Grant Cardone Says Don't Invest Until You have $100k

Hoboken, NJ · Member since 2016 · 15 posts · 4 votes

I have been listening to Grant Cardone's podcasts and watching his youtube videos after hearing him on show 108 of the BP Podcast. He says that you should not invest in real estate and do your first deal until you $100k to invest.

Before I started listening to Grant I was looking at a few multi family deals for around $200k but he now has me second guessing if this is the right choice. As I'm sure all of you know, he is an extremely successful real estate investor so it is hard to totally ignore his investing concepts and suggestions. I know a lot of you here on BP started with significantly less than $100k so I would like to hear what some of your thoughts are. Would you invest in your first deal if you only had $20k or would you wait until you $100k?

2 Reply

148 views

Most Popular Reply

Daren H.

Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes

10y

Some people will tell you to save $100K before you start, some will tell you that you don't need any money to start, some people will tell you give them your money and they will help you start, some people will tell you to pay off all debt first and so on and so on. I try to stay away from broad generalizations. I say you invest when your preparation and the right opportunity meet. That might be at $10K savings, $20K savings, $50K savings, or $75k savings.

17 Reply

See this reply in the discussion

30 Replies

Jump to latestLatest

Sort by

Josh L.
Round Rock, TX · Member since 2016 · 11 posts · 6 votes
10y
Following this thread. I've been thinking a lot about this lately as I am currently saving for a first rental purchase, and the best answer I can find so far is 'it depends on which market you are in'.
1 Reply
Darren Budahn
Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
10y
If you can find a property below market and have adequate reserves and have no other avenue to achieve a greater return on your money, why wait?
8 Reply
Tyler Amburgy
Rental Property Investor · Gallatin, TN · Member since 2016 · 39 posts · 29 votes
10y
There is no reason to wait. Grant is a very successful business person and investor but he gets a lot of his investment money from his other businesses. Starting with whatever deal you can get into now will jump start you to building wealth in this industry. Don't put it off by waiting till you have more money.
6 Reply
Account Closed
Rental Property Investor · North Conway, NH · Member since 2016 · 69 posts · 16 votes
10y
I would buy as soon as you feel comfortable. Not investing until you have $100,000 seems a little slow. What if you work a low paying job? Are you supposed to just stash away in your savings for however long it may take?
3 Reply
Daren H.
Real Estate Investor · Desoto, TX · Member since 2013 · 560 posts · 528 votes
10y
Some people will tell you to save $100K before you start, some will tell you that you don't need any money to start, some people will tell you give them your money and they will help you start, some people will tell you to pay off all debt first and so on and so on. I try to stay away from broad generalizations. I say you invest when your preparation and the right opportunity meet. That might be at $10K savings, $20K savings, $50K savings, or $75k savings.
17 Reply
Ben Seitz
Washington, PA · Member since 2016 · 36 posts · 10 votes
10y
I agree with above noted. Everybody will have there own opinion. You don't have to pick one but maybe learn the tactics from each strategy. I first started wanted to buy a duplex or triplex. But money down plus improvements I wouldn't be there for a while. I just found a fsbo for 28500 that needs no work and can be a 2% deal. I'm thinking its a perfect first deal to get my feet wet and learn from but not diving off the deep end at the same time. It would easily be liquid able for its mv is a lot higher than purchase price. So I'm pretty dead set on this and I'm looking forward to it. I hope this helps. No matter how big or small the deal. Buy it right and you'll be off to the races. Good luck and don't over analyze.
1 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
10y
I can understand why Grant would say that.
However, I must agree with the other posters here: when it all comes together, go with your gut.
Ready - FIRE! - THEN aim!
Otherwise, you'll procrastinate and continue to find reasons to do so until you find yourself in your later years wondering why you never got started and everyone else passed you up.
5 Reply
Matthew Jones
Moreno Valley, CA · Member since 2015 · 14 posts · 7 votes
10y
Originally posted by @Daren H.:

Some people will tell you to save $100K before you start, some will tell you that you don't need any money to start, some people will tell you give them your money and they will help you start, some people will tell you to pay off all debt first and so on and so on. I try to stay away from broad generalizations. I say you invest when your preparation and the right opportunity meet. That might be at $10K savings, $20K savings, $50K savings, or $75k savings.
Great answer to this question
2 Reply
Brent Coombs
Investor · Cleveland, OH · Member since 2015 · 6k+ posts · 2k+ votes
10y
@Tom Pignatello, regarding your SPECIFIC circumstances, I reckon $20k IS too little to be looking at that $200k property. But, $20k would do nicely if you find a duplex under $80k with great ROI!
You going to let a $75k duplex go begging, just because you haven't saved $100k yet? My 2c...
2 Reply
Colton Cook
Contractor · College Station, TX · Member since 2015 · 113 posts · 38 votes
10y
In my opinion, it fluctuates with your risk propensity. If you are risk adverse, save some more. If not, find the deal then you'll find the money. Just my thoughts on it. Especially if you're young, you'll have to risk a bit more.
1 Reply
Ryan Dossey
Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
10y
Grant Cardone also just pushed a "Hurricane Mathew" sale. Literally attempting to drive profits from an event that killed 1,000 + Human being in Haiti. What a tool.
1 Reply
Robert S.
Contractor · Milltown, NJ · Member since 2016 · 297 posts · 213 votes
10y
This is based strictly on the initial post and other posts in this thread, not the mentioned podcasts or that particular podcast creators ideas as I have not listened to them. Saving $100k is a tall order. Having access to $100k is a much easier concept for someone to wrap their head around. I would think that anyone getting started in real estate should not get started until they have access to $100k. To do that in modern day America, even for someone from a lower income bracket is manageable. It requires discipline, whether it be saving diligently and/or getting your credit score in order. When a person accomplishes those things, they show prospective lenders they are serious about investing in real estate and are preparing themselves to do so.
0 Reply
Dave VisayaPro Member
Moderator
Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
10y
There is actually a book called Investing with no and low money down ;) http://biggerpockets.com/nomoney
0 Reply
Rosston Smith
Investor · Warner Robins, GA · Member since 2015 · 1k+ posts · 490 votes
10y
Yeah I love Grant, but don't listen to everything he says.

Take what everyone says with a grain of salt. No one is in your shoes right now.

The numbers are the numbers. I paid $4700, and have already received half that after two months of living in my propertt and live for free.

I didn't need 100k for that.
5 Reply
Dedric Polite
Investor · Burlington, NC · Member since 2016 · 81 posts · 25 votes
9y
Don't wait until you have $100K to invest in real estate. Grant Cardone is a very good salesman and reports to own over $500 mln in real estate, but his focus is on buying large multi-unit apartment buildings, so in that game, you can't even get someone to return your phone call if you have less than $100K to invest. Start small like 99% of people do with a duplex, triplex. I bought my 3 unit triplex in 2007 with $0 down (banks don't offer this type of financing anymore) and 100% financed. I was scared to death! I lived in one unit renovated then rented out the other 2 units. I've had months where I lost money (meaning spent more than I had) but many more months where I made money. Now, almost 10 years later, the property cash flows $2,300/month.
4 Reply
Justin Fox
Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
9y
I would advise that you have the 20-25% down and 6 months of vacancy up front in any deal. If you're wanting to invest in a $320,000 - $360,000 MF property, sure wait until you have $100,000 saved up.
2 Reply
JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
9y
Who's Grant Cardone?
OK, I know that's getting to be my running punchline, but I think it apropos. What if you are investing in Manhattan or SF? That might not even be your 20% down payment. What if you are investing in Milwaukee or Detroit? You might be buying 3 or 4 houses for that money. Point being that no one can tell you if your investing strategy is right for you, and your particular situation, except for you. People can give you tips, pointers, and ideas, but what works for Grant Cardone may have zero applicability to you, and vice versa.
Make a plan and work it. Listen to what gurus say and then do your own thing anyway, but see the previous sentence first.
Podcast Guest on Show #243
Skyline Properties
View Page
2 Reply
Joel Florek
Rental Property Investor · Michigan City, IN · Member since 2015 · 530 posts · 741 votes
9y
Don't wait. He uses real estate as a way to preserve wealth and provide consistent returns from his other businesses. He is in the large multi family game which is easier and less risky when you have lots of cash to invest. Take everyone's investing advice with a grain of salt and make your own decisions. I was able to get to 20 units in 10 months with only $5k of my own money and cash flow $2.5k a month right now. Even if I never cash flowed well with my strategy I will have paid down $250k in principle by the time I could have saved $100k from my day job. I would say don't wait! Every day you wait is another day you are putting off getting your hands on real estate education that will teach you so, so, so much!
4 Reply
Steve OlsonPro Member
Real Estate Agent · Pleasant Grove UT and Hurst, TX · Member since 2014 · 128 posts · 63 votes
9y
Some good points in this thread and to a large degree this is a matter of your personal comfort level. I think it's less about the actual amount of 100k, and more about the fact that you need to have reserves above and beyond down payments, closing costs, etc. Squeaking into an investment is asking for trouble. You have got to have reserves. I work with a lot of investors and it seems like the ones who squeak in are problem magnets. Anything that can go wrong does. You get in trouble investing in real estate because you HAVE to do something. You HAVE to sell this month. You HAVE to have the income from the rental, etc. If you have adequate reserves and a cushion (100k, 50k, whatever), you don't HAVE to do anything. You can be patient and make decisions based on the market...not a temporary personal financial problem.
2 Reply
Nick Sandoval
Rental Property Investor · Sacramento, CA · Member since 2016 · 40 posts · 38 votes
9y
I was in a similar situation about a year ago. I thought that I needed 100k to start investing and as a full time engineer that meant I would reach my savings goal in 5yrs (2020). Instead I went outside the state (CA), "think outside the box think outside the state". I actually invested in Cleveland and now own a SFR with about 15% ROI. Ironically investing wisely in real estate is helping my savings exponentially. My opinion: Do not wait until you reach 100K. Increase your knowledge and take action!
5 Reply
Mike H.
Rental Property Investor · Manteno, IL · Member since 2009 · 2k+ posts · 2k+ votes
9y
Keep in mind. These "gurus" all have an ulterior motive. And that motive is typically all about how to make them more money off you. They all come up with their own "hook" and then they stick with it. But whats it really based on? If you go back and listen to all the BP podcasts of the successful investors on there and try to guess how many you think had 100k or more before they started investing, I'd venture a guess that you'd be at more than half the people started with less than that amount.

