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In my humble opinion, real estate is the best way to grow your wealth. If you want to get super rich (think billionaire) get involved in real estate — but I’m not talking about just any kind of real estate.

For example, a home is not an investment, because it doesn’t pay you each month — you have to pay it.

It’s a liability to me, not an asset. Not only does a house leave you less mobile, it ties up your money so you can’t use it for real assets.

There are many indications that multi-family real estate investments will continue to be great looking into the 2020’s and beyond:

• 75 million Baby Boomers are retiring
• Many of today’s apartment complexes may be converted to retirement communities in the future
• Many millennials aren’t buying homes
• It’s getting more expensive to build new apartment units

Your first challenge is simply getting a down payment. Once you do, it’s easier to get a loan on a multi-family unit than any other piece of real estate. Multi-family is the easiest way to get rich once you’re in the game!

Let’s say you can find a 49-unit property priced at $35,000 per unit with an 8% cap (the return on investment based on the income a property is projected to create) for $1,750,000.

If you pay cash for this deal at $1,750,000, you would make $140,000 free cashflow per year after expenses. With $450,000 down and financing $1,300,000, the debt payment would be $78,000 per year. This would make you $62,000 cash flow per year. This cannot be done with a home, period.

For the vast majority of people, college never leads to riches, nor does a home. If your goal is to build up $300,000 of equity over 30 years, then buying a home is a way to park your money the same way you would in a savings account or under a mattress. If you want to leverage your money and grow wealth, buying a home is not the way to go.

If you go into multi family real estate investment the right way, over the next decade it could be the best investment strategy of your lifetime — and I put my money where my mouth is. I currently own almost 5,000 apartments and will soon have over 10,000. They are not building enough multi-family apartment buildings to keep up with demand.

If you want to get involved in multi-family real estate, start with a minimum of sixteen units, avoid single family residences and condos, and only buy multi-units at one address.

If you struggle with producing enough income to save enough for a significant down payment, you can partner with me in smaller amounts.

Be Great,

GC

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That begs the question, what stock and what real estate are we talking about here?

How long is the investment period for?

Go to Google and there’s not one data report on commercial real estate vs stocks. But I’m here to tell you that if you take one of the best stocks, an Apple or a Google, and compare it to a good piece of property like an apartment building, there are 3 main reasons you should go with the real estate OVER the stock.

#1 Control

You have more control in real estate than you do with stocks. When you buy a stock, you don’t control what happens to the business—you just hope it goes well.

#2 Leverage

You can spend $30 to get $100 in real estate, but to get $100 in stock you need to spend $100.

#3 Cash Flow

Stocks don’t give you a monthly check!

No matter how you look at it, the bottom line is that commercial real estate gives you more control, leverage, and cash flow than stocks give you.

That’s why I don’t invest in stocks, I invest in real estate. But you have to make the choice for yourself. It’s the red pill or the blue pill.

Do you want something with more control, more leverage, and more cash flow, or do you want something that has a higher potential to moon but also a higher potential to crash? I hope you got your answer to commercial real estate vs stock market. So invest in it and make money in real estate.

Learn more about what we do here at Cardone Capital and register HERE to find out how you can potentially invest with me in cash flow positive real estate!

Be Great,

GC  

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There are 7 things Cardone Capital looks for in rent roll in real estate:

• Gross Potential Income — what’s the maximum amount you can achieve?

• Effective Rents — what’s the gross potential minus vacancies?

• Market Rents — what are your neighbors renting things for?

• Occupancy — how many people are actually living there?

• Lease Term — how long tenants are there for?

• Other Income/Utilities/Concessions/Etc. — what are the tenants paying for?

• Unit Type (# of 1bd/2bd/3bd/etc.) — how big are the units?

These are just some of the things you must be asking when looking into a new property! Rent roll analysis is an important stream under the study of real estate.

When did the tenant agree to the lease?

When does it terminate?

What are they paying?

Who lives there?

What do they do?

Did they make a deposit?

How are they paying each month?

Remember, buying a property requires a lot of due diligence. Don’t rush into something.

At Cardone Capital, we take our time before investing in a property, and we only pull the trigger when we know everything about the property and know it’s a good deal.

Be Great,

GC

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But what’s worse than debt?  Dead money! Here we’ll discuss top 3 kinds of debt people fall in.

Dave Ramsey won’t teach you this, but America is drowning in not only debt, but dead money. From the $9.1 trillion in mortgage debt, over $5 trillion of that is stuck in equity. That’s dead money, and that’s the biggest problem.

Here are 3 things about types of debt to remember:

#1 All debt is not created equal. 

There is a difference between credit card debt and borrowing money to get an apartment building that cash flows. There is good debt and bad debt!

#2 You can’t grow without debt.

Sorry, but if you want to grow a business, borrow money. Apple and Google do it. Just about every growing, successful business borrows money to grow faster.

#3 Income is senior to debt.

The question isn’t about how much debt you have, but rather, how much income do you have? When you have more income than debt, you don’t have a debt problem.

If you’re looking to get some GOOD debt in your life, register with Cardone Capital. I use big debt to make big income—and you can join me.

Be Great,

GC

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How many units are you looking to buy? The more, the better.

Real estate is a business sitting on a property—and the more units you have, the bigger your business will be.

Top 7 Signs You Have a Great Deal – Grant Cardone Capital

In addition to the number of units you’ve got, what else signals a good deal?

