How to Make Sense of The Deal: Real Estate Investing Made Simple With Grant Cardone

[Music] [Music] [Music] [Music] [Music] [Music] [Music] [Applause] [Music] [Music] hey grant cardone here Monday welcome to real estate investing made simple on the cardones own brought to you every Monday by the cardones own by the way if you're watching on iTunes or stitcher Facebook or YouTube man I appreciate you all you got to do is post your comment or your question below you can call in if you'd like to have me look at or underwrite one of your deals and/or have a question three oh five eight six five eight six six eight three oh five eight six five eight six six eight on this show we talk about multifamily apartment buildings okay now like all investments this investment like all investments includes some risk leaving cash in the bank includes some risk as well my friends okay your cash is being destroyed cash is not king cash is trash you should go ill liquid I want to talk to you about a couple things today one is the value of being ill liquid not liquid your parents taught you to stay liquid wallstreet talk to you about stay liquid the banks say stay liquid because well that doesn't get you illiquid and they want you liquid so they can get access to your funds okay all my money is in liquid every day I get a financial report can you get my cash statement I get a cash statement said to me it's a one-page cash statement sent to me every single day then I come to the office it's delivered to my office first thing and I go over my cash account and I try to figure out how do I get rid of cash how do I get rid of it if you live in Venezuela Argentina Brazil not not Brazil maybe not but Venezuela for sure they wake up every morning how do I get rid of money because money's being destroyed you got to understand this okay if cash was king then why why does the bank not just keep a lot of cash as soon as they get your cash they loan that cash out as fast as they can because cash is being destroyed in value so again I want to go back today and I'm gonna look at a couple deals I'm gonna show you a deal actually I found in Austin two markets that we're looking in right now it's tech and Florida the reason we're so heavy so positive about those two markets do you have the number for me on okay every day every day of the year in Texas how many one thousand people moved to the state of Texas every day now when you move to a new state if you ever did what's the first thing you did did you go out and just start behind places to commit to like I gotta buy a house today I just moved to Florida and today we're gonna buy a house the first week we're there probably didn't okay in Florida how many people do we have moving here 990 people every single day what do you think these people are going to do they are going to rent they are not going to buy a house even if they have a job with Facebook or Amazon and they're an executive and they moved to Miami Orlando Tampa Houston Austin where there's a lot of jobs being moved into Austin still today they work for Dell computer they're getting paid four hundred grand a year they moved I guarantee you Dells a campus is in Round Rock the first thing somebody's gonna do when they moved to Round Rock is not buy a house they're probably gonna rent hey let me see if I even like Austin so you've got a renter we got 1,000 runners every day in Texas nine hundred and ninety in Florida every day and by the way those numbers are gonna swell you have 80 million baby boomers my age that are dying I just got the phone with the guys dude you're dying bro he's 61 years old I said we are dying okay what got us here is dying I'm gonna talk about my body we are dying the plan the strategy that got you where you are today is over 80 million baby boomers right now are going to be moving to Reynolds I believe this it's gonna be the biggest migration orientation in the history of the United States wherever the boomer goes money flows these people are not going to become renters those that don't become renters they will die in their homes leave them to their kids and their kids will blow them out for any number after the parents died I asked on the phone just a few minutes ago I said hey man he's like I got 800 grand equity in my house good you died today what does your wife do tomorrow huh good question man what is she gonna do bro she gonna sell that house man sure she is why why is she gonna sell the house if it's that good a deal she's gonna sell the house cuz she can't take care of it exactly you guys don't need it now you just don't know it okay then you got 75 Millennials 32 34 31 28 29 26 they have no interest in buying a house all they want to do is rent this story is going to continue to play out I'm telling you okay watch what happens here we just bought a deal in delray i paid ninety two million five hundred thousand dollars for this property I don't know if we got pictures of it that we could throw up here this property rents for seventeen hundred and fifty dollars a month that by the way I believe today going forward is affordable rent what do I get for $1,750 a month an Olympic sized swimming pool security instinct community 300 families around me 31 acres a dog park kids park okay what else do I get in a theater right $1,750 a month let's say I went and found a house for 500 grand and it's my house do you think a 32 year old person that just moved to Florida would rather $1,750 a month do you have pictures of that place look funky all right we just need it for every show because what I'm gonna probably do this all the time last week and the week before okay check it out do you know what the rent on this deal is twenty-five hundred bucks a month isn't that about right right mm-hmm that right five hundred thousand times six percent I got to put I got to put 50 grand down here twenty-five hundred exactly oh I'm sorry exactly twenty-five hundred okay plus I gotta mow it plus I got electricity plus I got gas plus I got water plus I got insurance plus I got PMI which is basically screw you get charged you because you put so little money down they just like Wayne they take advantage of people man first of all they talk to you into it you gotta have a house and then they crank you for another 30 bucks a month or whatever it is you got it show them show them this deal oh by the way you don't get this for twenty-five hundred okay that's swimming pool the footprint on that swimming pool is bigger than the footprint on that house that you paid five hundred grand for show it to me again go back to the house I mean back to the apartment okay I got more I got at least on this property 31 acres I'll bet you we have 200 palm trees here how many palm trees do you have in your $500,000 house it looks like a post stamp by the way it looks and in