How to Get a Loan - Real Estate Investing Made Simple

I'll tell you in Israel hey welcome Facebook welcome hope you call in today three oh five eight six five eight six six eight three oh five eight six five eight six six eight give me just a minute though got dang y'all jumped on it okay because I'm gonna be talking about loans today okay how to borrow money Robert good man how you doing Robert Ryan seconds and ask how you doin how you got you doing Robert man y'all pulling in on me that looks good yellows real good hope you're doing well everything real estate we make real estate investing simple imma be talking to you about the four ways to buy real estate don't be talkin to you the things required when building buying real estate I'm gonna talk to you - the four types of real estate that we talk about and I'm gonna be talking about involved in all that is you're gonna run up against a few things one of which is how to get a learn you're gonna learn how to get a loan I'm gonna teach you how to get a loan how to get a loan nobody taught me how to get a loan so I had to go do it the hard way hey we give me a loan no man you know we're not gonna do that okay Jarrod's out there making faces at me so Jarrod good to see you buddy what we got going on here didn't hook my facebook folks the terrorists in this arena there's a four thousand dollar ticket okay today 10x growth can calm you can get a ticket for nine ninety five okay look at that yeah that's really see any way to show them where that is it's so closely because it's really close like yeah it really does is it like okay come out Rob rose we shouldn't even use that because it's not it's not it's not a good show that whole section from top to bottom is maybe 20 rows post your questions down below and give me a thumbs up [Music] [Music] [Applause] [Music] [Music] hey grant cardone here it's Mundy welcome because every Monday at 12 p.m. you know what time it is and you know what day it is when I show up to talk to you about real estate we're talking about real estate investing made simple people call in they ask me about their deals I want to help you buy your first deal I'm gonna show you how to buy your first deal I do this show a lot of people ask me Ryan captain Ryan see Ryan Seco Robert says slow the video genius awesome Cisco Kid we got the a-team in the house we got Johnny boys on the cameras and people say man why do you do this show okay with everything you have going on I had a buddy mine asked me this weekend why do you take the time on Monday first day of the week to do a show free of charge talking to people about real estate well at 6 o'clock this morning I was watching a one-hour interview on michael milken's institute is instant his institute about real estate investing okay and what's Natalie doing she she's just gonna have a whole conversation with the guy yeah yeah she's got five colors on life so so I'm watching this thing for one hour this morning it's from some of the smartest financial people in the world talking about real estate why it's been so good and why it's such a good place to put money and the reason I do this show and the reason I spend time researching this is number one I believe this money is important for my family for the future of my family I think this I can't invest in a stock today there's not one company that I could invest in today and I know for sure 30 years from now they're gonna be around I just don't know that okay I could give you I could give you a list of 50 companies by the way we should do this in the Michonne over I can give you the names of 50 companies that have gone out of business okay that were great in their time but one type an Americans out of business Stewart they still have building his name Pan American but nobody even knows II do you know what Pan American is do you know right know Ryan's a pilot huh hairline airline company okay Oh exactly okay yeah singer anybody knows singer that over 130 year old company pay dividends for 97 years or something singer sewing you know what a selling machine is right I do yeah so so these companies went out of business because things change okay because of macro macro big means big big things happened around the world okay and and one of these big things that happened was women started going to work in the 1970s and when they did they didn't need sewing machines anymore so this company that was so dependable such a leader in a space boom overnight by by literally overnight within about 18 months of this happening they could not deliver the dividends that they wants to liver now I'm telling telling you all that because I do this on Mondays because I believe real estate investing is vital to your family you can't just do what your parents did with the banks okay Albert Einstein I covered this on Friday Albert Einstein said that the rule of 72 was one of the great I think he said the eighth wonder of the world look this the rule of 72 only worked when you had interest rates it's seven and eight percent okay you're earning less than a half a percent the bank today the rule of 72 is not and Albert Einstein as smart as he was I don't know how much money yet but I know I'm worth more than Albert was okay Albert might have been smart would count you know calculus but he was a dummy when it came to money because the reality is the rule of 72 does not work on interest rates of a half a percent what should have been that the eighth wonder of the world is high interest rates if you have money is good for people with money and low interest rates if you don't have money this is good for everybody okay you know why because the people that are rich get richer because they get to use their money it drives up the cost of assets because I can pay more for this asset because my rates are low I'm telling you all that to tell you that part of the deal with the real estate okay there's four ways to do the game you remember right there's four ways to play the game number one you buy it yourself okay that's really what this show set up for to show you how to go out buy this stuff yourself four units eight units twelve units 16 units number two thing you could do is you could go a REIT by the way that is not buying real estate that's buying stock okay I strongly discourage you from buying a REIT even though you would get a higher return than you're getting at the bank okay you get a higher return you get a return with a what's called a dividend okay but you get the ups and downs when you go to sell the properties the thing people like about the REIT so it says liquid I don't want liquidity myself okay I think liquidity is bad work only reason I'd want liquidity is because I don't want to go out and purchase things most people that have liquidity they say but I don't have my money dude you don't need money okay you need you need to go out and earn new money the last thing you want if you're on