Why the Housing Markets ON FIRE: Real Estate Investing made simple with Grant Cardone LIVE!

[Music] hey hey hey grant cardone here and welcome back to the cardone zone where every single monday i bring to you the economy real estate and your money it's money and mondays make sure you subscribe to the channel if you're enjoying this information comment like turn on the notification bar whether you're on facebook youtube or you're listening on a podcast like my friends at spotify and itunes i appreciate you joining me today grant cardone here every monday i come to you to talk about your economy your marketplace your money and today we're talking about the housing crisis in america they're calling it a crisis but i always say never waste a good crisis okay i mean once you go ahead and take advantage of that bad boy i have about 600 uh people also on a zoom call with me right now at the end of this cardone zone i will then take questions from that audience and literally underwrite deals that they're working on i've gotten emails this week on deals they're looking at multi-family single-family homes opportunities in the marketplace in this housing crisis so let me just tell you what's going on with the housing crisis in america today because uh this will continue to persist into the exaggerated future meaning for long periods of time this is going to continue number one there's not one place in america not one county anywhere in america and if you're an investor in real estate and by the way you're going to be an investor in real estate it's like food like it's not like you're not going to be investing in food and water food water and housing you don't have a choice the question is will you buy it and make money off of it or will you just buy it and lose money on it so that's why i say real estate has to be part of your portfolio part of your investment strategy it's got to be part of your budget and it's got to be part of uh your if you want to how you make money okay it could be in addition to the car dealership or the plumbing company you're running on the roofing company it's like how could i actually make money off of my housing rather than spend money on it whether you live in a single family home or you want to buy the apartments in your marketplace or a shopping center or a hotel you're going to either spend money at the hilton or you're going to make money on the hilton it's your call okay it's your choice but what i want to do is i want to give you like some facts about why why is this even happening because the more you know okay the more your certainty goes up uh warren buffett talks about this he says look if you want to get rid of risks just increase knowledge the way to increase your your your or decrease your risk in any situation is to increase your knowledge and the reason i buy so much real estate we have two point what five billion six billion dollars 2.5 2.5 billion dollars worth of real estate today we just finished closing three deals uh in the last 30 days a 69 million dollar apartment deal a 92 million dollar office office office deal next door to me and i might buy the office next to the multifamily i bought in boca because it's next door like when you know your market no k-n-o-w when you know your market when you know what's going on around you at some point you're going to look up and say wait a minute and that's why people that get great at what they're doing win at what they're doing why because they increase their knowingness whether you're you're hitting a hockey puck across the ice or you're buying real estate in your marketplace once you know your marketplace once you know what's going on in the marketplace okay for instance there's not one county in america where minimum wage can buy a house so what does that mean so i'm gonna do a little research right now and i'm gonna follow the numbers right that's what jeff bezos did to find amazon he followed all these numbers okay so let me see how many people are minimum wage in america millions right and interesting enough 80 million workers aged 16 and older in the united states were paid an hourly rate representing 58 of all wages and salary workers among those paid by the hour 54 542 000 uh were paid minimum wage okay so that's 500 what does that mean that means 542 000 people that's not bad news folks i mean unless you're a minimum wage and you're like i got to get off a minimum wage so but i'm talking to you as an investor how you take advantage of that if you want to get off the minimum wage that's knowledge i'm like okay wait a minute i can never own a home if i'm a minimum wage if you're if you're if you're not a minimum wage person and you're like okay there's a half a million people on minimum wage there's 80 million workers in america 80 million that aren't paid enough money the average wage the median wage in america just so you know is 58 000 dollars which 58 000 isn't gonna buy much of a house either okay so i'm tell i'm explaining to you first of all the minimum wage there's no places in america not one city in america one county in america where they can actually qualify for a home okay home prices three years ago 2018. home prices were double we're growing at double the rates this is three years ago this is pre-pandemic home home prices were growing at double the rate of wages so if you look at wages if you go back and look at any kind of wages across america you're going to see basically you're going to see this a flat line i'm not talking about for a decade or two you're going to see home prices going like this okay you're going to see apartment rents going like this you're going to see college tuitions going like that okay this is college scamming people out of money these are apartment rents these are home prices and these are wages okay and then you're going to see interest rates doing this these are rates okay now when you see these four things this is your economy i'm talking about every monday on the cardone zone if you're enjoying this uh if you're enjoying this today i just popped out from a house i was doing construction work that's why i'm dressed like this today i apologize but i jump you guys on spotify you don't need to worry about it i jumped from this house project i'm working on because and by i don't even love homes i think homes are poor investments uh when you compare to office big 200 000 squad 200 000 square feet of office or a million square feet of multi-family when you compare one home to the opportunity of many many doors and many renters and many lease contracts and lots of cash flow a single family home is a poor investment but when you see these cross over okay what happens to colleges 1.5 trillion dollars worth of debt covid happens the college is empty out apartments covet happens no apartment emptied out we collected 95 we kept a 95 occupied rate and 98.5 of the people that occupied paid their rent and and performed okay homes homes have gone up in in uh across the nation almost 20 percent in most markets excluding where there's negative migration meaning there's more migration outside the city of new york city for instance than uh back into the city uh when there's negative migration you've seen in every other city in america uh home prices have gone up as much as twenty percent in some places aspen los at malibu uh miami what else austin texas we're talking about home prices going up 60 and 80 percent this year naples florida skyrocketed 70 and 80 percent uh uh palm beach just up the street for me what is that 45 minutes ryan those prices are hitting record prices home prices there were like 30 and 40 million they're seeing 110 million dollar sales in palm beach today never before breaking every record possible we're seeing positive migration across the country from california into the state of florida in numbers historical numbers never seen before new york down to all the way down to the tip of florida but also people in new york floating into pennsylvania into philadelphia going into other uh less migrated cities into the raleighs the south carolinas the fayettevilles the ozarks like it's crazy what's going on in america right now california's migrating out into denver boise idaho into arizona we're going to be underwriting a deal in arizona today at the end of this show so i'm telling you that because the housing market in this country is on fire in addition to these kind of things happening okay in addition to these kind of things happening the reason the housing market is on fire okay is because number one it's an emotional response to covet okay two cash cash printed we have printed printed 20 of all the us dollars in circulation were printed by donald trump another 22 percent have been printed and will be continued to be printed by our new president biden okay 40 of all the u.s dollars in in circulation basically they are verifying what i have been saying for seven years cash is trash cash is leaving asset leaving its bank and going into real assets okay you have investors out bidding buyers on homes okay investors are beating the buyer at home let's say there's a home in denver it's 450 000 and the guy can only qualify for four hundred and fifty thousand dollars he's going to put ninety thousand dollars down he's a banker maybe or an engineer he's got a good job he's going to put 90 grand down he's going to finance this it's going to cost him about uh what is that note going to be what's the number 90 450 times uh point zero zero five five uh his payment's going to be 2500 bucks a month and uh i think that's right and uh and some guy says you know what i'm gonna do i'm gonna pay 500 000 i'm gonna write a check i'm gonna pay cash for it no financing and i'm gonna rent the i'm gonna rent that house i'm going to rent it out for 3 000 a month he's going to rent it out make it an income house he's going to earn 36 000 divided by his 500. he paid 50 grand more for the house and he's going to earn 7.2 percent on his money or so he thinks and he's like i can do this all day long so what's happening and this is happening all over the country folks it's happening right here in miami i know friends it's happening in houston texas we're about to announce a big purchase in houston texas it's happening in houston where buyers are being outbided not by other buyers there's a new level of player in the marketplace the investor the investor is like i can't go buy a big portfolio like grant i can't go buy an apartment building like grant but i can buy a single family home this has never happened in the history of