your neighbor looks exactly like your house okay a theater probably got three or four hundred grand in the theater I have security on this property I have a gate that's probably worth a hundred and thirty thousand dollars on this property maybe I'll at least okay the gate on this property come back please it's been gate on this property is worth a hundred and fifty thousand dollars more than your houses huh worth more than more house more than some of the houses in the neighborhood yeah this story will not in I'm promise you it will not Ian now the question is what are you gonna do with your money today listen you got a hundred thousand dollars sitting in the bank earning point one one two percent that's what it's earning at the end of the year you will have $11.20 on your hundred grand this is what people don't understand I had a lady a day Oh godly you your deals pay five or six percent that's that's I wanted really I really need more than that I'm like what are you getting paid now babe you getting paid $11 for every hundred grand don't be stupid don't be greedy don't be dumb and you got to take some action man you got to get you money to work okay I would be happy to have six thousand dollars on a hundred grand I would be thrilled to death that would be great I would be praying to God thank you for putting me in this investment because number one I can't lose my money how does 31 acres of land three hundred and forty six units go away to I got cash flow every month three grand bought the deal grant didn't buy it for six percent grant barter because he thinks he's going to score five or ten years from the stay with me JC low quality leads and leaving voicemails for prospects is no way to grow a business we both know that what would 50 100 or even 200 new customers contacting you directly every month mean for your bottom line if you're a contractor then we can help you fill your pipeline and start today at current leads we help you fill your schedule with solid appointments get more leaves write more estimates and close more deals need funding to scale your business we've got you covered Chrome leads is here to help you to build your business brick by brick call us today at four zero three seven one zero six two seventy one that's four zero three seven one zero six two seven one or visit us at chrome Leafs comm today mail tagged more sales in less time know exactly when your emails are open know when your links are clicked on within your emails tracked performance metrics giving you unlimited real-time email tracking we give you precise email scheduling make sure your emails arrive at the right time every time increase your open rates and perfect your multi time zone sending we automate your follow-up process save time and energy through automation improve reply rates see how it can work for you try it completely free for two weeks no credit card required marketing and promotion is the lifeblood of your business if you tried Facebook Instagram link and have no clue why you're not getting leaves followers or any traction have you worked with other agencies and then nothing happened 10x productions grant cardones digital advertising agency is now available for you to get on track with social media lead generation full-scale training and production will get you the leads and give you the training to understand your social media and how to build a brand better just go to Cardone advertising.com that's Cardone advertising.com to get your free marketing assessment and we will get you on the road to the white marketing and all of your business needs visit Cardone advertising right now hey welcome back to the cardones on Mundy's is for real estate tuesday interviews with power players whens these business the marriage thursdays how to keep your hustle tight and then friday we talk about the economy and careers i'm talking to you about real estate everyday you don't need to do this with me but you need to find somebody to do it with if you're working hard every day to make a little money pay your taxes pay your bills take care of your family and you have a little bit of money left over get rid of the money okay one thing I can tell you for sure is going down in value second thing where are you gonna invest it if you don't invest it it will become useless why did you work so hard to have some extra money not to have it invested I know you're scared to invest your money in the stock market you should be we're gonna see the biggest rollover that we've ever seen in this country's history in the stock market could be just right out it could be in the next couple of years it could be it could be six or seven months from now okay there's some people saying that that market could roll over forty to seventy percent real estate does not real estate that produces cash flow does not roll over like that it never has since World War two rents in this country since World War two ended which was what 1945 rents have done one thing gone up now you're going to say yeah but houses went up too and so did the stock market sure they did but the difference is apartments provided cash flow while they went up these two things did not do that a house does not provide cash flow and Wall Street does not provide cash flow not monthly cash flow and if it was so safe then why Bank of America and Wells Fargo not lend you money will not lend you money to invest in the stock market but they will lend me money to invest in apartments because it provides cash flow and cash flow is the Holy Grail so three oh five eight six five eight six six eight if you have a deal call me I'm gonna show you a deal right now I found in Austin Texas Austin's the market that we're looking in Houston San Antonio anything Texas anything Florida anything warm I love the Carolinas I love Georgia some of these markets you need to be more careful in than others but I'm gonna show you a deal right now did you pull that deal up I also can I also ask you a few questions that I'm get on in sir please I love questions what's a good number of units to start with and investing in real estate well look look I mean the number I'm gonna tell you guys that I write about in the book okay by the way you can grab this book for free card on capital com4 slash book or grant cardone com4 slash free books you can grab this book for free I'm gonna suggest to you in this book to buy 32 units this is not possible for most of you okay so if you can't do 32 go to 16 if you can't do 16 and you're like man I just need to try four cuz I can afford for the problem you're gonna have with four and I'll walk you through it right now is you just have an imagination problem you're gonna try to make four units work but four units the most important number in real estate is the number of units it is not the cap rate is not the