10 Biggest Mistakes You Make When Buying Real Estate - Grant Cardone

I think I need a little magnet guys in the future like Cardone capital whatever something needs to go up on this thing so it's a hey welcome grant cardone here every Monday 12 p.m. Eastern Standard Time Ryan SEC Oh captain Ryan real estate Ryan bring you real estate investing made simple I want to make this game simple for you so you learn how to buy where to buy when to buy it how to make sense of it how to analyze a deal I've been doing this for 25 years our audio is good right guys I've been doing this for 25 30 years now I guess I started looking at real estate when I was 29 years old Houston Texas I didn't buy anything until I was 31 32 looked at property every you read a book like you read a book I was looking at deals I'd walk a deal check a deal out meet with a broker look at the performer look at the expenses look at the income anybody can read a book man and most people don't by the way you should read a book read as much as you can but there's nothing that's going to replace walking deals today I'm gonna be sharing with you the biggest mistakes made in investing in real estate I'm trying I'm gonna try to get to all ten if you miss a show and you doesn't want to listen to on your way to work I think we have how many podcasts do we have now just on the real estate show I don't think so I think you think I think there's how many how many different shows have we done right plus I think it's 40 Robert I think you exaggerate Roberts been in sales now for a year so he's starting to exaggerate if you go to iTunes stitcher or what's the other one SoundCloud iTunes stitcher or SoundCloud you will find thank you for making this so big thank you you will find 40 different segments on real estate investing made simple so make sure you grab that if you're on Facebook today and watching this show make sure you comment and make sure you share we always give away free gifts for those to share my number is 305 eight six five eight six six eight three oh five eight six five eight six six eight stay with me let's give a drumroll he's comin live [Music] hey welcome to real estate investing made simple my name's Grant Cardone every Monday 12 p.m. I come to you talk about your real estate needs learning the game of real estate buying it finding it pulling the trigger on it I've loved real estate my whole life if you're anything like me it just makes sense it's real number two if it produces income then I can hang on by the way it should produce income the only thing we buy Cardone capital card on capital com is income producing real estate it could be 2% 3% a year 4% 6% 8% give me any percent greater than um what I'm making it the bank and and I'm interested if the location is great if the scale is big enough if I can get the right amount of leverage and if time is going to allow me a sure thing I said it the nine letters in two words that every investor dreams of is sure thing that's right I said sure thing I didn't say get-rich-quick I said sure thing the reason I bought real estate income producing real estate in great locations where there's job growth in good markets is because I know if it produces cashflow and I have time I will get at some point in time in the future I will get what's called appreciation capital gains today I'm going to share with you the 10 biggest mistakes I'll also take your calls 305 eight six five eight six six eight captain Ryan real estate Ryan is here to go through your questions whether you're posting on YouTube or Facebook wherever you post we will be there I know Ryan's looking right now in his computer if you have a question or a comment ask if you want to call in and show me your deal 305 eight six five eight six six eight Natalie's on the phones right now let me share some mistakes with you you're making in the real estate space number one you're not buying deals okay you're not buying deals number one biggest mistake you're gonna make in your entire life is not doing the nasty you need to buy the deal folks the reason you're not buying the deal I can tell you why you don't know what you're doing you don't know what you're doing you don't know where to look you don't know where to start number two and I'll go over each and one of these in the show and maybe you can keep your questions confined to the problem you're having what I want you to do during the show is I want you to check off which ones are you doing that's wrong number two if you're doing deals I guarantee you you're gonna make this mistake in the beginning you're gonna buy too small because number three mistake is you're gonna buy on a budget this is one of the biggest mistakes you can make okay these aren't groceries this is not a car you're buying you do not want to buy real estate on a budget what I mean by a budget is you got two hundred grand that's what I'm gonna buy no no you'd want to look on both sides of that number anyway you don't know if you're missing a good deal maybe the good deal is way below your budget and maybe maybe just maybe the really good deal is above your budget and you're gonna have to go raise some money so don't be confined to your budget we'll talk more about that in a second number four big mistake you're gonna buy the Performa the performance what the real estate agents going to tell you the property is going to produce an income now captain Ryan real estate Ryan my main man mr. slim Dean doe okay yep do we ever do we ever look at the Performa nope I mean we look at it right but one good one I'm gonna use a worst case performer okay and once I get through that maybe I'm gonna take a little hint into the future at it but I'm not going to put much significance on the performer I'm gonna give you the first five in the first half of the show number five you under estimate expenses okay taxes are often underestimated we were just doing a meeting in Houston I said hey what's the biggest mistake guys are making here they're under estimating the new taxes property taxes can't make them go white folks you can't make property taxes go away okay you can make a lot of things go away but you can't make that one go away so don't underestimate taxes insurance how much in the insurance I know people buying deals and they don't get a quote on their insurance before they close the deal so you'd want to get a quote on those things those are the first five which ones are you making I'm gonna tell you the reason you're not buying is because somebody talked you out of it mom dad Oh real estate so much work be careful you better you better go slow that gets you into number two a lot of money in real estate well johnny was an idiot who wasn't the real estate uncle Johnny bought the wrong thing I bought the wrong thing - Dennett's huh bad tenants okay they're gonna call you the little lights are gonna go out at midnight oh my gosh the termites will eat it you're gonna lose it yeah man all that can happen okay so what do y'all do would what y'all do is going to put your money in the bank you earned nothing yeah Oh point one two percent or you send your money off to some pension fund and you're like I'm gonna give this money to Wall Street for 30 years so you can avoid a little bit of taxes if you're looking to avoid a little bit of taxes won't you do this once you buy a piece of real estate and keep that until the year 2030 I'm sorry 2047 about 16 units okay these are front doors my 16 units and keep those for 30 years if you like the key of the IRA the set program the retirement program if you like sending your money up to some pension fund for 30 years if you believe real