the way up if you're on the way up you're if you're trying to create something liquidity is not what you want you want money working all the time okay it's on the way down okay Sam Zell he's spiritually moving into the end of his cycle so he's gonna he's going to be much more conservation if you're on the way up you want to spend money you don't want to save money in the beginnings of your cycle okay if you're a coward investor okay you wouldn't want a dividend here even though it'd be nice to have it but what you don't want is this I don't want the down I want the up only okay and I want the benefits particularly if I'm earning money I want the benefits of real estate which you don't get to read the third way to do this is with a syndicator basically just find somebody a fund hedge fund they're buying real estate you bet invest money with the most of times you can't get to know those people are you could do what we're doing at Cardone capital where there's a guy to helm that you know that's heavily invested in real estate this is the last way you could do it I'd love for you to do it with me when we come back we're going to show you what all four these people have to do to get a deal done would you rethink user-experience rethink the digital sales process and rethink how you communicate with your customers pixel 506 is a digital design agency marketing and development company with one goal in mind how do you effectively simplify your digital presence to make your prospects do more business become excited and never feel confused when it comes to understanding what it is you do working with companies like future labs New York Metro Transit Authority and more pixel 506 has successfully grown businesses increased leads and created a lasting digital and social presence to drive more revenue and increase our alive if you want this for your business you can learn more about pixel 506 at pixel 506 dot-com that's pixel 506 dot-com for 20 years of experience in the real estate game cache now PA is the place to go for buying homes for all cash with no fees any condition with BBB accreditation great Abood owner of cash now PA has been helping customers get in and out of homes creating better spaces for living and making a difference in local communities with the focus on buying homes all cash no fees with any condition also be BBB accredited visit cash now PA dot-com that's cash now P a.com to get started hey welcome back to real estate investing made simple grant cardone here bringing you this from Grant Cardone TV right here in Miami I'm showing you the four ways to buy real estate they all have one thing in common Ryan what is it they all need debt they all need a loan okay if you're behind a deal you're probably gonna need a loan I had a guy in here the other day said me and my family we're thinking about buying deals with all-cash I'm like bro the first way to buy real estate is by yourself okay the last thing you'd want to do is buy real estate by yourself without a bank just because you're gonna do it by yourself well my family doesn't like debt I don't care if they like it or not okay what they're thinking in a primitive moment in time where debt are they Muslims no they're not must well good it's not against your religion borrow money bro you want to use it to leverage and I'll show you why here in a second the Reid is definitely going our money the syndicators gonna borrow money and I guarantee a card on capital we're gonna bar as much money as we can because I'm getting money for 4% okay I'm getting money look the bank's believe in this property so much all right they believe in it so much they want me to go get money they're like this is an asset we can't get enough of I'm talking about the bank now the bank wants this okay now I'm gonna show you there's four different loans you could get first one is a commercial a residential okay this is the type of loans you could get you could get a residential residential loan that's going to be four units or left's and you're gonna occupy one of them this is a pretty easy loan to get by the way no we've talked about in earlier shows and if you haven't tuned in to some of those shows you might want to go back and look at them they're archived at Grant Cardone TV number one is commercial or residential this is a fairly easy loan to get by the way I would strongly recommend you get this loan over a home loan okay go to four units because your next stop is going to be commercial okay now the reason I say this over a home loan is because this loan will actually be easier to get than a home loan is because it's not just based on your credit anymore it's based on two things your credit your income three things actually and this is gonna be added to your income okay because this earns income a home does not look there's just no income I've never seen a house that had income if a house it ends up with a lot of income it's gonna be called a hotel and it won't be a house anymore like if you're if you saw the movie bloodline they lived at their home and they you see it it's a crazy oh dude okay okay the third the third type of well these are the basic two types of residential loans right okay now what are you gonna need to know to do this what are you gonna need what is the bank going to ask you for okay how you living they're good okay what's the income of it who's gonna rent there what you're gonna call right can it cover the debt same thing here the commercial the difference is here we can go from four units to 12 units 40 units 400 units thousand units okay the bigger you get the bigger this deal gets the more they're looking at the income of the property and the less they're looking at you now that being said okay that being said and one other thing I want to note here this is probably going to be a 95% loan they're residential and this is probably going to be you should figure 50 to 75 percent loan here all right I'm gonna take your questions here in a second the easier it is to get the less money there is to make the easier it is to get the the more trap you are the easier that loan is to get I'm talking about this loan okay the less it will be worth the less money you will make and the fewer buyers that will be available for that deal okay so when we look at commercial deals I'm looking at a deal right now in Houston Texas nobody's gonna be able to make sense of this deal we just finished having a forty minute meeting on this me and run nobody else is gonna be able to make sense to this deal I know cuz I'm looking at Mike there's no way dude 500 units is not producing enough income of the locations so good okay I keep going through this I'm like I'm like split a split personality what was it jackal jekyll-and-hyde I'm like oh I want to be good no I'm not you know Phantom of the Opera I love her let's kill her whatever right and I'm like I want to buy this deal man nobody else can