our country okay where investors are now consumers of the singer single family resident turning the nation into renters and i have been saying this for at least i don't know nine or ten years america will become a renter nation okay and the last thing is uh international buyers and you're going to hear more about the international buyer coming into the marketplace right now america by the u.n was just raided uh the number one nation in the country they thought it was going to be china back in january and uh the u.n just said the number the number one most attractive country for international dollars or international investors uh will be uh god bless america okay according to the un published monday overseas investments by businesses around the world fell by a third in 2020 the u.s recorded a 40 fall this is back last year but narrowly held on to its long-term position the u.n in january estimated the u.s had lost his top spot okay and then came back this week and said uh not only did america gain this top spot uh but its economy grew will grow seven percent this year this will be the biggest growth that america has seen uh probably in the last 10 years this year supported by six trillion dollars in approved stimulus you're like hey why would man matt biden must be doing a good job yeah well he about to rain he about to rain six trillion dollars onto the economy now this has really affected a lot of things i think there's three more zeros right here this is a this is going to affect a lot of things and we've already seen it you saw the precursor to this uh in um you know in coat during covet 40 million people were out of work and everybody's still ate it's insane i've never seen this in my life 40 million people were out of work and you would think people bought more cars and watches last year than in the history rolls royce had the biggest year they've ever had in 127 years now how's that even possible 40 million people were let go shopping centers were closed okay waiters didn't have jobs uh broadway actors couldn't literally didn't get income why because six trillion dollars turns into a bunch of unemployment money where families are getting more money to stay home than they are to work why am i telling you all this we are 10 million people less unemployed than may of last year so the unemployment rates are coming down again we went from 40 million to 20 million to now 10 million people unemployed none of which by the way i don't even trust any of these numbers none of which includes the ineligible the denied or the people that can't file they don't even give you any of the real numbers anymore they just give you the numbers they want to so before all this craziness happened uh oil was i think oil this time last year was seven uh seventeen dollars today it's 72 just since in the last since january okay oil was 250 a gallon i think it went to zero minus forty dollars uh during covid it's at seventy two dollars today this is inflation folks it's here okay but i'm gonna make some predictions here before the show uh ends i'm gonna make some predictions every week i'm gonna make some predictions here right in 2020 yeah yeah it was negative it was a minus forty dollars wow okay that was trump in there trump was pushing on the programs we had all this gas coming out from underneath they were they tightened down everything here we weren't taking in imports we're back to the old guard now we're back to the old establishment um biden's not a democrat he's an established politician been around for 60 years it's the old guard the old boys it's a network they're going to it's the old country club thing they're going to do their deal they're going to say they're going to take care of you ain't going to take care of you okay um this six trillion dollars they you won't get a check for 1400 a month you're like oh i'm so good what you want is a piece of that six trillion where's that money gonna go now if they start spending out on highways that's going to be some big jobs and that'll be big money and it'll be a tremendous amount of waste in it i'm not in the government business so i'm i'm looking at from the outsides and you should be too how can i go get some of this windfall okay 10 million people were down from 21 million people last year now you're going to hear about inflation right now you're going to hear oh my god inflation oh my god inflation but if you look at the bond rate okay the reason i don't think we get inflation and i don't think we get long-term inflation uh bonds 10-year bond 10-year bond you're going to see a 10-year bond that spikes let me just go let me see if y'all can see my computer here uh watch this and this is for the last year is that is that a good good one no there it is here's here's a year one month see look at this thing okay now we should be getting we've been having a bunch of inflation talk recently see johnny can i go to a year here we've been getting a bunch of inflation talk and you see that you see interest rates have gone up from a half a point this is back in may of 2020 covet happens why did uh interest rates go up what happened here you would think that you would think that uh okay we're at three percent unemployment and the interest rates in america were five percent in may of 2020 is that when it busted if i go back a little further than that five years okay notice interest rates for the last five years it looks like this okay basically now we got a spike up here we got a spike going like this so why why is that happening why in january of 2019 interest rates were almost three percent and everybody said well they have to go up they can't go any lower and they continue to go lower they continue to go lower now what's happening in january 2020 january february march what was happening in 2020 oh yeah to wuhan watch this we're going to collapse the freaking u.s economy and shut down every country on the planet and in only how many months was that and only by january of 2020 what happened in january 2020 we're about to have an election in november we have an election notice when the spike starts january 8th january 9th january 10th let me get to november we're starting to have some movement forward i'm in st bart's by the way in november no no november 2019 right yeah yeah november 2019 that's the election right so let me just go back to those dates november 2020 november 2020 right what are we in 20 21 right now yeah yeah yeah so see see look i'm one one eleven where's my november date man i'm having a hard time getting it uh that's one month that big drop down right here you think that's november yes yeah yeah it should be right here should they they're there no i got to go back further okay i don't know how to use my own damn calendar okay is that 19 20. we're in 21 yeah no yeah it's already been a year it's crazy god damn i can't believe it passed out but what happened to home prices here in the last little bit johnny okay is nothing but this everybody's talking about it in every city and and what happens is when the u.s government okay the treasury department the treasury department is buying is buying bonds every month okay so when bonds come due and the government steps in and says yeah we'll take uh we'll take as much as you got let's see what bonds were bought last month it's crazy how many bonds have been bought recently um and here's the bidding wars right now on homes bond market when the u.s government steps in and buys their own products what happens is this supply and demand as long as you've got a lot of buyers you'll have a low price so when the us government steps in and says we'll buy all the bonds it keeps interest rates low so despite the fact that it would appear the interest rates want to go up i'm going to make some predictions here okay this country will become guarantee you okay will become a renter nation in the next three to five years you will see it substantiated and you will go back to this date and say dang i should have taken advantage of this this will be a super cycle for for the the u.s investor and international investor of multi-family apartments in this country inflation inflammation in inflammation will last longer than the inflation okay inflation is a temporary spike and it will pull back interest rates will not will not be higher next year than they are today despite what you hear by the government you guys can decide whether i'm right or wrong we can go back and look at this show is he right or is he wrong house markets will have to compete with investors for housing for the next probably three to six months and then they will continue to stay in the marketplace as long as the rent makes sense right meaning can i earn seven or eight percent of my money if so renters um owners will have to compete with investors okay uh the rental market will the the the rates on rents and i've been saying for the last three years rents will probably flatten out before covid i said rents will flatten out through 2020 2021 2022 and then they're gonna take off and soar okay dolphins will make the playoffs kansas city will win the super bowl cardone capital these are my predictions cardone capital will reopen for reggae investors and grant cardone will announce a major purchase of a major magazine okay what time is it okay and and by the way the last thing is ryan sacco will come out of the closet and finally announce his marriage to johnny the camera guy okay all right so so look every monday every monday uh i come to you talk about real estate folks i'm telling you like if you're if you're in a place if you're in a place like i was looking last night on my account on my uh cause i'm underwriting these deals in in houston texas okay and i pull up sugar land uh housing and then i just go to news i'm just going to show you how i do it okay and then i start looking up land area home prices up recently oh why are home prices up okay let's go look at this i'm sorry why are land prices up because first it's the land then it's the permits and then it's the sticks okay it goes in that order right first it's the land then it's the permits and it says uh prices increased two and a half percent from february and march two percent and one in in one month is that's a big increase prices are up eight percent from march in 2020 of the housing market there okay what's the average price of a home there um woodlands okay here's the wooden lids sugarland u.s sense i mean sugarland texas is a good i think a good uh gauge of what's happening in the rest of america so if i go to sugarland i'm on zillow now and say hey what's going on in sugarland are there any opportunities first house that comes up it's 197.199 000 so it's 200 grand okay 200 grand what's it cost what's it cost to buy a 200 000 house i could put five percent down on this right ten ten thousand dollars down i'm gonna finance 190 000 bucks okay i'm gonna go borrow money i'm gonna take 190 000 and i'm going to go by zero five five that's going to give me a monthly it's going to give me a thousand and forty five dollar uh payment plus pmi which is gonna cost me another 200 bucks plus the insurance cost me another 100 bucks uh plus uh gas water electricity so so this in landscaping so this person needs to make at least at least what to qualify for this loan ryan do you know what do i need to qualify for a house i know for apartments three times it's going to be on your credit score and see this is oh that's not sugarland though that's houston texas so let me get the sugar land now watch watch what happens when i get to sugarland okay 119 000 for a townhouse that's houston texas here's sugarland 239. 