cash flow it's not the Noi it's not the expenses is not the per door is not the vacancy or the occupancy the most important number in all of real estate is this number that's your multiplier the more units I have 32 units or 32,000 mm-hmm okay I'd rather 30 2004 thousand the more units you have the more you can scale your business okay the more units I have the lower my expenses go mm-hmm the lower my fees go okay when I buy $300 300 compared to uh watch this 300 units and I got to do legal fees on 300 units or I buy I do legal fees on 30 units you understand the lawyer charges me same money for both these deals right so scale scale the legal fee on this deal is probably going to be $25,000 the legal fee over here probably going to be $25,000 same bill the difference is I get 300 units paying me rent but let me show you a deal you can buy right now okay let me show you a deal here's the deal in Austin Texas I love Austin why because jobs are going into Austin all you got to do is go to Austin see how many whole foods they are just go redo the research do migration charts look at migration charts positive and negative migration around the country what states have negative migration what states have positive migration you're looking for positive migration because their jobs I need jobs why do people go to Austin when you get to Austin you've heard about Austin go look at it's beautiful I don't care if it's beautiful dude how many whole foods do they have show me where there's whole foods and I'll show you where there's gonna be renters for long periods of time okay do you have the deal show me the deal let me see the okay there's the deal that deal right there is I forget the price on this deal okay $799,000 how many units is that four units okay Ryan this is this is what this is why I look at all kind of stuff right okay by the way I know I'd never buy this deal I would buy 400 units like that but I wouldn't buy four units like that but the reason I look at four units like that is to help you one and two oh that's 200 grand a unit compare okay now I'm gonna show you another deal that I'm buying right now it's a little bigger than this it looks a little different it's on 88 acres of land with a view of 15 million-dollar houses in the same city with them but but but even if you guys want to get started with this even if you wanted to get started with it don't don't show it yet okay hang on okay hang on guys okay I'm gonna open this deal up and let's see how this cash flow is just getting us excited I am k this property is on 2801 Skyway circle and you cap rate on this deals 3,600 square feet it doesn't give me a cap rate does it long-term tenants turnkey property sale recently closed for a model match sale that recently closed for 822 down the street two units what's the NOI for doesn't give me another one okay is that what it says a total of five thousand what do you see that which is oh yeah 1300 building is generating 5237 so it's taking in five to thirty seven a month growth times twelve okay that's about sixty two thousand dollars okay expenses on this deal are going to be about eighteen thousand bucks because they're gonna self bandage the deal and they're gonna make forty four thousand dollars a year may be like oh my god is so good it's such a good deal if I take the forty four thousand and divide by the eight hundred grand it was a five point five percent cap rate meaning if I pay cash for this deal give made under grant and I can do this and manage it my wife's gonna manage I'm gonna get Elena to manage this deal you go sit over there line up and you collect the rents and you make sure nobody's shooting one another and you make sure people are quiet and you make sure there's no drugs on the property Elena and you bring your Glock over there Elena and on the first of the month you collect that rent Elena okay and when somebody leaves Elena you get your little you get your little red-bottom shoes over there and you make sure somebody else rents that place see that's what these people assume they're gonna do all that to collect thirty seven hundred bucks a month okay that means somebody left the job paying them four grand to earn thirty seven hundred bucks see the problem with this I'd still do it though by the way if this was the only way I could get started in real estate I would do this you know why because thirty years from now that piece of property is gonna be worth two point four million dollars okay two point four million dollars anybody that about a five and a half percent cap rate is dumb stupid ignorant and not grateful okay you shouldn't you pay me five and a half percent to triple my money over time I'm all-in all the time the thing I don't want to do is I don't want to collect rents for thirty seven hundred bucks a month I don't want to do all this work for three grand a month it's not worth it by the way I'm not in a position to not get money for my main job every day I need money to pay my bills and that doesn't do it that's the problem with four units go find 40 units and get your mother your brother your uncle and your aunt to invest with you it's better to be creative in the beginning and get more units than to play a short game here and possibly lose this property if the market pulls back because it doesn't provide enough rent my name is Grant Cardone you're in the car down zone we're taking calls when we come back from break you're gonna tell me about your deal and I'm gonna tell you yay or nay but you don't go away wealth dynamics is an independent wealth creation firm we have products and services that help you make money keep money and multiply money you cannot build wealth without doing all three of these things we save our clients 25% on debt insurance taxes and investment fees increase income by 30 percent guaranteed tax-free liquid savings cash flow banking and secure eight to ten percent fixed annual returns and your investments without Wall Street on average we can do this in the first 90 days of working with you simply schedule a free consultation with wealth coach our services often cost you nothing more than what you're already spending go to wealth dynamics dot-com for slash contact to schedule your free consultation Chris food of hustle wholesaling chris is in the interesting real estate space but he's figured out a little niche heaven flipping deals when he calls Hotel and wholesaling I want to show you how to get into real estate without making all the mistakes I have he actually doesn't own the real estate what he does is he buys a contract he basically you don't actually buy the contract you control the con for correct visit Chris route com2 book a call right now [Music] [Applause] [Music] today the convergence of technology and imagination has reached new heights which are reflected in