make sense of this deal nobody will make sense it is still nobody will pay this much for this deal I know this deals worth the money I know this deal going for it now before I'm telling you that because I know the bigger the deal gets okay the more desirable it's going to be in the future and the bank knows this too now the bank doesn't know everything they're not going to know the real estate thing like you know it okay you got to know what happens here okay they're gonna look at three things and I'm gonna take my first color number one they're gonna look at network trust me they will look at your network okay they're looking for how much net worth here Brian what do you think it's equal to the loan amount until you get big and then they're like okay whatever okay but they will be looking at how much net worth do you have I'm talking about when you play down here when you play up here they're not looking anything anybody can get this love I'm telling you ah yeah we'll give it to you okay you don't have to do a long one just like yeah well the linear the money okay okay maybe you can probably even have some bad credit problems here and still get a loan okay down here though they're looking not they're not gonna look at your credit first they're gonna look at your network fur second thing they're gonna look at is your credit but I'm gonna tell you something if you got enough Network they don't care if you got seven or seven or eight bankruptcies if you got enough Bank yeah man I beat her up yeah I didn't pay them no I don't yeah how much okay right if you got a net nothing networking they'll take advantage like I don't think they pull my credit score too you know I don't know if they do or not probably I know they're used to you know I remember how hard it was to get my first loan and the third thing is and this is what everybody doesn't know that's doing the real estate game is your track record can you manage the property look I know people with the first two networks they're the credits they're no management history they can't manage 500 units eighty-five million dollars they don't know how to manage problems and situations and economic turn downs and and contractions and markets and difficulty and competition let's take the first caller okay when I did my first deal parish okay I went to three Bates the first three banks I went to none of which by the way even lending money on the product I was asking them and money on it so I didn't know hey man the first question is do you even loan money on apartment deals yeah if I ask that that it said no to that rather than no to me go ahead what's your question yes someone like you get their attention and get them to look at our deal so I really appreciate bro thank you for Sam I just want to jump in right now so I am trying to construct like a 34 unit portfolio you know could be or could be 70 20 to 30 33 units depending on which field let's would do I'd love to get your thoughts on if I should if I should do it or not and just to see year overall up in the deal one one part of the deal is it's 12 unit deal it's a really important part of the deal I'm competing with now they're bitter on it I think and if you think it's a good idea I love you also get your thoughts and how I should communicate with the broker and deal with trying to secure the deal okay what's it what is the deal okay so is it the South slate Road deal yeah yeah so it's it's 12 units purchase prices 1 million dollars 12 units how much is your down payment okay so are you able to go to 350 if necessary yeah okay good so one of the things I'm working a deal right now and there's sixty five million dollars the dead on it I'm gonna assume the loan oh by the way when we first asked him if I could assume the loan the deals 80 how much 87 million 87 yeah it's 87 million dollars it's got a loan on it right now 65 so we did all that research we knew there was dead on it already hey can I send that loan okay because if I could assume this loan it's with Fannie Mae I said look Fannie Mae they love me okay I'm buying it from a company that Fannie Mae loves more than me though okay cuz this is a Multi multi fifty billion dollar company I'm not a I'm not a billion dollar company right so I'm Fannie Mae he's got a loan with this guy right now and I'm like hey can I take this loan first thing we were told absolutely not a week later they're like hey would you assume the lump I don't know what changed so don't know my point about that is this well you're pursuing a deal and by the way he's asking the right questions how do I go after the broker when you're pursuing a deal you got to have the right data and you got to be willing to persist that's why the sales game is so important negotiating so important reading people is so important right so in this deal because when I got them to assume the loan right here and said yeah you can us in the what came up in the last phone call was what if they don't let you assume the whole 6500 grant they might want to take this down a notch because you're a new borrower so that's why I just asked him would you be willing to go to 350 if you needed to and he said yes so one of the ways when you go to the broker my brother is you want to tell the guy hey man look we're prepared to put 75 25 percent down but would would be open to if necessary see you want to sell the broker that you're the guy and I'd want to show him that money going in okay now let me make it let me make sense of the deal first okay you like the deal already I mean you know you want to do this the other deal I know I want to do I don't negotiate I'm ready okay good so it's $45,000 for the debt who's who where's your money coming from do you know my parent oh the debts coming from your parents okay so the bank's gonna ask where your debts coming from so your parents are gonna be on the deal yeah and what's the NOI of the property that you doubt okay yeah so I mean this feels gonna make $32,000 a year twenty eight hundred and fifty dollars a month he's gonna put $250,000 down to do that the question does does it make sense what is that 12 percent 14 percent 32 divided by 250 its twenty five thousand twelve point eight it's twelve twelve point eight what years the property ninety yeah what's the location at three miles out yeah yeah okay so you love the deal you love the deal you think it's awesome so I think it's all gonna be about the bank now I mean that it's gonna meet the DCR DCR is a very important term when it comes to bar money okay it's gonna meet the loan to price so I don't think your debts gonna be a problem it's gonna be about your parents and whether you want or not stay with us we'll be right back best 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 will show you the right way to build cash so you can invest in multifamily apartments and other real estate investments like grant cardone sign up 