estate in 30 years is gonna make you money then go buy an apartment building it's got 16 units or more 16 doors or more don't buy small I try to buy more than that if you could don't buy small two units four units eight units leave it alone somebody told me that day I got 200 grand I live in Seattle what should I do with it dude you should invest with me why wouldn't I go buy my own deal because it's gonna get you a deal that's too small so when I tell you look invest your money in real estate once you've got a hundred grand start looking it start looking before that but once you've got 100 grand don't buy anything with less than a hundred grand and I'd prefer you to have more than that okay why is that because 200 grand is going to buy you about in Seattle it's going to buy you about four units maybe and four units cannot produce enough because you're buying on a budget you're making these two mistakes right here Brian you made a both right was that didn't buy in the beginning oh yeah bought too small I mean you bought on a budget yeah okay so what are what do grant what do I do look you need to know how to reaper form us you need to look know how to read the expenses so you can go out with your money raise money if you need to so you can look at big deals or you need to find somebody that's buying big deals okay I don't look anymore based on how much money I have I look for great deals and Bob my name is Grant Cardone you're watching real estate investing made simple we do this every Monday 12 o'clock give me one second I'll be right back what's up everybody my name is grant wise the founder of modern investing mastery only reason we run ad is to start a conversation you have something in the guys's attention you got a question you're posing and you got a solution you provide it to learn more about generating motivated seller leads visit w-w-w mr investing master EECOM my team and i have set aside some time to help you master this so you can go off and master based on funding is the leader a creative real estate capital with millions of dollars available to investors immediately we provide fast flexible funding and offer a simple and easy approval process we have terms that are tailored to your needs and most of our creative learning programs are based on the property value and not your credit there are no financials required an all credit accepted loan program we are able to close commercial loans that are outside of conventional lending guidelines go to icon funding dot mark in your neighborhood with a lasting impression a professional landscape can deliver that and more and the man to bring it to you is Steve grades awarded the national best of house and client satisfaction in 2016 but clients such as dr. oz and the Palisades Centre Mall in West Nyack this isn't landscape this is lifestyle without for more information visit Steve Briggs design.com and that Steve Briggs design John you people are being kept from their dreams by circumstances they couldn't control all they needed was the second chance or a fresh start that's why cash now was created since 1997 ray Abood owner of cash now has been the premier expert in home renovation in the York tri-state area offering a five step home buying process ray and his team will ensure your needs are covered and get you closer to your dreams of buying a home in any city across the United States visit cash now PA com that's cash now PA com2 get started hey welcome back to real estate investing made simple every monday 12:00 p.m. Eastern Standard Time wherever you are I will bring you this show from wherever I am so that you can start investing in the real estate game so that everybody's watching right now understand when I talk about real estate I'm not talking about a house or a condo these are not houses and they're not condos in fact they're never one unit ever if it's got one door one front door and one back door we don't buy them okay so I'm telling you do not make the mistakes other people are making the first mistake I made in real estate was I bought one unit about a single-family resident I rented to somebody else you're like why is that a problem the reason you don't see the problems is probably why you're not going to do it because you know you know I noticed something I don't know here okay this is a mistakes people make they don't buy it all biggest mistake you're gonna make as you buy you don't buy okay but then if you buy something and you overpay for it over-leveraged under leverage it buying the wrong location you don't buy enough doors you buy on a budget you buy too small all those are going to be mistakes if you underestimate the expenses by three or four hundred bucks that's gonna be a mistake okay but number one understand this the biggest mistake you're gonna make is you don't buy that's the biggest single mistake I made in real estate was not buying more stuff I bought about over six thousand years now maybe seven thousand years now I own four thousand of them one mistake I made was ever selling anything I shouldn't have sold anything I ever had but I had to to get to where I wanted to be so I'm willing to make one little mistake so that I can get a big win later right so some things you have to do number one by number two you buy too small one units too small two units that's too small three units too small four units to smile oh my god what do we do then dude you've got to get some more money that's why I have card on University so it can teach you how to get more money so it can teach you how to go raise the money so it can teach you how to go get investors the reason we created card on capital I created card on capital for those of you who don't have time to go find deals or raise money for investors but you want to be in the real estate game okay number three buying on a budget your BOTS look bring me that place okay I'm going to Starbucks right now I got a I got a budget at Starbucks I cannot spend more than three dollars and 35 cents at the Starbucks dude that's for coffee you don't have a budget when you buy these deals you don't have a budget when you buy you need to have a budget when you own you see the difference if you've got 500 grand do not look at properties that only or 500 grand right you have to look above that number so you can find the great deals the great deals might just might be just outside of that neighborhood might be another couple blocks or you had to stretch a little bit but that's what the deal is okay number four looking at a performer performing is a financial statement based on the future that hadn't happened now if you believe in Mary Poppins and the Easter Bunny and Santa Claus and and and if you think God's gonna save you oh god please please get me a rent increase Oh God please God God does not get involved in real estate okay you need to know that the agent that put that pro forma together which means a future performance and the property made it all up the rents are going to go 3% the expenses are gonna say the same dude they're making that stuff up okay the insurance will never go up okay underestimate you underestimate the cost of running the property right the expenses number six not funding capital costs in the future you're like dude there's so much to learn here first thing you got to know is what mistakes that you can avoid okay if I'm gonna teach you anything I'm gonna teach you here's the potholes man for I Drive before I Drive I go hey you see that pothole right there you see that bump over there that's all you need to know about this road okay those two things in this road now let's learn how to drive avoid the potholes not