#1 Positive Income

#2 Banks need to be interested in your deal

#3 Your manager needs to be happy about the property and well paid

#4 Unsolicited buyer interest

#5 Stable and growing job growth in your market

#6 Salaries 3X or greater than the rent

#7 Location

The post 7 Signs You Have a Great Deal appeared first on Cardone Capital.

In fact, Monopoly became the best-selling privately patented board game in history.

You want to win, right?

The more expensive a property is, the more valuable it is.

Do you want to own the Boardwalk or Baltic Ave.?

The post The Truth About Monopoly appeared first on Cardone Capital.

What does that even mean?

P=Passive Income

E=Earned Income

You want your P greater than your E, right?

But most people want their passive income so they can forget about their earned income—I’d suggest you need both!

And that means you need to start finding a great deal even as you continue to work.

The problem is, deals that are easy to buy are hard to sell.

So, when you go looking for a real estate deal, you need to look for the right kind of deal.

But what happens when you find that diamond in the rough? What happens when you find that GREAT deal you know is going to make you a ton of money?

You need to write an offer.

The mistake most rookies make is they start negotiating over price before they even get to the write up.

Don’t negotiate price before the write up.

Here are 3 quick tips to keep in mind:

#1 Ask: Simply ask the seller if they are willing to sell. Of course if a property is on the market you know they’re willing to sell—but I’m talking right now about hard to get deals, the kind of deals that aren’t on loopnet.com or on sale at your local broker’s list. If you see a property you want, ASK the owner if they’re willing to sell even if it’s not on the market!

#2 Price and Terms: Find out what are the acceptable price and terms. Why, because you can’t get anywhere without a starting point! Plus, you need to know what kind of numbers you’re going to be dealing with.

#3 Confidence: You must express to them that you’re the buyer. You need to have confidence in YOU. The more confidence you have in yourself as the buyer, the more confidence the seller will have that he or she will close the deal with you!

Be great,

GC

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By dividing 72 by the annual rate of return, you can know how many years it will take for your investment to double.

The rule of 72 with compound interest was great back when interest rates were higher.

But today you need a new vehicle that allows you to:

1. Protect your capital 2. Give you at least a 6-10% return 3. Gives you the possibility of appreciation in the future 4. Gives you tax advantages

The bank is for people who don’t trust in themselves. You need to be doubling your money quicker than what the banks will give you. The house is about protecting money, but it doesn’t give a return or a tax advantage.

Average rate in US banks is below .05% which means it would take you at least 144 years to double your money. Do the math. You can’t compound at the bank!

I’m seeing doubles in 3 years, 4 years, and 5 years investing in multi-family apartment buildings.

This is the new compound interest.

Don’t wait until you are 90 years old for your money to double!

The average return in my real estate holdings is north of 12% before appreciation. Without any appreciation money doubles in 8.3 years while protecting your capital.

Ignore your money and it will ignore you!

“The new compounder of the 21^st Century is multifamily real estate” …but not just any apartment building.

Rents are going to go higher for class B for any other types of apartments.

There are 4 main types of properties:

Class A: $1,500 to $3,000 rents

Class B: $1,100 to $1,500 rents

Class C: $800 to $1,100 rents

Class D: $500 to $800 rents

You need to be in A or B in select markets.  Don’t get started in C and D, that’s a management nightmare. Detroit will never be an A market. California will be C and D markets in future.

You can buy junk—or you can buy great property.

At Cardone Capital, we don’t do junk. We invest in quality properties that cash flow and wait for appreciation—and this is the compounder of the 21^st century.

Be great,

GC

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But a single-family home is usually not a good investment—it’s a liability.

Here’s the true cost of buying a home:

Down payment + size of mortgage + all the interest payments + all the taxes + all maintenance + opportunity cost of time

The opportunity cost is the biggest cost of owning a single-family home.

It doesn’t cash flow if you live in it, but if you do rent it out for cash flow and that person leaves, you’re back to being 100% vacant!

You want to have multiple doors to rent, that way even if 5 or 6 people leave you’re still 85% full.

You don’t want just one McDonald’s—you want 50 of them.

Why does network marketing work? Because you’re not dependent upon one person, you got hundreds and thousands of people.

With single family homes, even if you rent them out, you just can’t scale. You can’t have the economies of scale unless you buy the whole neighborhood, but then you have the whole neighborhood calling you.

And what happens to single-family homes if interest rates go up?

The 10-year treasury rate is currently 2.69%

I’m borrowing money right now at 4.29%

That’s a 1.60 spread.

Let’s say interest rates go to 6%.

There will be 4 areas off the top of my head affected by this:

#4 Credit Cards 

Will have a minor effect.18% will still be 18%.

#3 Federal Government  

How much money do they owe? If their rate goes from 2.69% to 6%, this country is over. And if we’re over, China is over.

#2 Auto Industry   

Autos will get crushed if interest rates go up. Interest rates are not paid by consumers, interest is paid by the manufacturers to subsidize the rate. Have you ever seen commercials like “0% interest for 72 months!”?  That’s auto subsidizing.  They might borrow money at 2.69%, but it’s not free!

#1 Homes   

Single-family homes will be first to be hit when interest rates spike. Homes won’t sell anymore. Homes will literally stop.

So, the bottom line is I’d rather be 90% occupied in multifamily than 100% occupied in single family.

Many doors are better than one door.

And that’s why we do multi-family here at Cardone Capital.

Learn more about how you can get involved in our funds HERE.

Be Great,

GC

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