Grant Cardone - multifamily only

18 Replies

My brother and sister in law are realtors in Nj and they spoke about the impact Grant Cardone had on them. So I started looking into his methods and strategy. I came across a video where he discusses never to look for a single family home for initial investment. He stated that as new investors should be looking at multifamily units immediately so that you aren't relying on just one door. He also states that we should not restrict our property search based on what we "think" our budget is.

I guess my question is for more seasoned investors, how do you feel about this advice? If you don't agree with it, what would you recommend to a new investor who hasn't really established any connections or made a stamp in the REI world?

I'm a newbie myself & still learning . I've listen his podcast on BP, watch some his youtube vids & all i can say personally is that I like Grant's methods & advice. The guy is awesome & know his stuff!! I like that He says " chase the deal, not the money" because if u have a great deal, you will get the money!!

Hello @Shautauqua Downs

While starting out in multi family can lead to certain advantages. Multi family is much more capital intensive with stricter lending requirements. Also lenders will look at your experience to determine whether they should lend. I recalled Cardone started out in single family got a tenant in then one day the tenant moved out. But then he got into multi family and everything turned out okay. At that time when he made the switch prices weren't that high compared to now. Also multi family value depends on the cash flow while single family depend mainly on population, job growth, supply/demand. Single family has more liquidity and buyers compared to multi family. Multi family is easier to scale/manage than single family. If you're just starting out, best way is to build your reputation. A good reputation goes a long way. Start from the bottom to the top. If it takes time to build a small multi family portfolio, then it will take time. There's no right or wrong answer. Be committed, determined, and hungry. You'll find the same success as Cardone has.

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Right off the bat: All of the following is thanks to Brandon & Josh, whom I wish I had discovered waaaay earlier in life. That said, I enjoy, like millions others, Grant Cardone's street smart and straight forward no BS attitude. It might take a while for some people, but he cuts to the chase and says it like it is. He also challenges anyone to think way bigger than many of us here on (awesome) Bigger Pockets or elsewhere.

This doesn't mean anyone needs to do real estate, or life for that matter, the same way he does (check out his plethora of work). But who doesn't like his jet-set life-style and penthouse and all?!? I do respect his courage and common sense in most of his messages. And let's face it, he's rich, successful not the ugliest dude in the shed and is somehow really kinda cool ;-) Somewhat of a modern day, rich, self-made James Bond.

Let's not forget about his beautiful wife Elena who has enough smarts to know when not to get into an ego frenzy when 'The Don' is speaking ;-) Check out their G&E Show to get what I mean ;-)

But I'll also say this: Even though I am still learning and applying SFR strategies, which by the way, can finance not only your life in the meantime but also pave the way to your bigger game- the Multi-family end game.

You'll hear it from many, such as @MichaelBlank whom I discovered here on BP, who I have come to respect and learn from. I read his blogs and listen to his podcast in he's my go to man on all things multiplex. My conclusion: "Faster scaling and huge leverage is the main differentiator between SFR and Multi-Family real estate investing".

Michael and Peter Harris (with his Commercial Real Estate Advisors blog and podcast), who is not on this channel as far as I know, encourage us to get out of our low to middle class thinking and jump right into scale. Cordon goes a step further and energizes to think 10X. Why not? Who says we need to start with one house on the Monopoly board? If you're smart, you can realize the leverage that more doors bring to the table right from the get go. But again, real estate is not quite as simple as the game we all love. Therefore everyone needs to manage their learning curve and fear or comfort zone. Speaking of games, everyone here will mention Robert T. Kiyosaki - a must read book and must play game "The Cashlow Quadrant". My son beat us all at it - age 8. No preconceptions are a plus. Yes, he will be a millionaire in his twenties - for sure.

There is a ton of information to learn from in this day and online age for free or for cheap - like here on this channel in the Education tab. So start with your own pace and gain speed as you go. Never stop learning. Play your own music. It's a vast and fun universe.

"It takes a village to raise a child.", and so is it with real estate. Welcome to 'Village Bigger Pockets' :-)

Be awesome! - Ken ;-)

For new investors limiting yourself is a bad idea. Whether you buy a multifamily or SFH is irrelevant as long as it's a good deal. Why would you limit yourself? I can't imagine finding a homerun SFH and passing on it because some guy said I should be buying multis.

There's positives and negatives to any investment strategy, if you buy right the rest will take care of itself. 

I do think Grant Cardone is very talented. He can take 2 words (try hard) and make it into an entire book.

@Shautauqua Downs

I have read 4 of Grant Cardone's books. I really do like what he says.

A lot of people do not treat their lives as a business and do not focus on the revenue, income, and sales. It was like a light turned on in my head when I read his book Sell or be Sold. Sales are everything in real estate, in success, and everywhere in life.

I watched the same video you watched and I agree with what he says. He even says that if you are a new investor and you can't afford to invest in a 16+ unit apartment complex, start with a 2-4 unit, fix it up, and use the equity to keep upgrading until you are able to go bigger (essentially BRRR).

Originally posted by @Anthony D. :
I'm a newbie myself & still learning . I've listen his podcast on BP, watch some his youtube vids & all i can say personally is that I like Grant's methods & advice. The guy is awesome & know his stuff!! I like that He says " chase the deal, not the money" because if u have a great deal, you will get the money!!