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done so we just got parish a deal he's gonna buy a deal in Philadelphia a million dollars by the way parish yeah I'm sure you're still listening right now you don't need to pay a million dollars for that deal okay I would try I would try to buy that deal if your parents are on board but by the way if your parents got 250 I bet they got another 600 to go with it like Jesus go Stroke that dude to check I mean the way I would do this deal and see if you could what I would do is I would try to pay cash for this deal ok stabilize the rents get the rents up a little bit I saw it online so decent-looking deal don't know about that yellow yellow is a little hard ok but I painted a deal yellow that I made a lot of money on and and and uh it's got a good return you know but no man if you if your parents on if you if you can't get them fake cash for that deal once you just go step into a bigger deal because the only problem I have with this deal is what 12 units that's that's the biggest problem I have with this deal man 12 units 80 grand a door I don't have a problem with 80 grand a door that's not a bad deal a little bit of a problem with it being so vertical you didn't see it but but I saw it it's a little vertical for me hey but you got to start somewhere okay how fast can you get in how fast can you get out can you get a loan on the deal what have I told you so far okay 25 to 35 percent down but you should be looking for maybe as much as 50 percent down okay if you can't do that if you can't do that if you can't do that you're not ready for that deal okay next corner okay I've talked about net worth net worth they're gonna judge three things your net worth your credit what's the third thing they're gonna judge track record okay all right what's the name John what's going on in New York hey hey grant what's up for this good man Hey look the last time I called in you were gracious enough to give me a ticket to 10x I did end up going had a great time - thank you welcome thank you yeah yep okay so here's the deal this is my first deal I initially was going to go for unit and you kind of talked me out of doing a whole FHA thing I've rounded up a 10 unit I did have to raise cash on it the LPS wired in their money just last Friday we've signed a contract we're moving over to the bank phase now I am having a bit of trouble because my credit isn't spotless and also my trackers record is not there yeah but nonetheless let's take a look at the deal it was listed at 740 got it under contract at 675 it's a 10 unit deal noi 70 $1,200 I know eyes what 70 $1,200 well I like that that's nice yep yep yep solid ten cap and the cash flow after financing should be eautiful depends on what assumptions you use should be 30,000 on year one so this is the deal we I'm raising 170,000 on I've put up 25 but I'm keeping 30% equity due to being the GP yeah help you get a 70% split yeah okay so yeah so so how we're gonna get along this deal so so this is what he's figured out how to do he's gonna raise 107 and you're gonna throw in 25 right so 200 grand down it's 170 total of which I was going in 25 okay 170 okay and you're gonna put 25 thousand down okay so that's fine okay now you're gonna manage the deal and I mean the loans fund the loans not an issue okay cuz a lot this alone is gonna cost him about thirty thirty-one thousand dollars a year it's gonna be a forty one thousand dollar cash on cash is that right well I ran the numbers after the 71 noi the free cash flow ends up being like 30k on year one yeah just about okay well then what changed here because I mean what do you have the debt at the debt will be five hundred forty thousand for the mortgage yeah oh five forty okay that's three hundred that's 325 that's thirty two thousand bucks here right what do you have is a debt I have five same thing I mentioned I think for the 170 that I'm raising that includes also closing costs and a bit of working capital so maybe that's where we do it either way I mean you're making a lot of freaking money here okay you wouldn't you're making twenty twenty two percent on your money yeah it's a twenty that's a twenty two percent return like you know what's the problem there's no problem at all moving forward with it I guess I just wanted to ask around your syndication method is a common for a GP to invest cash and retain an outsize equity portion or else you come too you can do whatever you want you can create that thing any way you want by the way there's no unfair situation okay there's no unfair situation that you could create you could do this a whole lot of ways I personally don't like the way you set it up it wouldn't be attractive to me you know I I would treat things different okay I would be like okay 25 first of all I treat money all money to me my dad taught me this if you don't respect other people's money you won't respect your own people who can't if people abuse of the people they abuse themself right if you if you beat up you know what I'm saying like any if you're gonna if you're not going to be if you're not gonna be professional to other people you're not gonna be a professional to yourself it's not people can't turn on and off like that so the one thing I would do is this 25 grand you're putting down I would just make that the percentage that you owe dude that's your money okay you shouldn't get a premium for that but that should be just like 12 percent or 13 whatever it is you're a 13% owner in the money in the equity you with me okay then then okay down here you're gonna you're gonna everybody here everybody here on the money participates one way okay huh maybe that's a Class A shares ever yeah okay we don't need to complicate it Brian wants to come in on with all this legal mumbo-jumbo I just said okay separate you're gonna have a deal with the bank you see the bank right here the bank's gonna have their own deal right they're not gonna be an owner in their company they just want what what are they gonna want four or five percent what what's the bank gonna want four or five percent good good then down here man this is where you figure out your percentages okay okay so on a deal like this dude this is what I want this is how we structured our deal okay we structured our deal at Cardone capital on a six percent return okay now the reason we did that is because I believe in all my properties I believe I can get probably the wrong way to do this probably I need to put it the six down here by the way there's a lot there's a lot of groups out there that will promise you a lot more than six seven eight you're like that's not a lot more two points on six is a lot okay the reason they do that is because they don't have as much trust with their public right and the reason the reason mine is lower it's not it's not terrible but but I'm saying I'll tell you right now it you could find a higher preferred return but the