funding your capital expenditures carpets paint roof we just bought a deal up the street right I knew going into the deal I would have to buy a roof we replace the roof in the first 30 days as soon as we moved on the property 30 days later we had a new roof on it everybody's like oh my god there's trains going on okay we're buying a deal in Houston Texas right now it's gonna need a roof but that property can't because of the expense is because of the price I'm paying because of the timing I cannot do the roof right away but I need to start funding the capital expenditure this is not an expense it is a capital expenditure I need to start slowly funding that every month so I have that money in the future number seven over leverage that's why everybody busts out in 2008 Oh rule states terrible everybody lost stuff dude you over leveraged dreams you borrowed too much money okay now that's not happening today what's happening today is people are under leveraging in many cases some of you out there that I have a home paid for you got a $600,000 home paid for you went to Dave Ramsey's k.a course you listen to what Dave said and you're like oh I'm not gonna ever borrow money on anything okay by the way Dave's company that delivered the Dave Ramsey program what channel is he on it's on one of those big channels serious I don't know whatever right guarantee they borrowed money so that they could scale out and up and deliver the communication to you so Dave didn't do you guys are not using leverage correctly you need to leave I got 350 400 million dollars for the debt okay nobody's calling me an idiot because I owe 400 million dollars to Fannie Mae and Freddie Mac okay cap rates you guys are buying on cap rates I had I had my buddy what's his name what's the boy's name Cole had her co-editors only work for eight caps do you have any great deals you're gonna miss Cole because you got some freaking dumb number up in your head and and number 10 you don't know what you're doing yet you don't know where to buy where to look when we went to Houston what's the first thing I said the most important thing about Houston run location dude I'm telling you I'm telling you we wouldn't have to do so much homework here I said the way to eliminate that is this is our band right here this is our triangle or am I gonna miss a good deal yes I will cuz I don't know what that is anyway I don't I shouldn't I don't want to go out there because I don't know it and until I know it I need to focus on what I do know so I can pull the trigger on something because I'm gonna have to sign a check more importantly I'm at the sound of debt eighty million dollars for the debt forty million dollars for the debt seven million dollars worth of debt I'm gonna have to sign a piece of paper says imma pay these people back I want to know what neighborhood I'm in I want to be able to predict the future about that neighborhood so when you don't know where you're investing how you're gonna run it who's gonna run it when you might sell it then you're in trouble okay let's talk to the first caller I want to help you get through these ten things okay all this can be known everything including number ten first caller Michael and Coral Springs probably Michael why so many people are investing with me a card on capital because they're like dude I cannot this is what I'm doing I'm not buying I'm buying too small I'm buying on a budget I don't know how to read the financial statement and that's just the first four what's your question pal thanks for calling in hey grant we follow you for a while I love what you do love the hustle all the energy I'm gonna do quick back around myself I'm 19 years old looking into getting real estate been doing research just trying to act like it's fun to absorb as much information as possible I just want a question for you if you knew what you knew now and start fresh in nineteen years old what would you do well if I was interested in the real estate play right which by the way I was at 19 years old I just didn't have anybody encouraged me to go do it I would have been walking property when I was 19 in Lake Charles Louisiana look where I lived I'd have been walking that figuring out how to buy properties that cash flowed and I would be five to five times further ahead than where I'm where I'm at right now hanging with us one second we'll be right back from break how to invest in real estate like Grant Cardone but you don't have the cash to invest yet reach out to Chris root and his team where he will show you how to invest in real estate to build cash without credit or much money by learning how to wholesale real estate we'll show you the right way to build cash so you can invest in multifamily apartments and other real estate investments like ranked are down sign up now at Chris recom that's fresh brewed calm the guesswork out of your life have you ever felt like you had no idea what to do or what direction to go we at partum have a solution that identifies who you are what you're supposed to do and how you can achieve it through easy and simple steps there's no more guessing no more feeling lost you can now get back on track and get the wealth in your life you deserve whether you're a business owner entrepreneur millennial we can help visit part time me that's part MDOT me to get started right to Tyler to find ads how much would five times more visitor from search engines like Google or Bing do for your business link research tools helps you increase that free organic traffic we have offerings to get your business to become the dominant force on the Internet the secret of Internet traffic is what we give you and convert that traffic into cash flow for your business learn more at linked research tools com that's what we live for financial freedom is Korea from opportunity at symmetry financial we are committed to getting hard workers talented individuals who love the sell who love to help others create a strong six-figure income if you ever want one's in light symmetry financial holds the key to get you there we want you the top talent the best in the business to join our team hey welcome back to Cardone real estate investing made simple every Monday 12 p.m. Eastern Standard Time I come to you to talk about real estate investing how to do it what not to do where to find your deal where to get a deal you can call me three oh five eight six five eight six six eight do we still have the caller 19 year old 19 year old Michael from Coral Gables says hey what would you do different if you were starting your career all over again in real estate look I'd be looking at 19 I wouldn't wait till I was 32 I'd be looking at 19 I wouldn't wait until I had money I'd be looking right now 19 dude regardless you Bekir your dad and your mom are like focus young man focus on your studies dude rather than going to college out of photo I gotta focus on real estate every weekend okay I met a guy that started buying real estate when he was 19 years old in San Diego California guy was buying all Chula Vista properties hood stuff okay like like what were they call the barratto's not to get her to get Spanish Gatos huh not to projects there's a term for it man you guys are to go huh not Pueblo man that's an Arizona Spanish forget it okay barrio barrio the body of the gaza the guy the guy I met the guy when he was twenty six seven years he'd been buying he owned a thousand units in the barrios okay he was making like so much money hundreds of thousands of dollars a month to 26 years old positive cash flow he learned he didn't make this mistake he went on buff stuff why he had a long horizon like this