77498 see how zillow stuck in stuck in some of these houston addresses townhouse 208 thousand dollars um if i go sugarland proper i mean there's some million dollar homes in sugar land proper there's a condo for sale 269 so that's the real pricing here's a 67 000 condo for sale in leewood i don't know where that is um sugarland oh there's 7.45 now watch this house okay there's a 200 000 745 000 i got to put 30 i'm gonna have to put seventy thousand dollars down in this house because of the price right six eight six seventy you'll have multiple bidders on this house uh payments are four thousand bucks a month and they're about this guy is probably gonna have to compete with an investor that wants to rent this house for five thousand dollars a month and i'll bet you he can find somebody that would pay five grand a month for this beautiful home johnny can you show this house gorgeous house yes sir now houston and miami that house would be uh 4 300 square feet how much would this house be in miami how many square feet uh but look at it can you see it yeah oh my god yeah this would be a couple million bucks here at least depending on where it was located if it was on the water it'd be 12 million dollars so the point i'm making to you right now is this when you look at your marketplace okay you can't go build this today supplies you can't even get supplies you can't get glass you've got a glass shortage in america you got lumber problems in america you got lumber lumber's up 90 in some places like it's insane people can't people are hoarding lumber uh you got automobile dealers that can't get their trucks because they can't make chips because of covid so you got supply problems everywhere which has raised prices up and it could create an opportunity for the guy that could pay four thousand dollars to move his home in his family into this home another investor could say hey i'll pay 770 i'll pay 765 i'll pay 765 000. i'll i'll rent it for 60 grand a year 12 years i got my money back for the house and i'll pay cash for it how's he gonna pay cash for it because he don't want to leave his money at the bank ladies and gentlemen and earn what because you're you're hearing about inflation but what you're not here is this the banks have not raised what they pay you by even an eighth of a point much less a quarter or a half the banks are not raising interest rates and if they're not going to raise interest rates if they pay you you're going to take your cash out of the bank or you're going to take your cash away from fidelity or merrill lynch i think the stock market's off again this morning it's already they some people think that we're in a we're in a 10 or 20 percent correction right now bitcoin's off 50 so i'm telling you that to tell you this if if you're not going to get paid any more money these people that are sitting on cash trillions of dollars in cash more cash than i have ever seen in my entire lifetime and you're gonna earn zero and i've been talking about this that's your interest rate at the bank you could go over here and you could go to that house that same house that you had a three thousand dollar what was that 7.45 payment he could get a loan on that right he'd get a loan he can get a 500 he get a 550 000 loan that put 20 down times 0 0. and as a as an investment property could actually probably pay 3 percent his payments are going to be 16 000 a year 16 500 a year he's gonna earn sixty thousand dollars he's gonna put a good tenant in there he's gonna earn thirty four thousand bucks a year in cash on twenty percent seven fifty he overpaid for the house he put twenty percent a hundred and fifty thousand dollars down that's his down payment he's gonna earn thirty four thousand let's just see what this is forty three what is sixty months forty three so he's gonna earn earn 43 000 a year divided by the the 150 000 he put down yep he's going to earn 28.6 look blackstone is buying single-family homes ladies and gentlemen because they can't find a place to put their cash to earn any money now if a group like blackstone is going to do it why aren't you doing it this show cardone zone it's about money your money your economy that you live in the opportunities that exist and often more often than not particularly on mondays we talk about the real estate your real estate why your real estate because you got to either live in it or you're going to make money with it or you're going to just live in it and i'm going to make money with it okay cardone capital is here for you if you want to do this on your own i'll teach you how to do it on your own if you want us to do it with you if you want to do it with me do it with me okay if you're an accredited investor uh you can text me we're looking at massive deals we look at big big properties i mean everything from 300 units to 1500 units at a time massive massive uh investments in real estate infrastructure that produces cash flow so our investors can earn six to eight percent with an opportunity to double or triple their money over long periods of time it's gonna happen it's happening right now i've been telling you it's gonna happen i'll teach you how to take advantage of it and if you don't have the time or the inclination to go learn the game yourself and do the game find the deal pick the deal manage the deal collect the rents if you don't have the inclination the time the energy and resources to do that you can do it with us at cardone capital text ryan 305-407-0276-305-407-0276-305-407-0276 if you want more information like this more content like this hit the notifications over at youtube or turn the notifications on so that you'll get a reminder when i do these shows so you get new content new ideas new markets and each monday for the next five weeks what i'm gonna do is at the end of this show i'm gonna go answer questions for from people that i'm mentoring uh with the goal to have at our three-day summit we have a three-day summit in uh in july a three-day summit i've never done a three-day real estate summit in july the website if you want to grab a seat to it you can either come to miami we're almost sold out of the event but you can come to miami and be in the room with us or you can stay at home and watch it on a zoom call three days all real estate you can meet investors there i'm going to be bringing up super super superstar guests there that are in the lending market i'll show you the cheapest money in america i'm going to introduce you to investors co-investors i'll show deals underwrite deals there i'll spend three days showing you how to build a million dollar portfolio if you want to if you want to think big i'll show you how to build a billion dollar real estate portfolio the website's grant cardone.com forward slash in uh summit grantcardone.com forward slash summit grantcardone.com forward slash summit lastly real quick uh today bitcoin's at um 64 000. ethereum's at four uh at 19.95 down from four thousand dollars gold 1782 off from almost 2100 price why are all these things coming down housing's going up it doesn't even make any sense you tell me what's going on okay unemployment's down it's down to five percent 10 million more people employed a lot of people sitting home saying i ain't going to work i'm going to get my check okay and everybody thought everybody be going back to work centering this but they haven't because they're getting a check so that's a big problem in america by the way wages however are flat i continue to grow my company folks we've got 180 employees we have more employees today than we had before covid we bought more real estate during covid than we bought before covid i'm continuing to buy real estate because i know it's a good deal i bought an office building i bought apartments what do we buy about 600 million dollars for this stuff in the last nine months yeah and i'm gonna continue to do that because i know and this is where i started the show today yeah dude when you know when you know then you push it all in okay when you don't know what you're doing what you do is you tinkerbell you're a dilettante you're an amateur because you don't know how do you become a professional you increase your knowingness where do you start start where you live last thing i want to tell you guys is this okay if you're a renter right now start where you rent oh man i pay 650 a month okay and i got this great deal i got this great deal it's only 650 a month and the neighbor's 800. you know what maybe rather than talking about how good a deal you have renting the place maybe you should buy the entire complex learn how to buy it learn how to get investors there learn how to get debt on the deal you might be living in that perfect ideal place that opportunity that a guy like me would buy the property rehab it and change the rents from not from 650 to 800 but from 650 to 1100 and then sell the deal to another investor might pick up two or three million dollars those deals exist in your marketplace when you know what to look for when you know how to pitch it when you know what to offer and when you know where to get your debt that's what what i'll be talking about at our summit websites grantcardone.com summit three days in miami or you can stay home if you want to or you can come meet me meet our our superstar guest are investors lots of investors probably going to be a thousand people there all professional investors debt debt meaning banks lenders and people that have buyers and sellers for real estate