Middle ground between Grant Cardone and BP
Rental Property Investor · Boston, MA · Member since 2017 · 241 posts · 135 votes
Middle ground between Grant Cardone and BP
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Investor · Kansas City, MO · Member since 2017 · 791 posts · 1k+ votes
9yFind your path.
I ended up in somewhat of a hybrid, but probably closer to the BP side and went to 141 units in 7 years, and adding more next month (7.25 years). I started with regular deals and they kept growing in size.
GC and his book the 10X rule has some good stuff, but stuff I don't like/agree with either. If you go all in on what he's saying there's a good chance you end up like this example in the book The Subtle Art of Not Giving a F$*k:
"It’s true, caring is what’s got us all f$*ked up. We care about the wrong damn things. For example, in the book, Mark talks about a guitar player who got fired from his original band. The guitarist vowed to become a rock legend. He filled stadiums, sold millions of records and won numerous awards. Yet, later in his life, when he was interviewed, he tearfully claimed his life was a failure.
That guitarist was Dave Mustane from Megadeth and the band who fired him was Metallica. Although to you and I, Megadeth was a huge success, to Dave, they were never Metallica. See, Dave gives a f$*k about the wrong sh*t. He gave a f$*k about how big Metallica was. Instead, he shouldn’t have given a f$*k and f$*king enjoyed the f$*k out of what he was f$*king doing. "
Read Rich Dad Poor Dad, BP, 10X Rule, The Subtle Art of Not Giving a F$*k, Think and Grow Rich, and get The Daily Stoic... then figure out your path, and learn to be happy at wherever you're at.
64 Replies
- 9yKurt PhillipsPro MemberRealtor · Lancaster, OH · Member since 2017 · 163 posts · 120 votes
The bottom line is that we can all learn something from everyone. I love the business side of Grant Cardone's literature and podcasts. I enjoy his over the top views on success and how to attain it. I don't agree with everything but it doesn't matter because I don't need to. I gain tons of value from his material as well as other authors and speakers. However, just because he has great things to say about business I'm not taking marriage advice from his stuff or spiritual direction. As with all writers and speakers you have to spit out the seeds and use what applies to your stage in your business and life.
- Flipper/Rehabber · Los Angeles, CA · Member since 2009 · 1k+ posts · 732 votes9y
I can see the benefit to Grant Cardone in terms of motivation, but some of the things I've heard him say I definitely don't agree. One of his concepts is that 'buying a house is for suckers' .
He says you shouldn't buy a house as a personal residence unless you have $20 million.
Many people have benefited from buying a personal residence and that's helped them gain equity to kick off their investing.
https://www.entrepreneur.com/article/270632
I have heard his BP podcast, some of his podcasts and some of his Youtube videos, but haven't read his books yet. I know his books have great reviews though.
I agree with @Kurt Phillips that you can learn something from everyone. It doesn't have to be all or nothing.
- Investor · Palisades Park, NJ · Member since 2017 · 46 posts · 14 votes9yAgree with Matthew Olszak and Joseph M. My general take is that he is more a Jim Cramer than a Peter Lynch (drawing from folks in the equity markets). That is to say, he is a personality that makes some outrageous (and at times entertaining) statements to sell his products. The one thing I do appreciate about GC is his ability to nudge otherwise small time investors to set larger goals. Whereas I may have previously focused on 1x'ing my RE investing efforts, I never considered taking going ten times that amount. If he can get me to think of going 3-4 times what I'd otherwise have thought possible (without increasing my risk profile by a similar factor), that could be beneficial. Where I disagree at times (as other posters have also described on this thread) is when he tells otherwise small time investors just starting off to "forget that small investment and 10x it by going after an apartment complex, etc." For new investors, it's either not immediately feasible (leading to discouragement at they embark on their RE journey) or can be dangerous as newbs typically don't have the experience yet to properly assess potential risks / pitfalls that may arise.
- Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes9y
I like starting small for a short period of time and then going big. I think buying a 20 unit apartment before you buy a 200 unit is valuable, but you don't need to wait for 10 years, buying small stuff to graduate. Just as valuable would be to work for an investor/company that deals with the asset class you want to get into. If you want to buy warehouses, work for a company that manages them or buys them for a year or 2. Either way, don't wait too long to think big!
- Rental Property Investor · Cleveland, OH · Member since 2016 · 227 posts · 287 votes9y
Yeah, this is one of the things that really bothers me about him. Lots of investors aim for 100 units, before I had ever heard of Grant Cardone I was already thinking "you know, it would be really cool to have 1,000 for reasons x, y and z." I picked up the 10X book and... okay? What, I'm supposed to aim at 10,000 now because my goal was already 1,000? Ridiculous. Maybe someday that will be my goal, but just 10Xing for no reason seems dumb.