one I tell you guys over and over man if you got a horizon this long enough a timeline long enough and you got cash flow any cash flow by the way right two percent i'ma buy deal right now in the first month it might pay me 2% but it paid me something when I'm when I do my worst case scenario I don't get a rent raise my expenses keep going up and I still have a little bit of margin marcha might be two might be three might be five might be eight might be twelve whatever that margin is as long as I got a little margin then I got to make a decision on what how much leverage you use under leverage over leverage how much can i fund the roof in the future the paint in the future okay what am i real expense is going to be how long can I hold what if something terrible happens how do I exit this deal okay so remember that don't don't do what you're broke daddy said okay or your cheap uncle ah it's all how low you buy buy low and sell high that's so stupid like that is so stupid it's unbelievable right if you want to buy the Dallas Cowboys today you're gonna buy high and you're gonna sell higher you're not gonna get the good stuff cheap you understand so if you want to buy a professional football team you're not going to buy it for cheap and by the way you'll need more than money to buy a team you better get approval from the NFL so you want to buy the best stuff okay hold on for the longest that means what you cannot operate with a budget and you cannot buy small nobody wants to buy the small stuff the real money is in the big stuff that's what we do a card on capital about big deals three hundred four hundred five hundred units at a time these are monster deals forty million 60 million one hundred million dollar deals if you want to see the value of what I'm doing okay we said about this board with two white sides you know what now I'm thinking about I had to get all fancy okay look what I did huh glass some glass some glass look what I did okay I went bought the black side another on the black side man just looks like I'm following out into the abyss okay see this is what happens to most of you when you go to buy real estate you get lost on loot net you go talk to your friends your uncle's in your aunts hey what do you think you get advice from everybody okay you get advice from people buying single-family homes and flipping them this ain't flip and we ain't flipping here the next thing you know you're looking bit coin and crypto s-- hey the creative what do you think about the bitcoins I don't think about Bitcoin don't I buy real estate why it's real I spend half my time buying something real and I spend the other half of my time selling things so that I can get real money so I can invest in real estate alright let next caller Terrell and if you have any input on this or questions Ryan I really appreciate your input how you doing you know what's going on player listen man uncle V I want to give you a thought up man your real estate grown you owned it man man thank you man I appreciate you you know giving me that shoutout hey hey by the way did you hear then it was found out this weekend should I say it yeah that I am no I should I shouldn't say that then do it it's all over the internet man you didn't hear what they calling me what they call you man okay go ahead what's your question man my whole staff saying don't say it don't say it host in cognitive you guys know what they're saying about me on the Internet post it in comments listen I got a deal yeah all right it's 30 unit I'm 22 years old I like to buy this tool right now I'm gonna bite all right but I still need you because you're the expert you were doing this for 30 years I want you to look at it man good all right good let's go look at it mm-hmm let's go look at okay we got it tell me about it okay all right man sold 30 units I spoke to the landlord I like I know that the bullet hit me man I went down there I suppose oh he's gonna lie to me if you lied to me he told me he lives on it Peter the morning yeah to the penny lives in there I went inside myself look they wouldn't need to be done and everything man I love I love the deal soon as I walked onto the property I was like good good well and you guys if you've been watching the show you know one of the things I look for is dude do I feel good when I'm here first thing when I Drive up does it feel good yeah okay all right so give me the numbers now man will you and love you all our love now do you why 292 is the NOI oh not Danna watch 139 okay 139 is the Noi yeah 139 154 I rounded it off the 140 but good good what is that what is this number what's what's the 292 that you told me know the girl okay that's the rental income okay now how much they want for this dog okay now we know it we know they could have just added another 10,000 and then it hit one six but so we know they're like oh don't break the one six for whatever reason why because they know people buy on budgets don't go more than 1.6 million dollars so they put that in the search by the way that's a dumb search you should not search by price no you should search by units this criteria right here as soon as he said 30 in so I said okay did I can listen to you all right you know 30 you I got you man I got you bleep listening man keep listening okay check it out let's see if this thing makes sense this one these numbers is this a pro-forma number or is it a historical number sure link whoa bro trailing 12 bro bro did you adjust for the tax increase bruh nah did not know one of the mistakes made when investing in real estate is under estimating bro yeah taxes in the inserts mm-hmm the math the matter for you so look look look do you have this do you have do you have the do you have the numbers do you have what the taxes are right now look up the Texas for me you can call me master I'm a master I am the master dog I'm the master maybe that's what it is I need somebody's calculator start spending it to me what do you want 139 divided by 0.06 five it's two to one three eight okay good good okay divided by one point five nine so he's telling me this cap rate right here it looks like a seven north of a seven taking me to heaven people meet point doesn't yeah yeah yeah probably true this is called a cap rate right what is the cap rate cap rate is the return if he pays cash which by the way he's not we're not gonna over-leveraged I'm mistake number seven under leverage number eight okay is that right eight point seven would you divide it by the same thing I asked you for a few minutes ago make it again man 139 you divide about one five nine oh okay I get angry I know that's okay I like it eight seven yeah Jesus okay okay so look look now he didn't include the taxes okay the taxes on this deal what city is this my man Springfield man I mean holy holy holy of holies I need to be on the ball in that Oh yoke oh okay so so so two percent three the taxes in this deal should be like thirty two thousand dollars is that right property desert no no no no don't lie man see he didn't say that it's about right that's a lot he didn't check you don't know just saying I don't know say I don't know see I you guys got a tune in you got to know when somebody's telling you the truth and when they're not like the frequency the way people talk you can hear it like you have to listen to real estate broker you've got to listen to the seller you have to hear the difference like a dog can hear that whistle you know dogs can hear sounds that other humans can hear y'all know what I'm talking about how about a little feedback right here [Applause] so when he told me yeah man detects it I'm like he don't know you