acquisitions okay thank you for being on the show today you guys that are in our mentoring program stay around i'm gonna start answering your questions and i write underwrite to your deals the only questions that we answer here are from our vip guests uh that are joining us for our grant cardone dot summit or do we want these the the audience here johnny to be able to watch the questions that i'm that i'm feeling okay let him watch a little bit of it johnny next week guys cardone zone i'll be taking calls from those of you in your market where you're trying to i don't know maybe improve your business or maybe you want to exit your business we're doing a big webinar this weekend on exits how to exit your business for a 10x or even 100x what the value of your company is stay close stay in touch okay every monday i do the cardone zone we're always announcing new things that we're doing thank you for watching the show today let's go to our mentor program look at all these hands on the operators beautiful okay i got a bunch of hands up and we have katrina's deal too yeah we got katrina's deal so i'm going to get to katrina's deal today um chat boxes full thank you guys for being here appreciate it uh first i want to also i want to um just um a couple people called in last week and said man you're doing the show to the public but i thought it was private okay it is private it's private to you and it's exclusive to you and i see you guys in here and over the next i guess five or six weeks we will we will get your questions the way to get your deal underwritten for sure is one make it big and juicy because if it's big and juicy and you want me as an investor send me something and say hey dude i want you to play in this deal okay i'm sure everybody hopefully everybody here has a deal johnny should i be looking at my computer or here at this screen here so you can pick the people on your computer [Music] so okay uh what do this is from julian's phone and then if some of you got your hands raised i'll bring you on julian says what do you think about an 18 or 19-0 using lenders to buy a first-time deal as an apartment of 32 units love it let me tell you they're gonna look at how young you are okay what you need in that deal is not good credit and not money what you're gonna need is management experience so understand that you can have the money i was competing with a guy on a deal once he had a lot of money way more money than i had i knew i was going to get the deal they had never bought the market number one number two they had no management experience okay even even a fannie mae or freddie mac be like okay you could be worth a billion dollars but you don't have management experience we don't want this deal back and if you don't know how to manage something your problem's not going to be your age so your problem is going to be your management company how do you fix that collaborate with somebody like me that's why we're doing that summit you guys that have an opportunity to come to miami meet me come to miami and meet me okay let's partner on deals so that you are no longer 19 years old you're 19 years old with grant cardone you're an experienced immediately experienced instant popcorn you're an immediate experienced a billion dollar real estate portfolio that you could attach to yourself how do we get to grant cardone this is from hope menio you just did where do we send deals we want to work with grant on where where could we send how about can we set up an account deals at grant cardone.com andres what's easy our deals at cardonecapital.com we're going to set up an email it'll be set up in about 60 seconds deals deals deals at cardonecapital.com and you can send your deals there okay that's exciting by the way this is a great place for us to discuss all these deals at at the summit as well so one of the things one of the things we'll do at the summit is underwrite your deals we'll br we'll we'll give you the stage you get to come up pitch your deal um so we'll we'll have a chance between now and july 20 what third johnny wins the summit 17th when's the summit 26-28 26-28 okay okay what has to happen for you to hire non-us citizens you nee you need to figure out how to come to the u.s don't give me the task would we invest outside the u.s 1000 we would it needs to be big so that i can come there and have a have a footprint most important number in real estate okay most important number is the number of units and our square feet like we're looking at a deal right now it's 1.25 million square feet of apartments what does that get me it gets me scaled right so if i can if i can change the value of the real estate by just one dollar per square foot i make a million dollars so i start figuring out what do i have to increase the rents if i'm buying square feet right the square feets value square is the value of the rent how much do i need to increase the rent we were just looking at a deal ryan and i i'm gonna have to pay a little more money to get this deal and i start trying to figure out okay how to make sense of the deal right so i'll show you i'll show you there's so many different ways once you know you love something you got to know number one dude i love this piece of real estate i want to go to sleep with it i want to wake up with it i want to collect the rents there i want to visit it i want to landscape it i want to paint it i want to take care of it i don't mind spending money on it i love the real estate number one thing love the real estate now you got to figure out how do i make sense of it so i'll give you a couple ways remember the dollar i gave you that dollar metric okay if something rents for a thousand bucks you could pay 100 grand you should run you should grab a bat kill everybody on the way to the property and buy it okay so i'm looking at a deal right now the average rents are 11.67 in a market in a market where the rents really should be closer to 1370. so the market rents this is market rent and these are effective rent i'm answering a question right now from the chat okay so i'm like okay there is some opportunity this is the gap or the delta the delta is there's a there's there's a sag here the sag the sag or the delta could be for a couple of reasons the the most obvious reason okay could be oh man it's a bad economy could be it could be a bad operator or it could be the economics of the operator okay so there could be many reasons why the rents are down but one reason could be oh a terrible economy second reason it could be more supply maybe more supply than there is renters so even though the market should be 1370 it sags or or or softens the rents the other reason though it could be the owners economics and the owner's economics and this happens a lot okay this is the perfect deal you're looking for these are the owners economics and or motivation in personal um in personal development we talk about the why what's their why well their why is they paid they paid what a door once 140. 140 a door yes sure they paid 140 a door and they're getting 11.67 okay so 11.67 divided by 140 is an 83 is an 83. look remember what i said to you okay i said if you get a dot uh uh what is it the ten percent what is it the one percent rule the one percent rule thousand bucks for a hundred grand the one percent rule well they're at eighty three percent of the one percent rule okay one percent right for every thousand dollars if you can pay a hundred grand for the unit you're not gonna be able to find hundred thousand dollar units anymore it's gone i was telling you guys to buy those deals five years ago and you didn't do it now he went in and paid 167 but they bought this massive portfolio when they did it so i'm sitting here saying okay i got to pay for that same product uh what do i need to pay ron what what's our number per unit 167. 167 000 per unit okay and they they paid 140 000 they're at .83 let's see what i'm at i'm it you guys following me right now i know you could get confused okay so i'm gonna take the 1167 divide it by my price that's his price 140 a door my price is 167 door he wants to make money he's going to make a lot of money on me now i'm trying to make sense of the thing i love i can't get it if i don't buy it somebody is going to buy this asset there are eight other groups going to buy this asset it's going to be me or it's going to be one of the other seven guys they're not stupid people and that's the beauty that's the beauty of dealing at this level because you're not dealing with stupidity you're dealing you're not dealing with emotional people somewhat emotional but you're dealing with people that are in it to make money period okay so if i divide the 1167 by 167 i'm at 69 percent of the one percent rule what did i say about the one percent rule if you can find one percent one percent real estate today you need to take a bat get in your car run over everybody in your way and club them on the way over there to make sure nobody else gets that deal because that deal is going to be a screamer okay and that's true in almost every market in the world okay it but i can't get to one percent they didn't get the one percent why would i expect to get to one percent they love the deal it's a great deal it's a great asset it's a great location it's a great market why are they at 1167 because they don't need to be above 1167 okay so here's another way to look at it they're at 1167 they're making money at 83 percent of the 1 is this too complicated for people right a little bit it's getting pretty deep yeah it's getting deep watch this what do i need what do i need i'm at 69 of the one percent rule you guys got to know how to make sense of it man this is math you know when i first joined when i first joined your team seven years ago yeah i said if i could just figure out your math i'll be a genius because you totally totally so simple so so this is simple it is this is this is simple so watch they were at 83 percent they're gonna make on this portfolio they're gonna make they're gonna make twenty seven thousand a year and while you're doing that so they're gonna make 38 million dollars on this deal yeah okay and now i have to make sense of is it cool to pay them 38 million dollars this is what people that are in business say like well why why like why are they selling it they they think that you know everybody should buy and hold it should be they should never sell if it's a good deal it must be something wrong with it like why are they it's not a dude i'm not getting a divorce i'm making money they want to make money this is how they run their fund they make money they keep a deal six or seven years and then they sell it and sometimes they make money sometimes they make a lot of money sometimes they make a little money okay i have to make sense of do i want it or not this is so simple that like do i want to own this do i want to wake up with it do i want to go there do i want to paint it do i want a landscape but do i want cash flow from it so now i'm trying to make sense of okay if i buy it and don't do anything what is my return and or what do i got to do to get a little more okay now they're at 1167 what would i have to change the rents to get to 83 i'm just going to pick pick a number i'm going to pick a number like uh what was the average 1167. the the average uh rent there is 11.67 i'm going to pick 50 bucks 11.67 and 50 is what 12 12 uh 17. 