reason I did that is because the people that invest with me know that I'm up here for this okay right because I do a 65 35 65 to them 35 to me the investor gets the majority but I want to I want people investing with me that one that are pulling for me man right there like go go go grant go grant make a bunch of money I don't want people that don't want me to make money because because what's your investors if you have the right investors you know some of these guys like they just want to buy the deal and they just want about the deal and manage the deal I'm not interested in managing the deal I got enough stuff to manage I'm interested in managing it so we can make a freakin way um okay I want to woo I want to have a frickin party I want to I want to kill something okay so every deal that I'm looking at I'm looking at hey man how do we exit so that's the other thing you need here what percentage do you need on the exit man now uh some guys put together these what's called waterfalls okay at this rate I get exit this rate I get exit this rate I get X you couldn't do that to okay okay because now you're recommending that I do that we do ownership based on contributed capital so no premium and investors get the preferred return and just look forward to kind of active yeah exactly dude that could be me like hey man you put 25 grand in my 25 grand is gonna be treated just like your huh what your your money even-steven dude but I'm gonna do all the work okay number to me doing all the work means I make all the decisions all of them the good the bad the ugly okay I don't need any from anybody coming in telling me I'm gonna do something different you do not want those partners by the way okay number three number three well how do we know you're gonna do the right thing because number three is gonna make sure I do the right thing okay cuz when I hit when I hit six I only get six when I hit up here I get X when I get here I get X and when I get up here dude I'm getting all of it so there might be a level where hey if I get to this return I mean you look like you're a twenty two percent return hey guys if I get to 16 I keep everything above that so you just took that guy from 6 to 16 you threw another number up I'll tell you what I'm gonna do my compensation is gonna be what makes sure we do the right thing here right you understand anything above 16 I keep all of it man all of it okay why why would we do that because bro that's what's going to guarantee I get to 16 you get it yep yep okay you get a job at perfect okay so so so if they're smart people do they want you to get there and by the way they want you to get above that okay now the only problem I would have with that is hey when you're gonna sell dude because you're getting so rich in those other six points truth is you're not getting rich I mean the only way to get rich in this deal because of the size is to sell it okay hope that helps that John you still there hey just just want one quick thing as far as your top line as far as all your rents go just to make sure you're working with real numbers all grants deals he gets the realty 12 the real numbers I notice on on the on the financials all the numbers are rounded you know like the one bedrooms are 900 the two bedrooms 700 I'm sure all those numbers aren't real and so I would just go through all your income all your expenses to make sure you're really getting at 22 percent you know I mean so so I don't know how you're doing your taxes but if 11,000 is right then 11,000 is right but I'll just go through all that and make sure it's all correct perfect I appreciate that the chances of those numbers sending zeroes is like like you have as good a chance of winning from winning a lottery ticket they're just not even appreciated yeah thank you I've never gotten anything from the federal government zero yeah and if I do I challenge it every time okay my name is Grant Cardone every Monday I come to you to talk about real estate we're talking about debt today we're talking about debt they're gonna ask you three questions at the end of the day folks hey what's your net worth oh by the way they don't ask me any questions anymore you know why after the first two times I'm like here's everything you want to know about me okay I gave them the package the day I met them do you do real estate loans do you do apartments what's the biggest amount you can approve like I know what to ask people now okay do you guys do apartments Northern Trust right next door to me I'm like do you are you guys doing apartments yeah we do them what does that mean yeah we do them okay like dude do you do apartments yeah yeah we do them that's not that means what that means we don't do yeah okay and only to find out yeah we're not doing them right now they just can't tell people no we don't do them okay so number one do you even do this type alone okay here's my net worth Wham I give it to them I basically this is all for my selling programs why would I have somebody asked me a question I know they're sitting sitting on okay here's my net worth statement okay I feel good about it here's my credit the last time I pulled it up oh by the way there's two things I'm late on they were both disputed I'm never paying them back and the Englander happened once from 1987 the other ones from 1994 right so I tell them what that is and the third thing is record my track record okay well I don't really have a track record except for the four hundred four thousand apartments I currently own and manage you know I'm still a little dude figure my way out okay now every market that I've gone into you know if they challenge have you ever bought in Orlando have you ever bought in Charlotte have you ever bought their bankers are stupid okay they're stupid people if they if they knew what I knew they'd be bugging this stuff they're giving you a loan they have two check boxes off they even call it checking off the boxes you'll hear it in phone calls we're just checking off the boxes grant I want you to know I'm like dude this is stupid yeah right how many times you heard checking off the boxes with the bankers yeah every call okay so so what's my net worth what if you don't have any network well guess what there's only four ways to buy real estate you buy by yourself you invest money in a REIT that is not investing in real estate by the way okay I don't think I'm being unfair there or you find a syndicator okay if you find a syndicator you need to find somebody that you trust man somebody just in the deal like that dude that just called in right his buddies know him his buddies know the deal his parents know the deal right they know the deal that's the kind of syndicator I'm talking about don't go with a syndicator some Publix in Decatur and he's got he's got a hundred people investing in a deal he's got no money in and he's just he wouldn't even buy this deal if it wasn't for them