need to know the difference y'all need to hear that frequency this is what the sales game is so important so you can start hearing what people are telling you all right so look you don't want to buy this thing on a 8.7 and find out it's a 4 so so so look I'm gonna do this I'm gonna take do you have the taxes on the deal do you have do you have a breakdown of all expenses I couldn't get it fall off of them I've been trying to get ahold of them he's not he's not working enough yeah he's not working with you cuz you because you don't think you're real man so do you have the t12 or not training yeah yeah he's got the trail étoile it got some of it not all of it now again now we're back to this this is a great call right this is exactly what's gonna happen $2.99 with no exaggeration kick it on this ride anytime you want 99% of you will quit investing in real estate within 3 days because you bought the books you bought the program and you're like dude I can't get anybody to talk to me yep now that's not true but yeah we ain't even looked at - yes he looked at you yeah yeah oh that's good awesome bro so the other thing is how many deals did you look at a boat Bob oh good good for you man see this guy's making the right moves so he is now running into the problem yeah of knowing how to talk to somebody now when you talk to him did you tell him you had the money yeah and he did you show him how much money you had yeah I put a nice-looking I want to get this top me right now I said can you cut a deal with yeah yeah okay so watch how the deal works okay do you have four thousand dollars to put down okay good I'll get you the 50 grand all right maybe me a new partner in the deal 1.2 million dollars is gonna cost him 72 thousand dollars per year to finance 72 thousand dollars off the 139 what yes okay is seven six sixty seven thousand dollars a year he put 1.2 million dollars down I like this deal I'm sure he put 400 thousand dollars down to 15% of return per year now watch this remember the 67 thousand is not a real number because he missed he miss estimated his insurance I'm just going to assume this and hit taxes let's say insurance and taxes he missed by 10,000 okay fifty-seven thousand dollars a year fifty-seven thousand into four hundred that's still a twelve percent return with no rent increases let's say he missed something else carpets he's got to go paint it he might want to put a little freaking new stone 30 units let's say he wants to spend three grand a year a three grand per unit so we take this and say you know what we're gonna spend five hundred grand on the down payment not four hundred four hundred is gonna be for the loan hundred grand to fix up the units four thousand dollars a unit fifty seven thousand into five hundred grand no rent increase would y'all us it would y'all agree that if I paint it carpet it would it uh uh do that to it and do this to it and do that - yeah did the Rena could've come up ha ha okay 57 grand five hundred grand down I'm good man how much you got how much money you got down down right now yeah how much of the cash do you have I think I can get me 50 right now good good so he does 350 and we go bard the other buck fifty from somebody else yeah man I'll get the little yeah you don't even worry about that right can you pay the investor 10% so the problem is he can't get the deal though see so what he's got to do right now his man you got to start working on the loan dude you got to work on the loan okay you got to find out why this guy is not calling you back so what I would do is I'd go write the guy I'd write him an offer see cuz once you know like he knows first collar I've had in like three weeks that knew what he was doing I didn't have to hang up on him so I write him an offer dude here's a check for $350,000 okay I'll go non-refundable with 50 grand of it non-refundable as soon as I get the title what else run title environmental environmental and what else would I want give me another out mmm and I need I need 7 days 7 days due diligence on the paperwork on your on your expenses I'll give you 50 grand non-refundable in 7 days I got to get the title the environmental survey the survey and I need 7 days on your books here's a check for 50k right here let's roll dawg he'll take you call now yeah and then tell him you know me ok ok ok and don't ask him don't ask him to cut a deal until you have it under comment I don't need a deal dude I don't need a deal it's a deal at 1:16 I know it's a deal don't worry about that don't worry about that you got to find out what you don't know about the deal remember the 10 mistakes you guys should know these by heart you guys you guys are like you like know what the mistakes are all I gotta do in most games is no don't hit that pothole and don't hit this one with money don't lose money if you don't lose money what does that mean you're gonna win okay if you invest it remember the first mistake was what not buying so that's one of the potholes once you get your money in and you know hey I can't lose here by the way when we buy how many times you ask us what dude is there any chance that so there's money here yeah okay long-term do I lose money or make money if the answers do you make money on this deal good can I keep it long-term that's the second question can I keep it number one am I gonna lose money or no good can I keep it when hits the paint fan right when things go bad can I keep it no no we got too much leverage or no we underestimated this or this has to happen and I'm not gonna be able to keep it if I can keep it for some period of time I'm gonna make money on the deal I'm telling you folks that's why I don't do Bitcoin that's why I don't do Kryptos that's why I don't do stocks cuz I don't know that's why I don't like like like like know what you're doing man that's why when you go to work Who am I calling today what am I gonna say to them today how do I overcome the objection how do I get in front of them how do I close the proximity between me and them how do I get somebody on the phone it doesn't matter what it is how do I know how to swim and you live on a planet two-thirds of it is water how do I swim man right so I'm not scared of boats right when you when you go come over to my condo it's at the 33rd floor you're like oh so scared of heights then then maybe handle that no I'm just not gonna go to your condo that's stupid dude you'd want to come hang out with me okay and you need to want to get to the edge you're not gonna fall find out what's scaring the out of you right you're not buying real estate for the same reason I don't want people calling me at midnight uh yeah you knew that's stupid dude I wish people would call me at midnight please call me let's talk cuz I might make some money I know this I ain't gonna make any money if nobody's calling me am i right captain Ron's right okay real estate Ron what do you have people asking let's take the next caller hey brother man let's get that deal done dawg let's get that deal done let's pot let's buy that deal I got George in Colombia I don't know why Carla keeps checking up on me okay what's his name George George sweet your John what's up man hey hey man put those Lay's potato chips up you sound like legs turn your turn your turn your thing off man talk to me okay folks what's gonna day you know there's ten mistakes okay do you know what they are does anybody know what they are what are the biggest mistakes somebody's talking you out of this deal okay number one number two you're not buying number two you need to buy a cash flow okay it doesn't say to buy small it doesn't say to buy one unit it doesn't