the advancements that we see in every area of our lives over the last couple of years AI o machines have made their way into our homes the battlefield our workplace and even into our hands in the form of smartphones with voice recognition digital assistance for the home represent an opportunity if you know how to take advantage of them that is where Nico's Computer Engineering comes in Tim Clark brings you the latest news about the most up-to-date strategies to position yourself in the digital landscape finding a path to productive business applications and how to automate them with artificial intelligence are just a few of the topics we cover in our weekly segments hey welcome back to the car town zone we're taking your phone calls we're talking real estate how many units can you buy is the market too high what happens if it corrects I just had a friend of mine just he's gonna send in a million-dollar 1.3 million dollars out of his retirement account to invest in show them the Delray deal see the Delray deal let me just show you that deal I just showed you was in Austin Texas by the way that deal right there I paid two hundred and seventy seven thousand dollars a door for that property we're gonna earn no don't go come back we're gonna earn five point five percent on the property per year go back to the other property the one in Austin which one would you rather earn five point five percent on let's just flip back and forth okay some people need more time than others mm-hmm okay that property or that property okay five point five on both of them which one would you read their own little brick their little little Tudor we got a little 2017 build 31 acres what does tutoring tutor tutor it's a tutor shake thing go let's go thank those of you need a little more time on this okay which one would you rather be invested in the mansard roof okay that that one or little shingle hang down that one I know some of you need to check with other people maybe you want to call your wife your accountant okay okay maybe you need to call the people with fidelity or swap maybe they can help you okay can you show them the 88-acre deal that I'm doing in Austin right now that one's called Gables look at this beast okay let's talk let's take a caller look at this beast 88 acres 2004 build okay the group that owns it is USAA one of the major financial corporations in the United States of America 88 acres of land overlooking multi-million dollar homes 88 acres I told a guy here in Florida he's never been to Austin I said dude what if I told you I can get 88 acres of land 486 units his eyes lit up 485 units 458 yo 458 units that cash flows at 5% a year he says how many acres I said 88 acres of land overlooking Sandra Bullock's house Sandra lives over there I know cuz I saw her at the store she was giving me the eyeball loving bad boys don't you yes she does yes she does and any sister dude if you can buy 88 acres of land in Austin Texas one of the great job markets in the country some of the biggest tech jobs Silicon Valley the rinse in Silicon Valley are $10,000 a month okay these units rent for twelve hundred and fifty dollars showing the gables again twelve hundred and fifty dollars a month and it earns five what's it gonna earn right in the first year I don't have out of the gate it's like it's little over five a little over five percent a year now watch what I can do with this property I'm going to show you the value of real estate how many units four hundred fifty a units for 450 yeah yep 458 units oops okay so when I go into the deal what I do is I figured out my return based on worst-case scenarios I talked about in the book over and over here okay 458 I'm like okay I'm gonna get a 5% return on the deal 5% dude could I live with that worst-case scenario could I live with a five you know what I could okay I can't find there's not another parcel anywhere in the city of that has 88 acres of land on it not one parcel in Austin so I get 88 acres of land I got a state that basically has no income tax it's warm people are moving there I got Dell computer indeed coming in Facebook coming in Amazon coming in I got five whole foods within 12 miles in the location of this property that was an employees with indeed a thousand employees within two blocks of this property and I got views of 15 million-dollar houses now what can I do oh I got 15 what would the Ritz here 1250 know there 1450 okay Fort note Ritz our fourteen hundred and fifty dollars a month man could I get another 150 bucks a month out of that place this is one of the thing I talk about the books the 25 the 50 to 75 the hundred the one and a quarter in the 150 could I add 150 to the Noi per unit 150 times 458 6870 per month times point nine eight let's say I don't collect at all sixty one thousand eight hundred and thirty dollars Oh per month 732 that ain't a year that's sixty-two thousand bucks a month extra by the way now whatever it cost to operate that property right now show them the view again me raising the rents one hundred and fifty dollars does not cost money folks you understand this property costs a certain amount of money to operate it's a it's it's a fixed amount that's what it costs back to me okay me raising the rents one hundred and fifty dollars it's not like we put a dog park in I'm not talking about doing anything there I'm talking about buying it and saying hey guys the rents are going up why I don't know somebody had to make the decision the last guy couldn't so I'm gonna okay I'm gonna make a damn decision dude I got 88 acres I got rolling the heels you can't replace this property if you need to leave I only got to keep 458 units full yeah okay that's unbelievable per year at 7:32 seven hundred and forty one thousand dollars a year extra income in oh and I divide that by four point five it's 16 million dollars divided by the four point five or five point five I just did four point five yes yes so what Ryan's doing he's gonna take this number and say how much value do we create did you just create by raising the rent 741 this is how the real estate game is played this is what so many people don't understand this game because you guys don't understand multiples if I take seven one in a divided and I say God could I find one guy somewhere in America that would be willing to buy my 88 acres of land can't go away by the way it's an asset 88 acres that cash flows 5% okay I know yeah I know you'll pay me what I paid for it somebody in the country will I'm not the only stupid person in the world now what will they pay for this other income because that's what you're doing you're basically this you're you're selling a business okay you guys are like I'm gonna go into business I'm going to e-commerce business I'm gonna start this business dude Apartments are the best easiest business