 If you enjoyed his podcast, I strongly suggest that you pick up one of his books. He is very intense and focused on his goals, a quality that I greatly admire.

Thanks everyone for their honest responses!

@Anthony Gayden I actually was about to do some research on BRRR strategy. Maybe doing as you suggested and looking into duplex's etc may be my middle ground.

I'm happy to know I'm not the only one attracted to Grant's no bs attitude. To me it's motivating.

@Anthony Gayden Thanks for the advice, I will definately get a few of his books soon, just been reading other books & got other things Im working on.  I think he is very inspiring, full of motivation  & great to listen to so i will be learning as much as i can from his books as I progress.

I really enjoy Grant's videos/podcasts and message overall. He is extremely fast talking however, and I think you had better know at least some terms to start listening, or you'll get lost. That being said, the more he describes the larger complexes and the advantages they bring, the more it makes sense. Especially when you can raise up that NOI and get some refinancing going. The reality is that that's harder the smaller you go. Its hard to raise the NOI on a 6 unit enough to cash out refi all your money in the deal. If you have a 60 unit, that is much more attainable because your small changes can have effects on 60 units. Even if you can raise the rents $20/month. On that 6 unit that only gets you $120/month. If you have 60 units, that same $20 gets you $1,200! That scale right there will be much quicker at getting the attention of the banks when you want to pull out some money for your next deal/make your investors happier.

The issue I see, is that all his videos talk about his current 200+ deals.  Which is extremely overwhelming when you're looking at 4 or 16 units even, because then even your 16 units look small and irrelevant. 

But he does say "why buy 4 units? If you can buy 4 units, you can buy 16 units.  If you don't understand 16 units, you shouldn't be buying 4 units, cuz they're the same to operate.  So just learn and learn until you can buy 16 units!"

So, I think its best to listen and absorb, and try your best to apply his principles to the largest deal you can afford, and let that deal make you as much money as it possibly can.  And eventually who knows, maybe we'll all be buying 200+ units!

Personally I wouldn't buy anything that has less the 4 doors but it's a personal niche. There's no right or wrong when it comes to SFR or multifamily units. It's best to just pick one niche and become an expert in it, then as you gain experience venture off into other niches. You decide your path, but master the path you take. I'll be moving back to NYC and would love to meet your Realtor cousins, check pm.

@Ken Breeze  I agree with you, but how about making mistakes? If you own a smaller property, your mistakes are smaller. Surely, you can start big and 10X it, yet even uncle G consciously contradicts himself sometimes saying that you have to start somewhere, referring to small multifamily. I am a newbie myself and still trying to figure out what`s the best solution here. So I am gradually coming to realization that if scaling right away, be ready to scale your mistakes as well.

@Account Closed Taking the Cardone vs. Not Cardone logic out of this there are ways that multifamily (even small apartments) can help with your mistakes. If you have a 5-unit (still qualifying as a commercial apartment property) you can probably service the debt and pay your property taxes, etc. with the rent from 4 of the units. So if you "mess up" advertising and renting the property and it takes 3 months instead of 1 month...you've broken even. Juxtapose that with having an SFR, if you make that same mistake you don't have 4 other (small) streams of income to make up for the one that's missing. Your "mess up" around re-renting a unit costs you 100% of your gross rents. You will go cash-flow negative and spend time having to rebuild your reserves. Once you've made that hypothetical mistake with 1 out of 5 units you're less likely to make it with the subsequent 4 units.

Now, if you buy a property with a roof that needs to be replaced, well either way you're in trouble. If you overpay for a property, either way you're in trouble. So when you're talking about GIANT mistakes it might hurt a little more with an apartment but either way it's going to hurt a lot. With the small mistakes it just plain hurts less when multiunits. If you need to repaint and use a bad contractor or handyman it's for a 2/1 apartment, not a 3/2 SFR. So if you're overcharged by 20% it's 20% of a smaller bill in the case of an apartment.

All of that aside, I'm biased, I invest and like multiunits.  There's enough cash-flow there to "matter" to me on a property-by-property basis.  I'm grizzled and elderly compared to many on hear and the $100/month cash-flow target that some people have just doesn't move the needle for me.  The property is still a "thing" that needs some amount of attention.  And 20 SFRs need far more attention than a single 20 unit apartment building.  So, for me, the "thing" (in my case, the apartment building) has to be sizeable enough (either units, gross rents, etc.) to matter or it doesn't make sense.

The last paragraph is just so you understand my biases and how they might lead into my perspective in the first two paragraphs :-)  

I think you should start with single family unless you are looking to place 200k plus.

GC is a marketer first and foremost. He has a giant reach and is looking for accredited investors. I have not look at any of his investment packages. All I know is when you look around the room and see yourself investing with unsophisticated accrediteds... look out.

@Shautauqua Downs thanks for starting this post! I had the same questions about being a newbie and learning a lot from GC. I'm considering starting with a househack 4plex when I graduate and then saving for a few years to try and get into a 16 unit. We'll see, I'd hate to build capital for a couple of years and lack real estate credibility because I tried to go big on my first solely rental property. Still figuring it out. Joe Fairless,  best real estate advice ever podcast, recently had an episode about partnering or going solo for multifamilies. 

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