and the other way to do it is with like if you could find a guy like me okay that you know you know the dude you see the dude the guys don't eat like there's you know I'm gonna tell you something there's no syndicators that I know that they're doing a real estate show is there right no I don't know why absolutely not I don't know why you tubes available to everybody okay we just want people to invest with us they don't have the time don't have maybe the credit okay don't have the net worth you don't have the connections you don't have the track record look if you if you don't have these three things okay and you like the real estate game okay watch this how do you buy how could you buy a forty million dollar deal with a hundred grand you can't get approved for it you can't get the deal you can't manage the deal okay Ron Seco went from eighteen units to being part of eight hundred units overnight he just took his money from his little deels sold all that pushed it into one big portfolio that we own okay and he has the leverage of that 40 million 40 million dollars this is going to be about this would be what do you look for what deal is this this is that 370 units okay 370 units this is 57 million dollars actually sorry what's 17 million when you're friends right three hundred seventy seven million dollars how can you buy that deal on the interstate in Orlando you drive by it every day okay next to it next to it it's 219 what 2,000 what would yours this this is 2007 right seven right next door is brand-new product 2014 at $350 more per month yeah okay so I got a big deal next door to me there's a three hundred and forty dollar spread see this is this is what the bank wants to know do you understand that one day you're gonna have somebody pop a building next to you and it's gonna be competition to you I'm like yeah and that's gonna be good for this deal so the point is this I wanted to create a fun where my sister or my brother could throw a hundred grand into a deal and ride on this deal okay this bill over here is gonna take 17 million dollars to purchase I got to put seventeen million dollars down okay and Roberts is slow I'm gonna put seventeen million dollars in this deal I still got to manage the 40 million I still I'm still responsible to Fannie Mae to pay this money back okay and Robert Cisco can put a hundred grand stay in Miami never go to Orlando and say hey you handled my hundred okay I'm gonna pay him six percent a year which is preferred a preferred return plus I hope to pay him another four percent at the end of the year in a bonus okay because I want to pay myself a bonus too and then my goal is to double this money over the next five to ten years or sooner I've never been that long in a deal by the way for a double most of my doubles happen around thirty nine months okay if you go back over our portfolio which we're happy to share with everybody our average hold time has been thirty nine months when I take out the extremes on both the long side and the short side next caller Aaron how you doing grant here yeah what is your question okay and my question is I would have to do like with investors yeah so if I'm looking to get investors should I create a LLC or something or a business or should I just create like a slide show to present to them yeah no you definitely don't need an LLC you don't need anything right now what you need is about two and a half million dollars on that deal that deal is going to take a lot more money down I have to have my own money no no you don't have to do it without having any money yeah okay so you want to do it without having any money yeah what I'm telling you is you need to think about how you're gonna how you're gonna bar how you're gonna you need about two and a half million dollars for a down payment to do that deal okay here's gonna be her problem okay her problem is going to be this are you going to try to get a loan on the deal probably from someone private not necessarily from the bank yeah well I've never gotten along for the bank before so yeah yeah dude this is this is a huge deal for you to do by yourself in Nevada to Hawaii are you going to move to Hawaii manage it that's what I would like to do yeah I know this is sounds like a fantasy Allen to me yeah like this is not even real like like once you buy something right there in Nevada well I guess I should probably square I see him out my own houses for like my own house in Reno because Rena is so good for investment rental investment or it's so good as investment property because it's going up like crazy right now yeah yeah it is it's hot over there so it's a great market to be in right now all I'm saying to you is look if you can't make sense of deals in your own neighborhood they're sitting about falling in love with a city folks okay they said no I love Hawaii I'm gonna go there and surf every day didn't this is work okay these deals are work I remember one day getting a phone call hey grant we just had a problem with one of the properties really what kind of problem a guy and another guy you'll know where this is going a guy and another guy ended up having a guy problem and one guy shot the other guy out there in the middle of where the guys go to shoot each other on my property I'm like wow did the guy to get shot was he the tenant yeah he was good did he did we collect his payments minimum I mean it's a real business like it's a real business you got to know do people pay or not like like it's a tough deal so you can't do that you can't manage that deal from Hawaii by the way everything I'm saying to her the bank's gonna say to her the lender whoever the private lender is gonna say to her by the way private lenders can be as much a pain in ass as a bank in the investors can be more of a pain in the ass so they're gonna all do this what do you mean you're gonna buy a deal in Hawaii five million dollar deal you're gonna raise all the money now so she's got to figure that deal out she needs numbers right in Hawaii I know because of price compression higher prices she's gonna need more money down the bank's gonna want more protection by the way a bank the reason I'd rather a bank than a private is because banks will provide you with protection and intelligence okay cover intelligence okay what Fannie Mae provides me with intelligence they understand they're like grant what if friends come down oh wow wasn't thinking about that grant what if this happens Oh wasn't thinking about that Hey grant what if we think these rents are a little higher than what they should be in that market oh I didn't see that so the bank in my case particularly the bigger the deals get the more interests the more services the more intelligence the lender will provide you okay even a private even a private lender is gonna look into this though he don't wanna lose his money okay next caller was that too hard on her Erin okay she's like she's