in the world I don't need a college education I don't need a website I don't need a landing site I don't need to funnel I don't need either stuff dude all I gotta do is buy a business by the way that's not gonna go away you can't Oberer this business away okay hurricane can't come take this property away this will be here 10 or 15 years from now apartments are a proven asset let's talk to our caller okay 741 now Orange County see this dude in Orange County's gonna have to figure out some other place to go to buy apartments or he's gonna have to be willing to take a three or four percent return by the way Orange County I'm not sure and I tell run this all the time i'm not sure that i wouldn't buy apartments in Orange County and be happy with three or four percent return what's up man what are you showing your value though if you if you did this whole game plan fourteen point eight million dollars in value okay that's what that's what somebody would pay me somebody who paid me a fourteen million dollar profit just on this deal by the way I paid 101 million dollars on this property great yeah what's that man good man how you doing with checking numbers on 400 498 units in Austin say again ok let's do it you got it you got an address on that deal 1300 Crossing please oh man I've seen this deal 1,300 crossings place yes ok that's in Austin huh correct it's actually near the University of Austin Texas mm-hmm yeah yeah here it is ok alright ok gimme gimme gimme give me the deal on you trying to buy this deal or you want me to buy it I'll let you do it together ok let's do it together this make some money man and that makes me happier than in partners ok how much is the deal nothing so it actually it didn't undisclosed asking price okay I'm trying to work my numbers so I can determine a a a great purchase price yeah yeah yeah yeah yeah okay well let me just tell you first of all okay how many how many units 498 498 I love the size of it okay and what's the NOI current in Hawaii is six four six four zero three seven since they say again four seven four zero three seven okay all right that's the Noi so I'm gonna tell you what they're gonna want for this deal have you seen it in your emails I did yes all last week yeah yeah what do they want for it so so I can't call people on the phone anymore I got in trouble about it yeah what's the address so they don't have a purchase price they were just trying to work it backwards yeah working backwards so if I take that number and divide by the five cap rate I'm just gonna do a five what's the location like over there it's good huh it's really good it's lots of trees and lots of big trees big trees big wood means money okay they're going to try to sell this deal for they're gonna try to sell this thing for 129 million dollars right mm-hmm it's a monster right is that right if the otherwise correct yeah yeah 129 divided by the 498 that's $259,000 a door who's the listing broker in the deal I'm a CBRE okay yeah so I'm flying to Austin tomorrow tomorrow morning so I'll go look at this Neil what can I tell you about it man I love the 498 because again what am I gonna do can I raise the rents what's it what's the income per unit and what's the rent income per unit is that annualized it's 20,000 know-oh-oh so that's about 1750 a month see these are 1750 what what are hours in gables fourteen fifteen fourteen fifty so see again by shopping and collaborating and partnering this guys getting 1750 do we have a picture of this property the best of states let's see here oh yeah we got to go see this deal tomorrow right we'll go shop it let me see let me see let me just clean edition I have me a second one that's next door oh wow you haven't 48 minutes really yeah dude you're a man after my own heart huh my call let's find out what the rents are real quick hold on one second sure I want to surpass that four thousand unit why you want to do that man why you want why you trying to beat me why is everybody trying to beat me you know you guys don't compete with me oh my hand oh you got Ryan doing it I'm sorry hey hey Luis how much how much is the two-bedroom and I need to get in by the end of the month [Music] come on Louis you know what you're doing right that's what I said $770 whoa well furnace and utilities included what is this where it where is this use this University of States yeah something wrong with the place there's something wrong with the place no I'm trying to I'm trying to rent a property I want to I want to I'm looking for a place to live yeah I don't know the rest would that I can't I can't live with other people man they don't want to live with me either okay okay hey thanks a lot okay so that's this is student housing okay now here's the problem I'm gonna have with this deal now that I understand it because it's the student housing deal did that the debt is going to change a little bit Ryan you agree with this I do so you know you're gonna have more turnover doesn't meet that doesn't mean it's a problem but we already know we're at $1,600 a month rents there sixteen or seventeen hundred which is right in line with what you said they're saying it's furnished no furniture costs money I just had to figure that deal out so I don't I don't exactly know what the deal is we'll go shop it tomorrow what's this guy's name done I'm gonna go shop the deal tomorrow are you in Austin I'm not I'm in Southern California oh okay yeah well when you gonna go over there dinner the better you need to go over there mate hey Don he done so so CBR he has this deal correct right what's their guidance price on the deal dad I don't know okay so this is a good point so I talked to Don last week grant and one of the things they were trying to do is they were trying to underwrite this still to make an offer right so one of the thing for the audience listening is you have to get what is the purchase price of these properties now what grants talking about when he talks about hey the reason I don't like this deal is because the bank's look at if you get over 20 25 30 % of student or military yeah they start moving your spreads and your rates in the amount they they're able to loan you on the deal right yeah that's what he's yeah and when I tell you guys to find a deal it's got some scale man it doesn't mean your first deal needs to be 129 million dollars your biggest problem when this deal is not gonna be the price or the return or the even the loan it's gonna be whether you can manager or not the bank's gonna ask you do you have any management experience if you have the credit if you have the money down if you're willing to do the terms of the loan they're gonna be like can you manage this deal cuz they don't want to manage it they want to give you a loan for it so you know what I would do if I were you dude I would shop Orange