That 100k number is so arbitrary, its just nonsensical. But if you are concerned because you're a big-time devotee of cardone's, then put it thru the smell test. Its his number so he had better have a breakdown of the logic as to why you need that much money before you invest. Go thru it and if you agree with his logic then wait. If not, then go forward.

Quite honestly, if I had 100k in the bank when I started, I probably would have never started in the first place. :-)

I started with 43k (HELOC). Haven't done any flips since I started buy and hold about 8 or 9 years ago. And am now at 60 houses (closing on #61 in a couple of weeks). But If I would have waited til I could get to 100k, I'd have zero rentals today. Thats a simple fact.

I was making over 80k a year with a wife and a kid and there's no way I would have been able to save 10k a year. Wasn't going to happen. So had I listened to Grant as some huge fan, I'd still be buying his books as we speak but I wouldn't own a thing.

Silliness is silliness. And some of these gurus are just full of it. :-)

8 Reply
Kristopher HanksPro Member
Rental Property Investor · Davenport, FL · Member since 2016 · 593 posts · 382 votes
9y
@Tom Pignatello I have over $100k and I have just started putting in offers for rental properties. That was not by design. I would have liked to start sooner but my FULL+ time J.O.B. was getting in the way. I have made the time to get it done now. I saw the potential for return on my money in real estate compared to every other investment I have been in and I could not wait any longer. Time is money and money likes to compound when it is invested properly. If I told you that I have an investment that will NET you 15% per year and all you needed was to put in $20,000 would you wait until you had $100k to get into the investment? I would hope that your answer is no.
1 Reply
Linda LabbePro Member
Investor · North Bay, Ontario · Member since 2015 · 709 posts · 263 votes
9y
we started with no nest egg since we spent 40k on learning packages not sorry we did but we do try and prevent others from doing the same... but with 14 closes in the last 4 months money is not the the driving forces creativity is...Its not what you have its how you use the resources that you have that is the deciding factor...love chatting and am always looking for new contacts
1 Reply
Max Householder
Rental Property Investor · Saint Louis, MO · Member since 2014 · 313 posts · 326 votes
9y
I listen to another podcast called The Wealthsteading Podcast hosted by a guy who is the founder and money manager of his own investment advisory firm. He says you should first become an earner and learn how to grow your earnings over time, then become a saver and learn how to save much more than you spend, then once you've mastered those two pillars of wealth you should move on to becoming an investor.
Now his focus is stocks, not REI, but I think the logic is sound. You're not an investor if you put the first $100 you're able to save beyond your expenses and put it into a Vanguard index fund. Even if you earn a 20% return, you're talking about $20 and with the risk of losing that money. You need to first save up enough buffer to weather household emergencies, car repair, job loss etc. Worry about the return OF your capital, not the return ON it. When that savings pile gets big enough that you have excess beyond your emergency reserves, then start focusing on how to earn a return on it through REI, stocks, whatever.
Whether that excess needs to be $5000 for marketing as a wholesaler or $25,000 for a downpayment on a $100k duplex or $50,000 for a downpayment on a $200,000 quad is up to you and your market and your goals, but I think the message of save before you invest is a very sound one.
Telling someone "just get started!" is fine if it means get started learning, reading, listening, networking, etc. but you shouldn't take your ONLY $20,000 and invest it into a property if then a $500 car repair the next month will put your household in the red.
2 Reply
David O
Investor · Detroit, MI · Member since 2012 · 119 posts · 64 votes
9y
Don't invest until you have 100K? Thats hilarious. Most people will never be able to save 100K in their life. I guess it depends on the area, but I would say invest as soon as you can if you are willing to take the risk. I started with 10K and credit card debt.
2 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.