12 17. divided by 167 is the new the 167 price that i'm paying per door i'm at 72 percent now whoa whoa whoa man for 50 bucks 50 bucks baby i got the neighborhood man what if i get another 50 bucks right so now i'm gonna go 1267. oh by the way the the the market rents there or 1370. why is he not at 1370 because he don't need to be he don't need to be and he can still satisfy his investors that's what i'm called owner economics or owner motivation okay so you're looking for the owner's motivation the last owner not yours i'm going to go over all this in the summit by the way we'll spend three days talking about this and and the goal of these calls each week is to prep you for to get your mind a little molded about how i think okay so let's go to 1317 still 50 below the market rents 13 17. no 12 17. oh yeah or you do no no no no no 13 17. 1367 1367 no no 1267 sorry 1267 divided by the 167 that's what i'm paying per door oh now i'm at 75 okay so i'm getting in the neighborhood so i know i can get there now what i got to do is just do a little more homework on that property you know does it work for me what would i have to change the rents to get the return i need okay uh do i want to be in that location okay do i know what it costs uh do i know what uh the the homes homes by the way are now and always have been really uh competition to the apartment market so let me just go back to my zillow right here you see this house right here um that house is going to be competition what's it going for so my rents i'm not going to show you the asset i'm buying right now just because my rents right now because i haven't closed the deal yet my rents are 11.67 i'm actually showing you in real time an underwriting of a deal i'm trying to do okay the this house is 7.45 this house is much much nicer than than what i'm showing you right now i have a thousand square feet just under a thousand square feet less than a thousand square feet this house is 4 300 square feet okay okay is it is it a fair comparable i think it's a fair comparable somebody's going to look at it if they're qualified but watch what happens here 745 745 000 this is a jumbo loan right yeah it is yeah he has to put 150 000 down okay okay they're gonna finance six hundred thousand and a hundred fifty thousand dollars that's real money dude that's a lot of money bro like there's nobody living at any of these units that has 150 grand liquid right okay so that's where it's not competition anymore i'm i'm out of the competitiveness because that that's not the right house so now i'm going to go back to a house in that neighborhood what zip code should i be using ryan let me uh for the port for what i'm talking about let me just get it for you uh let me see here and then i'm gonna go to another question okay but i'm showing you guys the different ways to look at a deal seven seven seven seven four six nine seven seven what four six nine oh seven seven four six nine seven seven four six nine seven a whole lot of sugar on that zip code seven seven four six nine we've got katrina's deal and then we also have a bunch of these hands yeah here too okay so here's the deal here's the deal seven seven four six nine twenty nine hundred square feet how much is this why did they what they what they showed me on here no let me see i could tell you next to our other deal oh there there's 583 no no this is the comps i wanted 583 678 595 634 um that shouldn't be in there go go ahead ryan what are we going to say i was going to say next to sell at 600 to 1.2 yeah 600 for 1.2 million to 1.2 million so those are the those are neighbors so if you want to live in this little neighborhood that i'm in uh these are the cops now i'm going to comp the homes now i'm going to comp the rentals i'll go back in here and look for okay i want to rent in sugarland what can i rent for okay let's see oh here's here's a place i can rent for two thousand dollars 1900 square feet i can rent for 2 000 that's that is definitely a comparable and competition uh to what my rental is okay to what my deals are you got to know the point is you got to know your market know you want to be there uh and know how long you want to be there okay i got a deal from katrina um let me see that deal and this deal she sends me an email because i close my um i've got katrina on the zoom as well oh yeah go ahead katrina tell me about your deal uh let's see here johnny is there a way we could search katrina let me see if i see you give me one second awesome do you know her leslie uh katrina who sent in the deal can you raise your hand please on zoom that may that i had it you did and i blew out my she she had sent me a dm i blew out my notes for the day guys sorry oh you did it's fine katrina katrina if you are on zoom let me see she said we're going to do your deal let's do this let's do this i'm going to do the katrina and the blue the one that has video let's see if she's the one who had the the deal hey katrina just unmuted you did you send us a deal yes can you hear me yup got you loud and clear you want to tell us about it okay yes i just found it too great go ahead um a 352 unit deal in uh arizona okay um 161 of the units have been renovated renovated and 191 units are still unrenovated so 46 are done 54 are still left to be upgraded so let me just make a point these people went in and rehabbed this building okay and they're doing exactly what i tell you guys to do when you go rehab never rehab the entire property you will never ever rehab the entire property you will rehab a 50 of it or less and leave the rest of it for the next guy to tell his story okay like i know i know properties where they'll take out a 352 they'll take three of them rehab them and then tell the story oh my god we raised the rent six hundred dollars so much all of them yeah on every one of them 100 of every one of them that that proves and validates there's an opportunity you can find three people anybody can find three people to pay more rent okay what is what is the uh what is the uh the price do you have a price on this deal i know the the that's the problem um i mean uh cbre wanted market and an all-cash deal yeah so we had to come up with i had to come up with what i think the market price is um show the deal johnny i came up with one okay uh 43 795 43 795 right what what is that 43 43 million seven hundred ninety five thousand is the price okay how did you come up with that number i came up with that number by taking a look at the comps that are in the om and um and then talking to the broker finding out what the cap rate probably is and just doing a lot of research and comparables and i came up with 124 000 per unit yeah right how much is it 124 unit this is in this is where in phoenix is this glendondale glendale okay and how's that how's glendale as a market okay i'm glad you asked as a market um i'll tell you in one second let me pull it up um so right now as far as cities go over the past glendale has a population growth between 2000 and 2019 and 15 so that's the average um their median household income between 2000 and 2019 has gone up 27 percent the good the things that are really good the median house has gone up 113 300 241 100. yeah hey katrina hey katrina though when you're giving us these numbers though what is it though what's the average median income because i know it went up but what is it what what's the what's the average median income hold on [Music] i think it's 50 50 57 57 137 yeah okay so and this is what i said in the early the earlier show the average income in america is 57 thousand dollars so so what then then you got to take from that cost of living so home prices are getting jacked up in phoenix land values are getting jacked up because california's coming in because california's buying those homes and california is buying the apartments and the investors are buying that stuff they're not that's not the locals doing this the local wages stayed flat many of those people are out of work they're paying they're earning 1400 bucks or maybe uh 2 800 bucks a month okay so that's who your renter is going to be you get you buy this deal when california quits migrating to arizona once they spend the summer in arizona they're like yeah that maybe i want to go back and pay taxes in california okay so after they get the heat you know they get some of that 117 they're like i'm able to go back to 17. so um fifty-seven thousand dollars your your tenant can can only pay because it's three times right two and a half times taps out around seventeen hundred bucks a month about three times seventeen hundred yeah times three i mean you're stretching them out at three times yeah so three times is 5100 a month yeah there you go and and i got there right so yeah so how much is it a month that's sixty one thousand a year sixty one two so fifty one hundred per month so three times yeah you know you're right so 1700 yeah yeah it's 1700. now these rents are how much on this place well the average comes out to 900. yeah the average rent's 900. but the place also looks like a 900 a month place i mean it it's nasty looks like an old motel that was converted now i don't know about the location i'm just telling you what it looks like to me like when i look at it and i pull it up you have the o.m yeah i'm looking i already looked at your om but now i'm looking at looking at what they did to it they did the lime doors on it the lime fence they got the you know they got the water moving in the pool i'm looking at their website right now where they rent um glendale has traditionally been a sea market yeah it's it's it's typically been a sea market it could be getting better but you got to understand in these markets that are really hot right they're