County I would stay in your own neighborhood first I'd learn your neighborhood we shop a lot of markets today but I didn't do that in the beginning in the very beginning I shopped one marketplace the one I was in I lived in San Diego California the only thing I looked at was San Diego California Chula Vista to Vista like I didn't even go to Orange County like I couldn't even omit my own neighborhood so I would work to your neighborhoods so that you don't have to get on a plane and fly over there tomorrow we're gonna spend 40 grand flying over there tomorrow so that I can look at some property that I'm buying we have two deals under under contract there to buy and so I'll spend three days a lot of money a lot of time and a lot of energy to determine whether I can go through these deals the last thing I'll point out is when Don called me gives underwriting these deals for an 8% cap rate yes not Ruidoso you made a good point when you did your valuations based on a five and a half cap rate yeah for all these guys who are going out there looking for deals don't waste the brokers time because they're obviously they're gonna count you out we're writing it for you but more importantly than wasting the brokers time if you tell somebody you're looking for an a cap you will be put on a list and and and and literally you'll be on a black list okay and they're gonna file you under the idiot list the idiot list because they're gonna be like new market you don't understand the market and you they're gonna think you're ignoramus if you're looking for an eight cap you need to call Cole Hatter Cole said he knows where some eight caps are but he just couldn't tell me where they are gun alley okay I'll tell you where they are they're somewhere in the mid East where job migration is negative because there's no jobs going there there's people leaving there you can't even get a u-haul so many people are leaving there is no such thing as an aid captain a now can you find him yeah you can find him but more important than find them what you ought to do is take a five cap and make it an eight cap okay what you ought to do is take something that is a five and turn it in to something that returns you eight percent per year just takes time and in the first two or three years we tell our investors at Cardone Capital only accredited investors first of all only accredited investors can invest with me at this time hey look man the first couple years is gonna be a five it's gonna be a five percent return it might be six it might be four and a half it's gonna be somewhere in that spread in the third year I would expect a little bump in the fourth fifth and sixth year I would expect another little pull up okay sooner or later though in ten years over the next ten years somewhere in there I can't tell you when it's gonna be I can tell you this sooner or later the rents are gonna go from 1250 to 1950 okay we're talking about massive swings now 700 bucks I just got to wait okay I can't predict when I can predict for sure that will happen there will be $1,900 a month rents the deal we just did in Delray those rents are gonna be 2,700 bucks a month when I don't know when mm I got plenty of time okay it doesn't matter to me when it's just I just want to know for sure it's gonna happen that's why location is so important this deal in Austin and I'm buying right now we're written it for it what is it 1450 1450 1450 the people that bought this thing paid 80 million for it I'm paying him a hundred and one what would you rate the location they the location would be an A plus plus plus the only thing that would make an A plus a quad of a four four plus is it have a Whole Foods next to it the fact that it doesn't have retail around it actually makes it an older communities be less damage on the place it's freakin unbelievable 88 acres of landed the 88 acres has got to be worth something I don't know what what the 88 acres is worth 50 million can't buy I can't find it okay it's zoned for multifamily neighborhood okay what's gonna happen with this property somebody's gonna come in here in 10 or 15 years scrape the whole thing and build high-rises it's gonna be freakin luxury condos there in Austin Texas for wealthy people then by the way they don't want to acre land a lot they want to live in a nice place and go up an elevator like I live they just want to go up to their unit get off get off and then go to work out have the yoga person come have the scraper come rub their arm out and just be serviced okay it's just a matter of time when I get the rents are going to be 19 50 years they're gonna be 2020 2023 2026 just be patient okay we're not betting on the stock market here we're just gambling if you will it's not red or black it's like when will the Ritz go up I don't know I'll put all my money on it see that's the bet here it's not whether you win this hand or not it's when do you get paid on this deal to pick up another 500 bucks times 458 how much does that run that's 25 500 times 458 20 huh 2:29 229,000 yep that's how much it is a year mm-hmm $229,000 okay divided by 0.05 no it's got to be one that for 4.6 million five hundred dollars yeah 29 a month - 29 a month yeah see I can't eat the multipliers are so freakin crazy then I have to go back and double check my math it's 54 million grant okay - 29 times 12 of CC the number the multiplier is so it's so hard on the brain do because we never think about man I just I know car dealers that don't make this much money it's 2.7 million okay how much is it - 2.7 billion - million and $700,000 of extra cash flow per year if I could keep it all I'm not saying I can keep it alright to seven divided by 0.5 this is how the game works okay if the next guys willing to pay me the same money I made fifty four million dollars on that money all I had to do was wait till the rents went up five hundred bucks and some of that means not just waiting it means I got to receive five percent a year on my investment I had a guy tell me today he's like five percent doesn't seem like much more than you're getting you don't have one account that's doing five percent a year bro oh by the way without the threat by the way without the threat of losing your damn money right now there's reports there's guys predicting the stock market's gonna drop 40 to 70% in the next 18 months that ain't gonna drop 40 to 70 percent this is not gambling this is investing in hard assets being ill liquid do not sit in your cash equity in your home is dead money it's the worst investment you could possibly make to money sitting in a retirement account is terrible investment money 401ks IRAs get your money out of those accounts you don't even know what they're invested in typically they're invested in like ETFs like some who's the big ETF giant let me talk to the next caller ETF