say it says buy a cash flow okay now remember if you buy a cash flow and it makes you $80 a month use a little common sense here you do not need an obligation for 80 bucks a month dude I can walk outside and pick up 80 bucks that's what I'm telling you if you've got 200 grand okay if you've got $10,000 paying you 900 260 dollars a year a thousand bucks a year that's like dude that's good ten percent yes so what oh my god I can't get 10% anywhere it's still only 80 bucks a month leave it alone it's not worth the energy you can go you need 80 bucks go out there with no investment and get 80 bucks go call a friend for 80 bucks dude I need 80 bucks you can get 80 bucks from anybody I call somebody right now and get 80 bucks so so when you when you're talking about cash flow you need enough cash flow for this to matter right when do I start investing when you got enough money for it to matter right so man get a hundred ran put a hundred grand away at least a hundred what was your first deal how big was your first deal 30 grand for Plex $30,000 150 grand let's say he makes huh it was 150 oh yeah he took 30 grand he put in $150,000 you can't buy that deal today no 2009 though here it's 20% on his money he owns 20% on thirty thousand hundred six thousand dollars here it is not worth I headache that's right he would be better off taking his thirty gain thrown into my deal earning half the money and staying focused on his main and that's what I did huh and that's what I did and that's what he did yeah okay so so you're better off in a bigger deal you understand as long as you know your partner and as long as it's real estate and it actually produces cash flow okay next caller what's up hi good afternoon is this grant oh yes it is hey thanks for taking my call I just had a quick question I'm basically in the concluded due diligence on this deal I'm on right now okay and I'm kind of looking at other deals I'm seeing I'm seeing an opportunity basically if I can figure out the downpayment thing to basically potentially make you know eighty two hundred percent over you know five years on a deal you know kind of double your downpayment kind of thing in five years okay eighty five hundred percent over five years is twenty percent a year so by the way this should be everybody's target right this should be your target I mean I'm gonna tell you what our target is our target is a hundred to three hundred percent over ten years we've done that over and over again I've been doing it for 25 years for 25 years foods these are impossible returns okay what cuz you don't look warm and this is what we look for okay so tell me about your deal 80 to 100 percent over five years twenty percent that's a great return how much money do you have the invest so I mean that's kind of one of the issues I'm 25 years old I'm putting all my money into the deal that I have right now that's pasty diligence so my main question for you was you know your advice for me at 25 do you suggest that I keep you know if all the money cuz I do see an opportunity here all the money raised and money and raise the money or would you suggest that I find someone who's doing huge deals right because I'm feeling like that 30 to 40 unit how much dough you got a ring how much dough you got how much what do you have I have a few hundred right now but I had 400 in the past deal o plus 400 you got in another deal well it's that's the deal that I I just finished your diligence on ok ok good let's just talk about the 200 cuz I don't understand the other thing you're saying yeah you have 400 of your money in a past deal or you already bought the deal or what so we already like we we had it we have it under contract on it and I just finished due diligence on it and that they always want it for a 1.6 and I had 400 in it ok good you're buying that deal yeah yeah we're under contract and we were already on due diligence and that money's not hard so good and you got another 200 grand right now so you got the 100 you got 400 in a deal that's 1.6 yeah and you're like hey what do I do with this 200 do I buy another deal that deal is gonna buy an $800,000 deal or you go raise the other 200 with yours yeah I need to raise money to do the opportunity we're talking about I need to erase you more money yeah yeah okay so do you want to tell me about the new deal no I mean uh my again my main question is just okay is your advice for someone in my stage who's 25 years old and really just getting into it do I would think I would keep doing what you're doing right now I keep looking at deals behind deals finding deals the problem is and this is where it we hit number three buying on a budget because you run out of money you can't do deals I shared with you in the first segment one of the one of the biggest mistakes I made was does anybody remember what it was not buying enough deals and Narellan selling my deals but I had to sell my deals to raise my dough to go buy better deals I had to sometimes you have to make a mistake I gotta I gotta hit this bump to avoid that pothole right sometimes I have to damage the undercarriage a little bit just so I could finish get to home I might have to run over somebody to get to where I'm going hate to say that but it happened more than worth so so you got to make some sometimes you have to make mistakes to get where you're going you understand they're literally like okay I'm willing to have my arm blown off so that my whole family doesn't die right so so I'm willing to get rid of my money and my security so that I get my income this is where you guys go back to number one mistake you never buy anything I'm willing to take a call a phone call at midnight because I want to get rich one day and so I would just tell you man look dude the fact that you have 200 400 grand in a deal at 25 years old and you got 200 grand saved and you're like what do I do yeah okay but even if it's not your money even better for you because you know you controlling an asset that produces cash flow as long as you don't over leverage and as long as you take care of the property and as long as you keep paying attention the fact that you are where you are 25 years old you're 6 years ahead of where I am where where I was so I wish I would have understood that I could go out and raise money when I was 20 years old I wouldn't go into college I wish somebody would have told me this ok hey you don't have to build apartments they're already built you don't have to figure out debt you don't have to go be a bank the banks are already there like how can I play the game not just go to school so congratulations to you I think what I would do man is I would look at how to raise more money and do more of these deals I try to get three of these deals these 1.6 million dollar deals in the same neighborhood and then put them in a bucket and sell all of them and get out because the thing about you being an investor is you need to get out to get your money right you can't sit and hold on so you should just doing my own deals first is working for someone else who already is a master and learning from them uh no like if you had a chance to come work with me you know I would tell you I would tell you to come work with me in a second because without what I'm gonna do is you're gonna go from working on how many units is in this deal right here the 1.6 million dollar deal 30 yeah I'm gonna buy a deal this month we have 30 vacancies in the one property yeah like I have more vacancies than you put under contract so find someone like you I would definitely I would definitely I would tell everybody watching right now man if you love real estate if