 10 years, apartments double in value. Always keep in mind rents, rates, and supply.
1. Know you marketâThis is a prerequisite for doing anything in real estate.
2. Know the rentsâWhatâs the cost to build?
3. HistoryâWhatâs the history been on the place? Go back 5 years on the T12âs.
4. Plan for a pullbackâThe market wonât go up forever. Be careful not to buy at the top!
5. Whatâs the market going forward? Look to the future. The place to learn real estate is not in a book, itâs in your neighborhood.Analyze the deal you live in.
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In the last 20 years REITâs paid out an average of 8.7% while the S&P paid 5%. I assure you there are better ways to invest. Real estate always comes back over time, it always provides cash flow, itâs realâitâs not a stock or pieces of paper. And itâs definitely not crypto currency. Here is how you can force appreciation in any market, anytime:
1. Improve the Insideâspend money to improve the interiors of units.
2. Improve the Outside âspend money to improve the exteriors of the complex.
3. DebtâRedo the loan and get your money back.The more you invest in improving the place, the higher you can raise the rent and change the tenants. This will literally force appreciation. If you have a machine that produces income, you need to figure out how to make that machine produce more income and youâll appreciation.
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How to Get Your First DealâReal Estate Investing Made Simple with Grant Cardone...Here are 4 things you will need to do to get your 1st deal in real estate:
1. Find a dealâ People think itâs easy getting into real estate but itâs not. It takes reading report after report. You have to find a deal and thatâs harder than people think.
2. Analyze itâDo you know what to look for in a deal? Do you know the terminology?
3. Finance itâ Itâs expensive getting a big deal. Buildings with 50 units or more are out of reach for most people. Most canât get the debt, let alone the down payment for a $30 million-dollar deal. This is probably the biggest problem that scares people away from investing in multi-family
4. Manage itâ Every building comes with tenants, termites, and toilets. If you have the money but not the time, if you have a job that youâre making a lot of money with, if youâre the CEO of a company you donât have the time to work with the tenants, termites, and toilets that come with a property.
You can be a passive investor and not have to worry about finding the deal, analyzing it, funding it, or managing it. Those are the problems Iâve had and the problems youâre going to have if you go at it alone. So Iâm going to offer you something.
To qualify for my offer, you need 3 things:
1. You need to be an accredited investor
2. You need to love real estate and be a positive person.
3. Visit https://cardonecapital.com/ for more -
Today on the Real Estate Show I take callers and review deals. Watch me walk the callers through my thoughts as I do the numbers. This is how you buy real estate. Don't just look at one part of the deal, look at all the numbers. If you have 3,4, or 5 units, put a big package together and sell them as one deal. This is what I do, accumulate a number of deals together, package them as 1, and the pig will get lost while the jewels will stand out—and you will get a premium. If you don’t want to handle toilets, termites, and tenants, come and invest with me. Get your money out of the bank and invest with me, I won’t let you down because I won’t let me down!
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