giant it's yeah then it's whele was that baby Vanguard Vanguard is the giant okay I mean trillions of dollars sitting in ETFs it's gonna be the biggest collapse the country's ever seen go ahead Venezuela what's up baby see man it's impossible for somebody in Venezuela about real estate I'm sorry I'm yeah that's all right man I I can hear you what's the question you I just wanted to did you know that I'm gonna be in your in your real estate program Oh beautiful man we're gonna do that February 4th and 5th by the way if you want to come spend two days with me on real estate maybe you can do the 10x road conference as well maybe you can't 10x I'm doing both I mean I already bought the program and I'm now tending to comfort as well yeah beautiful I'm just telling the people that are watching right now he's gonna be attending a two-day workshop right here in our offices in Miami on real estate where I'll be walking through deals showing you how we look at deals showing you how we under light do you have a deal or do you have a question Chaya you have a deal or a question Venezuela man see see like a look at the oil look what oils done it was 80 bucks two months ago now it's down to $60 they got tankers outside of Venezuela right now sitting there are hundreds of them sitting there waiting to go in can't go in you know why because they couldn't get the money they wanted they're like we just sit here sit here till it goes back to 80 they could be there a year cruise huh they don't even have food there man okay the dad tells the son he says go out get rid of this cash bring back anything bricks bring back wheel barrows bring back shovels you bring back anything but do not bring back this Venezuela money why all money's being destroyed yes sir next next caller I cannot wait to meet my friend where there's no interruptions next caller okay so we lost our callers today but the point is this all right what are you gonna do with real estate why should you invest in real estate number one number one here's the reasons to buy real estate this is why I buy real estate number one I can't lose my money as long as I don't over leveraged as long as I do not over leverage the property we do sixty-five percent loan to value okay I mean you gotta have a huge pullback to lose it by the way I still wouldn't lose it if I hit number two which is cash flow my money even though it's useless and unworthy and it has nothing I need that money to have babies okay population I need to populate itself as long as it populates itself as long as I have babies as long as I can put this in the ground and it makes some fruit I need I need $2 I need been right here I need you u.s. grant I need him to have some babies sperm eight okay I need him to cash flow I need him to populate I need him to firma gate what's the call with some other words not terminate I need him to populate firma gate impregnate impregnate I need a baby gate mm-hmm I need money go in I need some pennies coming out like just give me a little flow dude I need a little flow cash flow is king folks so if I had a million dollars I'm like I got a million dollars I need that million dollars I want to get rid of the million loose-knit I want to I want to bury it in something a liquid oh I don't want to lose it but I do want to get rid of it and then I want it to pay me 50 grand a year just pay me something to sit and wait can you imagine going to a blackjack table every hand you get paid something would that be better than getting a black jacket say dude keep your blackjack money I just want to be paid on every hand I don't even care what you pay me pay me on every hand until I get the winning shoe that's what we're doing here third thing okay I don't want to lose my money I need some cash flow and three I need the possibility of appreciation in the future an appreciation in this case is not a speculation appreciation is based on the fact that this property because of the city because of the location because there the jobs the rents will go up and when rents go up values go up Cardone capital that's what we do a card on capital this book is full of deals this deals this books got about 800 million dollars where the deals sitting in it right now where myself my family my friends have invested in apartment building it's okay these are our partners and they watch me buy deal show them the gables again first of all you could have you could have the money to buy this deal and still not get this deal this deal took a lot of time a lot of energy just to get under contract now I'm gonna tell you what we're probably gonna do with this deal over the next a little bit I'm gonna close this deal here in about sixty days and then we're gonna go look at it tomorrow I'm gonna go walk it shop it probably not gonna do anything to the damn thing they said hey what do you think you're gonna do to it nothing spit on it let me spit on the pavement I'm gonna bless it okay I'm gonna take I'm gonna take ownership I'm gonna sit and figure out what it is what did what did I just buy here can we show them the other one down the street yeah sure yeah yep no we're gonna pass on that one it's called Ashraf the other the one I said you need this is the one behind me right now we just bought 50 we paid 50 million dollars for that I know I could sell that for a profit Iran oh yeah that thing's paying 6% I love 6% yeah I think it's okay this is this is another property I'm buying right now this is 55 acres of land look at this it's got a nice little feel built in 2002 great Jim you know we were to go there and workout tomorrow morning should uh pumped that place up okay it's got screen porches 55 acres nice trees nice location Whole Foods across the street $1,900 a month rents across the street you know it's 2013 when I first started with you five I used to joke with me about Noi yeah remember the joke he said I don't even think Ryan really truly understands what Noi is yeah yeah but it's funny now looking back five years later because I've never seen somebody like you do so much with the Noi yeah you know from a standpoint of valuation from a standpoint of debt from a standpoint of like like what your exit is yeah like truly if everybody's listening right now if they can truly understand what Noi is yeah if I'm looking in your book right chapter six yeah those are the definitions right we all know the definitions but do we truly know what that means yeah so Noi means net operating income now now there's a lot of people that know the definition that's better than I do but what Ryan's saying is most people just don't know what to do with it like you know understanding Noi and understanding how to force a know I up right learning how to create creatively create more Noi how to make sense of it like there was a report this weekend of two deals