like do I need an LLC now your business stuff you always say the first thing you need is you need you need money you need a deal you need money in the bank by the way the bank's gonna tell you what kind of setup they want okay Erin so the bank's going to tell you how you need a single entity LLC to buy that deal or you need blah blah whatever whatever they're gonna tell you the bake you see the big most people try to figure out the loan documents before they get the deal yeah if you go to real estate school they're gonna you're gonna spend all this time talking about all this stuff doesn't have anything to do with anything I don't even know what an easement is I'm not I don't know the difference between a title search and a plat something I don't need to I need to make sure it's suffice is for the bank I need to spend my time and energy making the sure that deal is gonna make mone because that's the only reason I'm behind the deal I'm not buying it cuz the title the sidewalk the easement that's right and by the way the more hair on the deal the fewer people are going to be looking at that deal if I can get rid of the hair get rid of the issues that sometimes where the value this alright Big D what's up hello grant pretend you do oh thanks yeah yeah yeah thank you I appreciate that show on TV right here best show on TV Today Show Good Morning America what's that crazy dude on the stocks at night Jim Jim Cramer Cramer ain't got nothing on me yeah booyah sorry David go ahead no no where is that I was just wondering when you were 28 years old you said you were viewing properties for like three years you weren't buying anything what was the conversation between you and the broker because I don't want to wait the brokers time now but you dude dude you're gonna waste their time and don't even feel bad about it okay okay yeah yeah no that's the time that's it better that's a better question how do you even that's what you got to figure out your pitch you know the first time I made the pitch I'm like Luo man I'm not really buying anything right now and I'm listening to the dude right and the interest went down to freaking tubes man I just want to be straight with you man I don't want to waste any of your time that he's a word then don't and then they wouldn't call me back and I'm like I got to change the pitch and the pitch evolved into this dude I got the money and I'ma buy something this weekend I mean I got a mom I'm walking around like I got a rectal dysfunction on super reverse okay I'm like walking around I have to buy something this weekend my 10:30 one's about the end that's that that's code that's real estate edy backwards I got a 1031 clocking out okay hey can you call me back right now and then watch this I hang up the phone Ryan see me do this call him right back hey dude I hadn't heard back from you yet man spend two minutes I'm clocking out dude I need a call back please get me a deal okay I made that phone call for three years until everybody in the city of Houston knew I was a jack that's cool he's a jack like I swear if you go back to Euston day there's guys that like I remember you dude you'd call me all the time man you're a total jack yeah total jack that ended up with 750 million dollars where the real estate deals going to bill so you got a picture bro you got a picture on it and by the way he's the one that went got that dumb real estate brokerage license he's the one who did that dude okay he could have been a teacher he could have been a policeman okay he could have been a frickin veterinarian No he decided to go be a real estate broker well guess what that comes with phone calls okay you're the one who decided to work for one percent don't tell me man oh my god dude don't oh my god me you're the one to pick that freaking job by the way you're the same dude that looks at this stuff every day and doesn't buy any evidence so don't tell me about wasting my time if you collected as much real estate as I have in a short period of time that you've been dying okay you wouldn't have to take this phone calls anymore you'd be making a phone call rather than taking a phone call it was named Joe hey David and go go back and check out some of our previous shows - the grant goes over the 10 questions that he asked the broker in what grant saying and I hear him all the time he flips the conversation so instead of you dumping on the broker because the broker knows when you call him and you're like hey man I'm just looking at deals hey this is he knows you're a jack don't mention Lube net when you make the phone call yeah that'll kill you right there yes so so go into it saying hey look I'm super interested in your deal and then you go through your ten questions right hey who owns the deal when's the last time it traded what do you think about the deal because one thing I've noticed about brokers is they're just human beings right they want to tell you about the deal because their sales guys yeah yeah yeah and and by the way you might want to congratulate him about the deal e soul - like hey man good job on that other deal I tried to get on in that but you know what like you got a you know it's like it's like when you go see your car salesman okay you go see your car salesman don't tell them you just shop it tell them hey I'm here to buy today okay they're so jaded up they're so jaded they're gonna be like huh I'm here to purchase today oh and by the way if that's not enough price is not my only issue they're gonna think you have bad credit right away because it just sounds too good yeah nobody talks like wrong with you what's wrong with you what is wrong with you but I got a do for this deal so yeah okay good so yeah you look the point he made was what David David just said hey man I shop real estate for three years for three years I'm by the way I thought I was gonna buy something I just I was too scared and the reason I was scared is because my knowingness was so low okay like Aaron Aaron's gonna go get butchered if she goes and tries to do that deal right that's why I said Aaron go back and do the deal in Vegas do your first deal in Vegas okay I mean she sounds like she's 12 years old so you got plenty of time to go to Hawaii right so so like go do your first deal go do your first deal put a couple deals together everybody's gonna tell you the same thing particularly when it comes to debt so let me wrap up with this when it comes to the debt game first three places I went to I shouldn't even have been there you got to know what kind of money what kind of money that bank but Lin's okay when you go to dick ask them do you do these kind of loans do you do these kind of loans okay and be specific if it's a single-family residence four units if it's a commercial be very specific commercial eight units produces X has a DCR of right you know what that is debt coverage ratio okay if you're gonna borrow a hundred thousand if