you know this is a space you're gonna be in don't go to work for a REIT don't go to work for a syndicator find a guy same advice I give people about when you find a job if you're good don't don't go work for a studio if you're a movie go work for a guy that do it go work for Quentin Tarantino don't go work for Harvey Weinstein you know so what okay you know what I'm saying I would go find a guy that's doing deals in your market or move and so you can jump-start your career because what captain Ryan is learning right now imagine it's captain Ryan's been how long you've been doing real estate total yeah since he doesn't on 2009 okay I learned all the wrong stuff when I was a kid my uncle so he's been doing real estate for eight years yep he's been how long you been here years three years oh yeah three years at the end of the year okay look in the last two years he's looked at more apartments then he dreamed up before he got here okay he's talking to people now on we're doing right now we're doing a deal how many units over at Tanglewood 376 so it deposits the deposits are as much as the deals the deposit if you have deals or more than the the deals you're looking at so that's all I would tell you right we put 1.6 million dollars down to hold a deal so like like like three hundred and seventy six units at Tanglewood how much is that deal fifty fifty five fifty five million dollars okay I'm good I'm good with him I hope I'll play answering these questions okay this deals gonna take I need thirty two million dollars of financing money yep that means I need twenty three million dollars down we don't need to spend any money on this deal okay so I'm gonna take it put twenty three million dollars down to make 5% on my money somebody's like why would you do that cuz I know what I'm doing I know what I'm doing dude the rents at this place are twelve hundred fifty bucks a month okay I got Whole Foods two blocks to three blocks from me in one of the in the top six largest cities in the United States I have a marketplace that has rental compression okay rents are depressed they're depressed they're not good right now so they're not good that rents are depressed the rents went down because the supply rents went this way because the supply went that way now when this supply burns off see what y'all say is oh well why would you buy property in a rental market where the rents are getting compressed you got to know why they're being compressed okay well because of supply went up because people built a whole bunch of stuff in there and they built this $3,000 product up here and they built too much of it and it can't rent this is twelve hundred and fifty bucks a month right now okay there's three thousand dollar stuff there's so much of it it put pressure on the rents right here well what you don't know about Houston is Houston goes through these cycles and Houston built too much when in Texas go big everything's big the hair is big trucks are big rocks a huge okay and when they build they build big and they built too much and this supply went up and so what they do is they give away what's called concessions here on this rent hey we'll give you three months free okay okay let's do it pull pull pool table oh my god I'm gonna meet nice sexy people here and they move in here okay and then 12 months from now they they're like I can't afford this 3000 okay because when they go to renew that rent you don't get to three months free anymore and they're like Jed I got to get out of here and they cycle back to where they should have been in the first place and this supply starts getting consumed it's called absorption it gets absorbed into the marketplace okay and and in 12 months 18 months 36 months from now they're not building anything and the next thing we know supply is gone what happens when the supply goes away rents go up see this rent right here I don't have competition anymore and this rent goes to 1,500 bucks and I'm making $250 376 times I just gotta wait man I just got I just gotta be I hate the word patient patient and persistent I have to persist into time what is that a month 94k $94,000 times 12 1.1 $94,000 times 12 I'll get it all by the way divided by five does it cost anything divided by five caps 22.5 22 million excuse me zero do you understand what that means that means that's what I could sell this property for and still return this guy five five percent return that's the additional twenty two million dollars it's an additional 22 million on top of what I paid I increased the value of the property by 22 million now you're like man I got lost that's why you should be investing with me cuz I ain't we're not getting lost over here I've been doing this 25 years this is not a new thing this is like I've done this three times I've done this 7,000 times I've done this on 7,000 different properties I have never lost money I have never not earned at least 200 percent on my money over some period of time how long that is did what however long it takes okay it takes five years six years seven years I just want to double and triple the money and I want to be paid while I wait am I pay 2% 4% 6% 12% the more I get paid by the way the better my investors do okay so my goal my goal is to get the investor this much money and then I got to make it perform so I get a little squeeze here I get a little pinch right I get look mm-hmm look taste dude I like money man you guys like money okay you like money with an invest with somebody that loves money there's never been convicted of a crime there's never been bankrupt there's never ripped anybody off and you can't find one person on the planet that says that dude took my money you can find a lot of people that claim a lot of things about me like hey too cocky okay I don't like the way he parts his hair okay I heard that he is the Mandalay Bay shooter you maybe you don't like that I help churches around the world maybe you don't like that I go help schools maybe you don't want like that I did I write sales books and then I tell people to negotiate hard for their position okay maybe you don't like all that I know maybe you don't like it because I got two beautiful kids I don't know maybe you don't like cuz I got a white car I said why don't white I said it next Raleigh North Carolina come on Riley see now there's a marketplace that there's been built yep lot of apartment product there Denver a lot apartment product okay all these markets by the way have something similar to what I'm telling you about Houston Texas you're gonna have you're gonna have concessions in the rents on new product it's gonna put pressure on other product people are overpaying now in the wrong markets yeah okay now what's this thing my man let me ask you a question Riley have you ever been to Houston Texas I have never been to even Decker do you know where it is though right I do okay let me ask you in the year 2037 mm-hmm okay what city do you live in I live in Raleigh North Carolina good in the year 2037 which one of these two cities if you only could live in one of or invest in one of them which one would you rather be in you'll meet people in Raleigh which one would you rather invest in yeah why why is that location look there's six million people in this city right here okay I'll bet you there's 800,000 people in Raleigh I don't know I'm just guessing yeah is that right 1.1.2 I know one point today okay what's your question bro what's up I'm sorry for 38 it was some withholding a port for 432 mm not even in the real estate game yet um but I'm young I'm trying to get my money right I'm actually practicing the closes from the club is survival guy