I don't think it necessarily even makes sense to 10X my effort. I'm already exceeding my goals and I have a life outside real estate. Maybe it's a good mindset book for people to hear about if they're not hitting their initial goals, but... eh.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes9y
@Redgy Saint-Germain the whole concept of the power of goals is nothing new. It works because of the law of attraction. The concept is that whatever you focus on, you will attract in your life. The 10X approach just forces you to set really high goals. The result is that even if you fall short, you will still be way ahead of where you otherwise would have been.
For example, you may have a goal of buying one property per year. Ten years from now, you could have ten properties. Set the goal of 10 properties per year and ten years from now maybe you have 50 properties. The truth is most people fall short of their goals, so aiming higher assures you meet them.
Really his message is just about thinking big. All the most successful people in the world thing way bigger than the average person.
@JD Martin who is Grant Cardone, lol, love it! And I have not yet listened to Podcast 243, but I will right now!
- Columbus, OH · Member since 2015 · 210 posts · 80 votes9y
I think GC way of thinking can be beneficial to most people, because let's be honest and face it, most people need to be more concerned about not being motivated and not being able to set a big enough goal to reach your potentials , not the other way around. Most people never take risk/calculated risks and never reach their potentials.
In reality, you need to read, learn, research, and figure out what you truly want in life, what your life purpose is, absorb the wisdom from the giants, and come up with the best plans and strategy to execute.
- Columbus, OH · Member since 2015 · 210 posts · 80 votes9y
very good points! But I think GC way of thinking can be beneficial to most people, because let's be honest and face it, most people need to be more concerned about not being motivated and not being able to set a big enough goal to reach your potentials , not the other way around. Most people never take risk/calculated risks and never reach their potentials.
@Redgy Saint-Germain
In reality, you need to read, learn, research, and figure out what you truly want in life, what your life purpose is, absorb the wisdom from the giants, and come up with the best plans and strategy to execute.
- Rental Property Investor · Boston, MA · Member since 2017 · 241 posts · 135 votes9y
I think the biggest question is " when will you know you are ready to 10X your business?" . If you have 10 units will you look for a 100 units or keep adding properties to your portfolio until you reach 100?. If we are listening to GC we shouldn't diversify at all, I personally think this is BS. We have many successful people in this business with a diverse portfolio.
Learn what you can from GC but eventually create your own path
Redgy
- Rental Property Investor · Cleveland, OH · Member since 2016 · 227 posts · 287 votes9y
Originally posted by @Joseph M.:
Gwen Fyfe it's 10,000 units ...then 100,000 units .. then World Domination ! Didn't you learn anything from GC?!?
LOL! My mortgage guy is already saying to me "Gwen, just so you know, I don't think you automatically become mayor by buying half of Bedford"... so I think I'm on the right path already!
Thank you for the laugh, that cracked me up. :)
- Attorney / Multifamily Investor · Houston, TX · Member since 2009 · 173 posts · 136 votes9y
I've bought and sold two single-family houses and I can tell you that the experience did very little to prepare me for purchasing an apartment complex.
The reason Cardone recommends larger buildings is so you can hire a full time manager and actually pay him or her enough money so that he pays attention to your building. There are a number of other economies of scale which are discussed extensively on this site. If you want to manage your own properties, Godspeed. Cardone doesn't. I don't.
Cardone also says that if you're not buying a bigger deal because you don't have enough money, you're looking at it the wrong way, because every real estate investor runs out of money if he or she wants to do more than one deal at a time. He also thinks there is value in thinking big, which I absolutely agree with.
Cardone's point about a personal house you live in is that it is not an asset producing income, it is debt that you are hoping will appreciate. I agree with that -- but I don't agree with the idea that buying a house is for suckers. I just don't think you should buy a house with an eye that it's going to make you rich. Unless you're 19 years old.
I thoroughly disagree with Cardone's argument that only a small percentage of people should go to college, even though I understand that the value of a college education has drastically declined over the years.
- Rental Property Investor · Redwood City, CA · Member since 2017 · 50 posts · 22 votes9y
This is what's great about real estate investing. It allows anyone to achieve their respective goals in the means they choose to do so. Not everyone wants to be a Grant Cardone. Personally, I do since as I have that same type of drive and I want to be become a real estate mogul. It's been my dream and in some sense an obsession since I started reading the WSJ and Forbes magazine at the age of 14 that I want to lease/fractional ownership my goal corporate jet. And I'm working hard every day to achieve that goal.