the if the if the mortgage is a hundred grand a year it's gonna pay you a hundred twenty thousand before the debt that's called the DCR 120s typically what the banks are looking for could be in 130 okay when you're talking to the bank do you do these kinds of loans okay MA this loan does a 120 DCR it's in a great area I have I have experience managing property okay really okay even if you don't have experience by the way I have experience managing property it's a third party okay so I have a third party management company as extreme experience my cash is coming from okay no we don't do those kind of loans good who does those kind of loans who in the market does that type of loan today and then and then and then you want to go to them I wouldn't go to a hard money lender first would you get your first loan right it was Wells Fargo well Wells Fargo local bank local rate what you went in said what well it was it was it was my first home she sews the FHA loan Wells Fargo I think there's a little you know just just standard and then my second one was a mortgage company yeah and what kind of deal was that what was the second deal another another 25% down no no it was a four-plex okay yes it was a four-unit 25 percent yeah how'd you know to go to them to Google you were to go sososo Wells Fargo turn me down right so I've been getting the second look for the second load they said you know you don't fit you don't check the box you don't you gonna check the box yeah and so I went and I found a mortgage company I asked the buddy cuz I joined the local real estate investment Association yeah and so they did you know guys what next week 125 bucks a year to learn to learn what I'm doing for you yeah yeah yeah and on the show on the show yeah no no they wouldn't teach you this kind of stuff where'd they teach you there they would teach you how to fix and flip you know they they were all they were they were focused on small deals okay one unit to unit 4 units yeah and and you know is like a bunch of 20 year old kids that were hungry for real estate it's just a good place that you know kind of live anyway okay so net what did they ask your network why did I have a net worth but they asked how much money out of the bank just for the down payment network 0 its 0 it's actually it was actually negative because I just didn't loans yeah yeah ok so even if you have no network folks you gotta start somewhere you know so so what so so you know what maybe you borrow somebody else's Network okay maybe it's me and my partner maybe you got it mate well do you do what you gotta do okay hey yeah me and my partner are going maybe I'll make my mom a partner maybe I make my mom a partner in the deal she doesn't put any money in the deal but I borrowed her net worth like like you got it asset that's why first show ever did here first show I ever did here probably the most important show ever did was on one thing okay you got a no you want to buy that deal in that neighborhood you want to know you want to go to sleep when we buy a deal I asked Ryan every time dude it doesn't matter whether it's a hundred percent of my money oh whatever it doesn't matter I'm always do I want I know I want to own this Neil next week next month the next time there's an economic contraction do I want to own this deal for do I want to own this deal if it doesn't make me any money do I know I want to own this deal because if I know I want to own this deal long term dude I know somebody else does too and somebody else want to own it means I can pay my loan off I can sell it and I can make some money okay look if I can help you buy your first deal all you got to do is hit us up here posting comments send me the address to your deal post it in comments we'll look at the deal maybe I'll have it on the show you can call in next week next Monday every Monday we do this if you're on our tunes of stitcher you can email me or Ryan Ryan at Cardone Capital dot-com Ryan Cardone acquisitions no change it man I said change it last week goddamn Cardone capital com Ryan at Cardone capital dot-com Ryan at Cardone capital com grant at Cardone capital com just email me your deal okay anything I can do to help you get you in the game get you in the real estate game get you in the passive income man get you in the game of games oh also if you want to invest with this card own capital calm card own capital calm we are check this out forty million dollar fund our first three funds already took in 30 million this fund will close out probably in the next ten days 12 days so if you're gonna play with me on this deal let's roll let's roll okay I got some great product getting ready to fill it in it's a great time for real estate folks we move around to different markets I go where I have to go to get deals so we're looking at product right now I have a sheet in front of me 387 million dollars where the real estate deals right here on this one sheet of paper here's here's a portfolio on mobile we just offered 80 million far they came back they all upset with me Madison Oaks I shouldn't say the name of them 33 million I'm gonna get that deal for sure I guarantee you the retreat up to up the street the retreat can't tell you the last name of a 58 million here's another deal place on you know okay 57 million I know I'm gonna get that deal if we want to close on it 39 no semi not over there on the what's that called the Gulf Coast beautiful property on the freakin like on the ocean 170 180 I'm gonna be I'm about for 117 cuz the bills 170 and then there's a deal in Newton in Houston 87 million dollars so look if you want to come play we rollin and we roll it fast okay okay I'm very very conservative how purchasing once I know then I roll hard okay look forward to having you on our team there are only three concerns homeowners have when they remodeled their home can I get it to look the way I want how fast can I get it done and I want a fair price at Bay city's construction we handle all three up front for you we get you the best price the best service and every kitchen bathroom Home Edition and home upgrade you're looking for right now serving all of Southern California Bay city's construction has no hassle pricing they guarantee the best work and give you a whole design concept from start to finish come to our office and let's get you started with the best construction you have seen yet visit Bay city's construction calm that's Bay city's construction calm to get started right now

Channel: Grant Cardone

Views: 252,836

Keywords: how to get broker, residential loans, buying apartments, cardone capital, multi-family, get bank loan, uncle g, commercial loans, deal reviews, best loan, real estate, yt:cc=on, simple real estate, home loans, grantcardone, become millionaire, NOI, increase networth, grant cardone, investing, secure loan

Id: PSj3OcEFT2M

Length: 62min 12sec (3732 seconds)

Published: Mon Aug 07 2017