that's awesome and I don't know I guess I kind of just wanted to ask what resources you would recommend for people that are just kind of like looking in and trying to like find the potholes before they run into them yeah you mean regarding the real estate or regarding how to get get your money right how old are you I'm talking to ya man look I would are you out of college ever you're not going to college or what yeah I'm actually okay what are you good you you say you know you there's no reverse in your car so you know we want to talk about that mistake but what I would do what I would do man is I would do what you should have been doing this whole four years rather than what you didn't do I'd be working I got find somebody to work for don't go get a job get a go work for someone too many people are getting jobs rather than working for someone because when you leave that job you want to be able to tell people dude I work for that guy okay not like some of these freakin bozos that leave here I I work for a grant cardone and I understand that yeah but you didn't because when they call me and say did he do that no dude he didn't do that we had to help him cash his check so what you want to do is when you leave the job the guy you're working for you want to leave and say yeah I worked for Natalie okay call Natalie she's gonna tell you okay I did this this and this for her not for the company I did it for her she's gonna tell you how right and then and then your stock goes up and your own personal confidence goes up right like we got people that leave you in there they make claims that on any true look that they're damaging themselves cuz you know you're lying when you say it right so so that's what I would do man I would find a person to work for somebody did you admire there's only two or three people in Raleigh that that like you're like you know what that person in my space I and I want to work with them maybe maybe they're connected to your church or your community you know somebody like that so should I do that while I feel like right now I'm a cone or with other didn't and we're doing digital marketing and I'm trying to sell you know should I keep that a side hustle and go work for somebody else what do you think do both I mean you couldn't do both you know it sounds like you got a deal already and you're struggling with it right well I'm getting started you know yeah yeah so could you make a lot of money doing what you're doing I think well then do you know you put your head down and do it you know put your head down and do it dude put your hand down and commit to it and figure out how to make it work the next deal is not gonna be an easier I guarantee you folks you come work for me it's not gonna be an easier here he's gonna be hard dog you're gonna have to learn the commitment thing next caller I committed to McDonald's I committed to talking talking about it yeah you should've stayed there Jeff you live I should have probably good at that I'll change your oil this weekend yeah yeah what's going on my friend what's going on thank you for calling thank you for coming yeah appreciate you calling anybody thinking phase right now yeah so what are your thoughts on assisted living homes at Florence just getting into bank money and so I'm ready to go I love more I love the assisted family I love that man assisted living assisted living Yeah right I need somebody to assist me with my collar it's popping really hard okay we should call this the collar show yeah the popping collar show in real estate it's simple yes yeah it's it's a great space to be in man again you're in real estate you're in income properties and you're in the service business so the assisted living will only get bigger in the United States me and Ryan conversation all the time like there gonna be a lot of stuff go away assisted living it will not be one of them so you recommend that as far as for the baking taking part of it just banking money banking money I'm just trying to save money where I could have enough money to buy multi-family so doing wholesaling and I'm trying to get into yeah yeah so flip your homes flip do your flip to get money right but that's a job okay that's a job okay and by the way this is a job too so so everybody understands it's not like this is not side hustle here at my side hustle is worth about six hundred million bucks right now so there's a full time job I'm looking at deals every day it's a pain in the ass it's a lot of damn work it's like relationships people problems situations Tara like you know but it's it's a hell of a lot better than the other job if you if you're gonna be terrorized man get rich while you're doing it so I would just tell you like do your flip do your flip thing get your money get in get out as fast as possible get that money stash aside go do it again stash this I'd do it again stash I decide to do it again until you got enough money to buy a multi-family while you're doing that thing start looking at sister living start looking at apartment buildings I'm looking at when I'm driving down the road I look at everything I look at every retail store I look at every little business who can I service I walk into a restaurant to eat lunch I wonder if I could help them right I look at the real estate next door I'm looking at everything that's how I get a lot done I'm always doing something else my name is Grant Cardone this is real estate investing made simple we do this every Monday whether you're on iTunes or stitcher or the soundcloud wherever you are you want to watch this in video you want to listen to it I don't care I just want to make you rich in real estate you want to do it on your own let's roll you want to raise your own money to buy deals let's roll you want to do it with me Cardone capital com let's roll thanks for watching are you a small business who has employees that need health insurance no problem we at AG capital have a brand new solution for you AG capital is a nationwide healthcare broker who works with every insurance in every health care provider to get you the business owner the best rates and the best protection for your employees AG capital will immediately show you how to add profit to your bottom line and show you the employee how to get a cheaper premium register now at hgtv.com/buying-and-selling with over 14 years experience good time Tommy has spent his time building strategies tips and content that will help you the new homeowner or seasoned in homeowner get the best deal for your money and UK navigate and celebrate because whether you're buying or selling you're gonna get more traffic to your property promotion on every channel and watch this Tom and his team work until you are satisfied your new home awaits you with good time Tommy his team subscribe like and follow a good time Tommy calm that's you're a business owner who needs custom software solutions to automate speed up and enhance your business let Niko's Computer Engineering get you started today with a free consultation CEO and owner Tim Clark has spent the last 10 years building custom software for companies around

Channel: Grant Cardone

Views: 60,564

Keywords: is it a deal?, underleveraged, apartment investing, biggest mistakes real estate, real estate mistakes, business mistakes, CAP rates, proformas, over leveraged, REIT, apartment buying, uncle g, multifamily, cardone capital, grant cardone, NOI, passive cashflow, deal reviews, real estate, lending rates, yt:cc=on, grantcardone, freddie mac, fanny mae, budget real estate, investing, big real estate

Id: KBYQ9V54ss4

Length: 66min 7sec (3967 seconds)

Published: Mon Oct 16 2017