hot uh tremendous activity going on okay uh here's the rents on a 122 number unit number 122 studio 630 to 750 with 250. on approved credit available now do you know what their occupancy is by the way um no you don't you you only know by the way you wouldn't none of this do you know for sure because it's in the prospectus and i tell you never ever depend on their prospectus right so uh here's a one bedroom one bath 770 to 870. uh here's a two bath 1000 to 1165. available now um here's a another unit 870 a month so why are the rents set 870 but this this person can afford 1700 that the median income that you talked about can afford 1700 a month they're building a lot of new product in that market the person cannot afford a home and they're making 57 grand they're like you know what let's go get something with a really really slick pull great security etc okay why are they going to be at 780 because they only make 30 000 a year so remember remember this katrina when when they say median income is 58 000 or 57 000 half the people make less than that and half the people make more than that that's how you get this number some of these people are making 30 grand a year right they're working in a restaurant they make 2 500 bucks a month and that's your renter okay 2 500 a month now because you're gonna have to check their credit every person that comes in you got to check their car their their credit score their criminal score uh the down payment uh their credit their their their renting history like there's a lot of work goes into this stuff that's why you need a team that's why i like the number of units you got here and then and then um then i'm gonna do the math on this deal this person can now afford 800 bucks a month based on the the the three to one um ratio meaning i earn three dollars i can pay one dollar in rent some places in america like in the california's there's people there they make two dollars and one dollar goes to rent people at facebook are paying they make 200 grand a year paying half their income in rent okay now let's go back to the numbers on the deal this deal is 48 million the way you underwrote it are there abouts 43. oh 43 million okay 43 million dollars you got to put 10 million 11 million dollars down to buy it you're gonna finance 32 million dollars the rate's going to be about three percent right it's an all cash deal yeah i understand that's because you're reading a prospectus uh i am going i'm going to close with all cash it's going to be fannie mae's cash and some of mine all right they didn't say uh it's got to be 100 of your money with your name and your face on it so we're going to finance 32 million we buy every one of our deals with all cash uh your payment's gonna be a million dollars a million and eight thousand dollars a year what's the no on that deal um let's see okay the annualized rents are 4.2 million is what your your thing says and i think you're going to keep about 52 of this 52 percent for the noi see point 52 yeah 800 in rent yeah at 90 i think it was 94 percent i came up with an noi of 1.9 uh that's not noi though ryan's coming up with the 1.9 noi okay ryan you want to tell everybody how you did that 352 times so i had 351 units i think she said the average rent was 800. yeah times 12 times what 90 90. let me do if i did 90 i think i gave it no give it 90 it's not 95. they got so much new product in arizona guys don't like you can write to 95 later right you in the beginning uh the deal we're doing in houston right now i'm writing at 88 effective rents meaning i collect 88 pennies of the dollar i should have gotten because of concessions problems situations okay okay three let me see so i'm gonna take 352 times 800 times 12 that means i'm fully collected okay every person paid me 3.379 million dollars times 12 no times 90 percent times 90 uh 90 okay three million three million zero four one and forty one thousand dollars and then they said their annualized rents are 4.2 million okay could be okay i'll throw in some other i think that that's a little high they always say it's hot i got other income other income typically on a deal this big is going to be about three or four percent not five on these older deals plus other income oh i and again we're going to spend three days in july going over all this and every time unlike the zoom calls every time someone has a question a hand in the room goes up and then we know hey let's go address that so four percent is 121. so maybe another 120 000 and there might not be that much other income on this thing there could be more than that they're doing laundry like the old laundry mats and the old you know today we don't do all that stuff typically we're buying apartments the the the washer and dryers in the unit you're not collecting quarters but you are collecting 50 bucks for vip parking [Music] and we're collecting you know uh 500 a month for the little office live and work office setting or the little podcast room that we set up and somebody wants to rent privately once a week okay so now now i'm at yes so you're at three one six three three one six three and then and then expenses we're going to take 55 no you think not not there i think expenses are 45 yeah yeah okay ryan wants to take 45 for expenses and leave 55 for the for the house so 1740. is is that the noi yep the noi yep one seven four zero yeah so you took my expenses out yep okay so uh and my my payments are going to be 1 million 80 000 a year that's my interest payment only interest only i did an interest-only loan and i'm gonna make 660 thousand dollars would i put down 10 million 10 million yep and i'm making six percent of my money and it's six percent of my money i want to go buy a different asset class okay for six percent i'm just telling you i would not buy that deal i would buy something nicer that needs less work i don't think they're going to get the number that you're saying that you underwrote to i think you're being a little aggressive or maybe they do maybe they actually kill somebody let me tell you what what could happen here somebody in california could have a 1031 they could have 30 million dollars worth of profit and they're like let's go bury this in the desert in phoenix and because they don't want to pay they don't want to pay the gains on the 30 million and they're looking at 126 per unit as relatively cheap but i just want you i know you know what that deal looks like right i want you to compare that deal to this deal if you were going to earn six percent do you want to be in this deal i'm showing right now or the deal you're looking at in your deal that that's it's the same six percent for everybody watching right now like same six percent same tax deductions same income less headaches no problems no threat no recourse no like some of you i know you guys want to do it yourself in real estate you do nothing by yourself just for everybody to understand this very important point real estate is a game you cannot play without partners okay the partners in every deal i do number one partner is the tenant i mean really before that i got to have the the seller's got to be my partner the seller's going to sell to me we also have to partner i got a tenant i got the debt the debt is the big this is this is the biggest number one partner number two partner is the debt i need a tenant a floating tenant that's going to change all the time be changing if i can keep 50 of these people every year i'm freaking shocked okay like if i can keep 60 cool but most of that's moving it's a moving infinite flow of people coming in and out okay saying good and bad things about the property then i got the debt this debt i'm living with these guys till the end ten years from now it will be the same damn debt that i had the first day the whole time they're there when covid hit man my debt my debt was calling me before my tenants were the tenants didn't call us fannie mae called us y'all co freddie mac oh you guys all right over there over at cardone capital okay teachers credit union hey we'd like to come visit this week how are you guys doing you know they don't want to ask us they want to see us so the debt is your partner then you got your investors and this is the order this is the order order order of how you handle people first you handle the property that's the tenant then the debt than the investors so when kobe had hit first thing we did was we stopped the investor's cash flow we said hey cash flow's off the table man i got to take care of the property the tenant and the debt because if you don't take care of the property the tenant and the debt you're not going to have the property you're going to lose it now i've been through 35 years of doing this i've never lost a piece of property pick the right property take care of it take care of the tenant take care of your debt and you will always be able to take care of your investor hope you guys wrote that down okay next question katrina thank you for sending that deal if any of you want to send your deals to me i'd leave that deal alone number one number two at what point would i be interested in that deal okay because that's the other thing to say everything is a buy at some point okay where would i be willing to buy that deal katrina okay uh number one the first thing that i that i'd have to really understand about a glendale deal or any deal in phoenix any deal in houston any deal in atlanta is the location like do not compromise location in markets that are flat if it is flat and they don't have boundaries on both sides okay like this is a boundary it's a big boundary okay you know what boundary that is this is this is miami right here that's ocean right there called h2o and here's more ocean right here it's a bunch of swamp and and and between here and here is the only places you can build and you can't do this on the beach because that's all condos all a million dollar 400 000 units so i have barriers to entry okay i got big barriers to entry if i take california over here and i do california like this you're gonna see the same thing i got mountains right in the middle of this thing and i got h2o on this side so what it does it compresses that market and almost no matter what happens in that market the values just keep skyrocketing okay new york city same thing new york city will not be killed because of covet new york city in the next when they figure out their politics there people will pour back into new york city like you've never seen before just like after 9 11 property prices just went through the moon and they will