that we passed on here in Miami the group paid what was the number on that whole portfolio Yammer group was landmark they they bought it for 100 105 they paid 105 my number was 92 it was 500 units for 92 I was gonna pay 92 they paid 105 I need to know every deal by the way if you're gonna play this game you got to know every deal in the market you can't you can't be a BMW dealer and not know what the Mercedes are selling for you got to know every deal in the market this cannot be a part-time game with you maybe it starts part-time this is a full-time game for me so I was trying to buy this deal I know the guys selling the deal I could have gotten the deal by the way I couldn't make sense of 92 million that's what the target was a group smarter than me paid 105 I need to know this this is 25 years old 25 years old how many units was that for 92 for 92 yep just two hundred thirteen thousand a year they paid 105 million divided by what 492 493 13 they paid 213 a unit okay this is tooth I'm sorry it's 1985 1985 product it's 30 years old Shaun del Rey again chum Del Rio I paid 90 two million dollars to 6270 a unit okay four brand-new product 270 270 thousand dollars a unit which one of these would you rather be something 25 years old something brand new so I got to know everything in the market I got to know what the NOI is I got to know what the Rinne is I got to know how can I raise rents who had the jobs who are the people how do I take care of what am I going to call the place how do people get to see it how do I advertise it so currently Cardone capital owns we own about 5,000 apartments we just sold 900 823 units sold another 100 units made money on both these deals just picked up about 28 million no 32 million dollars in so we're gonna take that and we're gonna go buy some more property that's what we do man that's what we do Real Estate's a fun game by the way you don't have to be serious I mean it's not like like I can have fun doing this and and and more importantly I can work my ass off get a little extra money pay my taxes take care of my family and if you got a little extra money left over rather than giving it to Wall Street think about hey why don't I invest in something that's real why don't we invest in something like this property behind me two hundred and four units fifty million dollars why don't I invest in something they can't just go away or people just make up what it's worth the rents are real the tenants are real the property's real it's got a real address oh by the way that's why we call it real estate it's crazy it's great it's so simple dude it's like the guys they gotta call me up this morning said he's like man I need some advice on money I said why you calling me he's like people say a lot of things about you do but they don't say that you don't understand money mm-hmm okay people can say a lot of things about Oh grand uncle grass a lot of things I'm nosy cocky yeah but I don't lose money period I don't lose money okay so if you guys don't want to lose money you want to get your money working get rid of your cash the surest way to lose money is to keep cash it is destruction of money by itself you do nothing second thing if you invest in ETFs and the star you're gonna lose your money it's just when you're gonna lose when does that company get destroyed okay look at AT&T stock or General Electric look at him for the last ten years losers the entire time guy this morning says I lost 200 grand the stock market last week who wants to do that who wants to do this up-and-down stuff I don't want to lose money 200 grand in one week to make one hundred and seventy five thousand of it back this week to not know what's gonna happen no more I don't need the drama invest in real assets that produce cash flow if you do that over long periods of time in fine scale get scale a promise you're gonna make money pick the location right manage the proper right take care of the tenants don't over leverage that's what I talked about in the book exactly what your first deal should look like grab the book it's free if we can help you on on your deal you want to call in tell me your deal help me walk through it you want to send it to the Ryan call in every Monday real estate made simple real estate investing made simple brought to you by the cardones zone see you guys at 10x growth confidence by the way right after the conference on February 4th and 5th we have a two day school right here in Miami if you want to sit down with me for two days carve that time out of your calendar you can grant what can they grab that grant cardone calm for slice program is that where they buy the seats two days come down here if you're investing with me you should definitely go to the school that way you get a better understanding I think it's ten thousand bucks to go to that ok 10 grand 10 grand two days plus plus whatever your hotel costs yeah yo god I got a spring money to learn this you're gonna either way you gonna spend money it's how you're gonna spend it okay if you guys are investing with me you should definitely come down to the school that way you can see what we're doing and why we do it so you understand the thinking the the the genius behind the madness or the madness behind the genius all I know is this I started with 350 grand my first deal was 300 grand my first deal was actually 78 thousand dollars I started with $3,000 and never made that mistake again my next deal I put 350 grand down 350 grand today is probably worth 2 or 300 million bucks because I just keep trading into deals made a lot of mistakes but I haven't lost any money okay okay you guys tomorrow empower players you hey a message to all military both active and inactive firemen policemen first responders also nurses and teachers I'd like to invite you to attend my 10x growth conference I want to do this for free I have a thousand seats this is my way of saying thank you to those of you who I consider the true heroes 35,000 entrepreneurs from around the world will gather for 3 days before the meeting you I look forward to saluting you I look forward to giving you a hug and I look forward to taking a picture with you you are a hero and you deserve what I'm offering here [Music] [Music]

Channel: Grant Cardone

Views: 28,892

Keywords: commercial real estate, real estate investing, self investing options, cash flow, multifamily, yt:cc=on, investing, apartment investing, multi family, apartments, real estate investment, Cardone Capital, property, wealth management, investing in real estate, grantcardone, investing made simple, real estate, apartments for rent, apartment complex, grant cardone, how to make sense, multifamily complexes, investing in rental property, retirement investing, money

Id: D0O9V6p1Q9s

Length: 63min 16sec (3796 seconds)

Published: Mon Nov 05 2018