go back there they'll go to the moon before dogecoin will okay so when you got bearish to entry you don't have those in glendale oh yeah but the indian reservation just south of that can never be built trust me the indians will sell that property they will unload the property the government will sell their property the u.s government will sell their wildlife parks when they need to um so it's already been discussed before so you're looking for barriers to entry bearers the entry might not be the geographics it may be the politics of the land like we're not building anything else ever again here for whatever reason okay all right the liberals tried that in a lot of markets and ended up inflating actually uh gentrifying as they call gentrifying they basically increase the prices of their property so much that the people that they try to protect can't afford the property price because they took the supply out of the market when the supply goes away the prices always go up all right so katrina i could find a place where that deal would be cool for me but it'd have to be more than a six percent return like if i couldn't earn 10 or 12 percent of my money on that deal uh i i don't i don't i don't think that it would be worth it and i don't know that you'd have an exit yeah i think go ahead no i'm just gonna say i backed into a five and a half that would give you somewhere above an eight cash on cash yeah and it was 31 million dollars yeah 31 million dollars now i started becoming interested but i still don't know what my exit is yeah and the fact that they only did half the property makes me suspect i know what they're doing there they're looking for an amateur investor to whack and i don't want that to be you i feel like they're doing what's a lady's name uh uh that did the tiger show this is like a carol baskin deal oh careful carol basket uh-huh okay fixed half of them and then whacked them you know they fixed half the units and then hey katrina so when you initially came in you said hey you know the broker didn't give me a price for everybody on this call when you guys call the brokers just make sure we always say what's the guidance pricing on this deal yeah expectation what's the expectation they should always give you a price you know you shouldn't the goal is to do less work not more work yeah and one thing you guys got to learn how to talk the language of these brokers okay like don't you know you call them say hey how much do they want for it that's not the correct question what's the expectation um what's the bov explaining to about so bov is the broker opinion of value yeah so the broker goes in there and says hey owner this is the value of the property they usually have a low a strike and then a high the strike price is what they're typically going after but these brokers they become really they become your your partners and your friends like you want to speak the language like grant was saying so that way they take you serious because a lot of these guys they have a lot of people calling them and they don't take a lot of people serious so knowing these uh uh knowing the vocabulary knowing the language is gonna help big very very important because it gives you credibility money is not credibility until you talk the language and then they're like oh wow okay he talks the language and he's credible let me just tell you most of the people that are buying real estate today don't actually have any money blackstone doesn't have money they have investors money they have tremendous credibility so much credibility they don't need the money the the market assumes that blackstone can come up with the money second thing menu wants to know have i ever sponsored a foreign person just so man you first of all this is a real estate show but yes i have yes i have foreign partners yes we have foreign licensees there's a lot of ways rather than me just making you employ for me to work with you but the first thing to do would be appropriate in the appropriate spots this is a real estate show asking questions about real estate so again keep your credibility up by communicating at the right time about the right topic because right now what is everybody talking about we're talking about real estate people are talking about deals okay um does the deal have to already be negotiated and under contract uh no but but you also don't want to call me like the calls we get i know a guy yeah bro we know a guy i had a guy stop me at starbucks the other day uh ryan won't call me back ryan won't call me nobody at your office will call me back i'm like yeah okay well it doesn't surprise me maybe what you're saying in the call uh has everything to do with why they're not calling you back well that's how i work i'm like don't sound like it work at all to me so i'm like you know the little shark dude which one anyway i see him at starbucks all the time and he's like i i know a guy i said dude what do you want to talk to ryan about maybe he's not calling you back because what you're telling him is a waste of his time man i know a guy that's got a portfolio in texas where in texas i don't know i said that's why he's not calling you back right there you don't know about the deal you know about a guy you're not doing this full-time you're an amateur you think you're going to get a little fee out of the deal brian's over here laughing right now we hear it every day every day it happens and it doesn't have to happen if you all know how to communicate and what the buyer wants i am a i am a net buyer real estate okay we will sell maybe one deal this year and try to buy 10. if i don't sell any deals i don't care i want to buy deals so we are we're we are positive uh bullish on buying deals and so all you guys got to do hey grant i got a deal i know what it takes to get it i have connection with the owner they know you they would sell to you okay and then i mean it's got to be something more than i know a guy because we already know a guy we probably know the deal we've probably seen the deal okay most of the time i get these calls too it's like hey there's a really amazing deal and there's no numbers there's no nothing behind it so it's like hey you know at least have the noi at least know the story behind the deal yeah and um if anybody wants to send us a deal that's real like a really really real deal it's deals at home deal deal at cardonecapital.com deals or deal andres both put them both both and how about deals or deal deals or deal either one will work dildo will not work okay uh ask to unmute jeff castell in texas okay uh and if you guys got a screamer man you guys didn't know about screamers man send me to screamers hey jeff you are unmuted but most you guys that have screamers are dreamers yes sir what's up jeff i've got i've got an hoa property that i'm involved in and the hoa is not doing very well it's failing really yes it's built yeah and uh the question i'm trying to determine i've owned this unit i've owned these 14 condominiums for probably now 20 years and uh i bought them very inexpensively like 30 000 dollars a door and they're worth probably 125 a door okay so it's about i mean i'm just giving the average size because they're probably it's 1.9 million worth of property i guess beautiful man so you got 540 000 all cash paid for done and the hoa is failing yeah the hoa is failing yeah how many how many how many units in the entire complex 60 units i own 20 percent of the hoa and and how many units do you have 30 of the 60 14. oh 14 okay 14 units okay 14 out of the 60. yeah my rent my rents on the things are on average 12.95 and that includes the water i've got to pay taxes and insurance and everything yeah but these have been paid for a long time yeah jeff what market are you in arlington texas yeah what i would do is i would try to put package the entire thing on one profit and loss statement i would advertise to one investor so you're 14 you're you're just going to basically create a profit and loss statement you're going to have 15 of them you're going to have you probably have a profit and loss statement for 14 you're going to make up one more follow me you're going to make one up profit and loss statement for 50 of number 15 profit and loss statement number 15 is all the units together so you're going to take the 1295 rental income times 14 units is it 14 or 15 what'd you say 14 14 times 1295 times 12 oh that was wrong 14 let me see 14 times 1295. it's 18 130 yeah times 12. okay as well as 217 560. yeah and then you you probably you you know whatever your water costs you probably don't have any expenses i mean are these long-term tenants uh they're all one-year tenants typically yeah so the whole place is full your expenses because you're doing it yourself are probably 40 000 bucks a year or something they're probably nothing no the hma bill every there's hoa bills that i've got to pay okay um and so they're 43 800 okay my um special assessments on that are seven thousand okay there's 50 grand pretty much got it i'm adding them up what else you got and my taxes are 45 000 and texas i'm i pay my my company basically uh a 25 000 for property yeah you're not going to show them that because that's that's between you you and your company right right so now you're yeah now you're an oil on this deal if i got everything i think you had water in there too you got an no i want included in the hoa okay good so you got a 102 we got a 122 000 noi where are you in arlington i'm gonna go a five cap i'm gonna go a four and three quarters cap and would you be happy to get 2.6 million dollars for the property oh absolutely i'd sell it in a moment yeah and they're going to make nine percent of their money so i'm going to advertise guys i have a 9 this is going to give you a 9 cash on cash return um the hoa the hoa fees are handled the management's handled the properties are full you even could do this you could even take and rehab one property spend four thousand bucks on one unit okay take just one of the one unit one special unit spend five thousand dollars on it and change the rents by 500 because it's got a backsplash and new floors and really cool and tell the story hey by the way this is the actual over here this is the actual actual actual the 122 but if you did that 500 increase to each unit 14 times 500 it would increase times 12. it would increase your noi by 84 000 and we've already proven that every unit we have done this to has taken the price increase on the chin happily and they'll be like i'm gonna make a fortune here but the only way this works man is get them off of one financial statement get them off of 14 separates put it on one financial statement and you go for you go for a professional investor like a chiropractor or a chiropractor dentist uh brandon my partner brandon some some guy that's got some other job that now thinks because grant cardone makes real estate look so simple it must be simple but he wants to do it by himself but i'm gonna do it by myself because i am a by myself kind of guy i gotta control everything guys and and that cap rate uh the 122 is based herald on a four and three-quarters cap rate in arlington i think you get it arlington virginia yeah arlington texas oh texas for good hot market man supermarket and really what's going to make the difference in this deal is how you guys advertise you could advertise the guy that could buy this could be a a 1031 exchange out of cali man this thing might bring 3.2 million right now and he'll regret ever buying it from you just like you regret owning it see this goes back to the gentleman that was just on from texas the owner economics and motivation his cost basis is called cost basis his cost basis is which exactly what he started with he started telling me about what he paid for the property right didn't he tell me that he did yeah i think it was what what was it jerry 30 grand yeah is that jerry gone you dumped him uh uh johnny why you jumped my guy man my guy i'm showing my guy how to make money johnny why you dumped my guy 30k per door yeah 30k per door right this is called cost basis right this is called the owner's economics all jerry's thinking about is his economics and it's really not the right way to think about a deal you want to think about a deal not what your cost is but what the market with the new buyer this what's called the exit i spent probably a third of the program it uh the the program that you guys have uh how to create wealth investing in real estate on the exit how do you figure your exit out because this guy's not thinking about what you're making now now the last thing you need to tie into this is the basically the cost per unit you know if you got 2.6 million divided by 14 you know uh cause he's gonna this guy's gonna check that so divided by 14. it's 185. so it's 185 a door i don't know if it can bring that you're going to see the other condos in your in your in your building you know because that's why i hate condo buildings because you got a guy next to you that's willing to sell for 1 30 right now yep yeah i think it's probably worth max 140 a door 145 a door uh but i do have another one that i'm working on let me just say this jerry jerry that investor is not going to look at that guy because he don't want one nobody wants one condo in that building people want 15 14 of them because now he's like i got 14 checks coming in every month right see investors want something different than owners so when he's like you're you're uh you're uh you're 40 000 higher than the guy down the street yeah bro you ought to go buy the guy down below me once you buy my 14 you are to go buy him because you know you know and this is where you guys have to learn how to negotiate he's like that guy's selling for 140. buy that too you're stealing it right but by itself it's not worth having now you got 15 units his goal really should be to own the whole building good point because once you own the building you get rid of the hoa because your only problem with that building is a failing hoa and all hoas fail every one of them fail there's no successful hoa in in in the world today they all end up failing once the owner gives it over to the new owners to decide what they should do with the building the decision will always be let's let's this place up as fast as we can yeah because everybody has no money and nobody cares about this or that and they want you to spend the money on it because i'm the majority owner but you know what i'm just i'm paying the same thing everybody else's paying i was having this conversation with a guy last night he's buying a deal over here and he's like oh they take care of this and they take care of that and they take care of this i said yeah until you got to they don't right okay they'll take care of you eventually oh my god the amenities are amazing here yeah wait till they get rid of them why would they do that man that's what they're selling me trust me they will get rid of everything the espresso machine will go okay the butler will go okay the good morning nice to see you here that will be gone soon on these calls you should have a buy sell button what button would you hit right now right now i would be well from the advice oh i would definitely sell this get rid of this jerry you don't need this you know you don't need it like you paid 30 grand a door man go ahead and pick up your would you pay a door 30 30 pick up 100 each door pick up pick up pick up 40 grand a door move on like i'm giving you a great place to start from the story just gets better and better as you drop the price the story to the exit goes it gets even better but at least i showed you a way to get out but do not try to do these one at a time anybody out there any of you out there wow i love this i love that johnny how do you do that jenny how you doing that i gave him three ways johnny and you yeah yeah okay so you guys are trying to soak all this in in one show do not try to do that okay don't try to get all this in one show i didn't and you can't it's impossible if you try to do that you'll quit this game so just let me hit you every week with it let me hit you every week with it your job now is to go back to the program how to create wealth investing in real estate and keep listening to me you should have me in your ear all the time you don't need to be on clubhouse or green room right now you don't need to be watching instagram lives you need to be learning about real estate let all those other people give advice on clubhouse okay look you just need to be in there learning the whole vibe over and over that's what i did okay i didn't really pays off is you have these questions that you ask the brokers there's like 15 questions that you go through yeah hey when's the last time i traded who's the seller tell me about the debt tell me about the deal tell me about all that stuff that list alone is worth its weight in gold and make sure you send your deals deal or deals at grantcardone.com send your deal ryan will see it i'll see it andres will see it my team will see it i'll make sure uh uh i can uh uh bring it uh bring it up um uh next week on the call what you're doing in these calls each week is preparing yourself for the july summit make sure many of you many of you have not confirmed that you're coming live we are going to sell uh oversell the live seats so if you want to be here you want to meet investors you want to meet some of our surprise guests you want to meet me you want to ask your questions in public you want to meet investors you want to meet lenders all those people will be at this event it's going to be phenomenal i do the nicest events in the world they're very high class um they're you're going to feel great you're going to be around unbelievable people super positive great networking event deals from around the world you're going to see how people are looking at deals how they're accessing deals how they're getting deals you're going to hear about people's mistakes but most important you're going to be putting yourself next to professional real estate investors and the best way fastest way to become a professional whether it's golf basketball baseball dancing the best way to become a professional is to mingle with professionals okay so my preferences for you got to be you guys to be here live if you can travel come out come be there i look forward to meeting you i want to hear about your deals it's an amazing masterminding event proximity is power miami's going to be fantastic we do great events we'll put on a phenomenal event for you and i want to meet you guys all right okay your homework this week take where you live under right where you live whether it's the house the condo or the apartment underwrite the building that you're in you don't need to even leave underwrite your house if you live in a house underwrite it if your house is paid for underwrite the equity in your house what is the return on the house that you have right now okay if you live in a house is 200 000 and that house is paid for underwrite the cost of living in that house okay if you rent something for two thousand dollars a month right now and you're renting under right the building you're in okay under right find out everything you can about both these situations this is paid for this is a house that's paid for and you guys think oh my god my house is paid for well so what it ain't paid for because you got 200 000 worth of equity sitting dead in a house dying it's like you got 200 000 benjamin franklin sitting in a damn house that don't even work for you anymore because those this should be paying you at least 12 000 bucks a year instead you're feeding it probably 25 000 bucks a year or i don't know maybe 15 000 bucks a year you're feeding it rather than feeding you so i want you to underwrite where you live today underwrite where you rent today and then i want you to compare it to other options that's your homework underwrite where you live or where you rent and compare to other options that your money could be taking advantage of in the marketplace each week i'm going to do this for you okay each week we're going to talk about real estate your real estate are you going to pay for it or is it going to pay you i want to show you how to get real estate to pay you you're not you're probably not going to get in the food business and you're probably not going to get in the water business but with real estate you don't have a choice in real estate you're either going to own it and use it to make you money or you're going to live in it or work in it and it's going to use you and make money on you thanks for joining today i'll see you next week [Music] you

Channel: Grant Cardone

Views: 48,741

Keywords: grantcardone, grant cardone, 10x, money, finance, business, sales, motivation, yt:cc=on, WeAre10X, 10XNation, 10XStrong, 10XLife, 10XEverything, real estate, real estate investing, investing in real estate, income, cash flow, apartments, single family, commercial real estate, section 8, housing, homes, owning a house, renting, rent

Id: UK11mD3bdSw

Length: 95min 5sec (5705 seconds)

Published: Mon Jun 21 2021