I don't believe in putting down or criticizing anyone's investment philosophy if it differs from mine. There are great strategies and recommendations that are discussed in the BP podcasts and forums that anyone can leverage and put together piecemeal to match their goals.
There is no 1 correct and only way to invest in real estate. To each their own because the end goal for everyone is to achieve their dreams, goals, and financial freedom.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes9y
Originally posted by @Redgy Saint-Germain:
I think the biggest question is " when will you know you are ready to 10X your business?" . If you have 10 units will you look for a 100 units or keep adding properties to your portfolio until you reach 100?. If we are listening to GC we shouldn't diversify at all, I personally think this is BS. We have many successful people in this business with a diverse portfolio.
Learn what you can from GC but eventually create your own path
Redgy
Most people will focus on average growth and small goals. They will never 10X anything. However, once every few months, I see a BP story about someone who went from 0 to 100 units in a year. Call it bigger goals or 10X or whatever you want. The most successful people are setting higher expectations.
Grant talks extensively about diversifying through multiple income streams, so I am not sure what you are referring to. Yes, he loves multifamily and hates the stock market, but that view is extremely popular here on BP. He talks extensively about applying the 10X rule to any business or profession. In fact, his company teaches sales training and his customers are mostly non-real estate.
- Rental Property Investor · Wyckoff, NJ · Member since 2015 · 8 posts · 5 votes9y
I love Uncle G (Grant Cardone) and even my 6-year old daughter likes him :)
Grant recommends going bigger like 16 units or more as everyone states, but during the latest his show he even encourages viewers to start from 2 or 4 units.
- Rental Property Investor · Boston, MA · Member since 2017 · 241 posts · 135 votes9y
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes9y
I think the key is many are looking to everyone else's definition of success.
What I am realizing over the years is the biggest competitor is myself. It's not about what everyone else is doing but what I am doing to push myself to what I am capable of on a daily basis.
I think there is a certain level of satisfaction seeing your achievements and how far you have come a long the way.
If you are not giving your all whether that is more or less than what someone else is achieving then it really is not a win.
Yes you look at others that have achieved where you want to go but it is still about you for the journey.
I used to look for the easy fix in my 20's an found out it is hard and smart work. Now in my 40's I see it is less about what others are doing but what I want to challenge myself to do.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes9y
Originally posted by @Redgy Saint-Germain:.
I assume you are talking about point number 2, but I don't think you understand the context. Warren Buffet is also quoted as saying, "Diversification is protection against ignorance. It makes little sense if you know what you are doing." Mark Cuban stated, "diversification is for idiots." If you ever watch him on Shark Tank, you will notice Cuban never invests in any business he doesn't understand - even though it may diversify his holdings. Same is true for Warren Buffet. He is very selective and only buys certain types of companies. The point they are all trying to make is without knowledge in an area, you have no business investing.
On point 3, Grant talks about multiple income streams. For example, in addition to his sales training business, he invests in real estate. He is quick to explain that this is not diversification — it’s fortification of wealth.
Most people blindly put their money in mutual funds or index funds. They couldn't tell you what companies they are invested in, let alone anything about the performance of those companies. People want to invest in real estate so they buy REITS, not having any understanding of the underlying properties. You are better off to only invest in what you understand.
I hope that makes sense. Google the quotes and you can read more about they mean, stated more eloquently.
- 9yScott TrenchPro MemberRental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
There's a great example used in MJ DeMarco's The Millionaire Fastlane, whereby a Pharoah instructs his two sons to build a pyramid. One son goes off to the races, and starts laying bricks one by one, doing first one layer, then another, then the next. The other son builds a machine. For three years, he makes seemingly little progress on his pyramid, working on his system instead. Then, he finally puts it to work and completes the entire project decades earlier than his brother who never finishes the project.
I see a lot of relevance to this in the discussion of how best to go about accumulating vast estates. I feel that having developed a strong system, passive cash flow, and working regularly on my reputation, that I am laying the foundation for a successful career. Can one be successful without this in place? Of course, Mark Zuckerberg and Bill Gates jumped out of the gate before even graduating college and built some of the world's largest companies. But I believe that it is important for me, and do not see building the next Microsoft or Facebook as a healthy goal that I have a strong chance of succeeding at.
Instead, I believe that laying the proper foundation, starting out one property and $1,000 in monthly cash flow at a time is an effective way to not only build financial freedom, but to set one's self up to have a high probability of success at achieving further business and career success down the line. Therefore, I choose to crawl, then walk, and then potentially run.
Grant Cardone did not become wealthy through real estate. He is a successful entrepreneur and businessman, and started out in sales. He devoted himself to self-improvement, and become a top of class salesman, and transitioned into his own business. At 29 years old (became a millionaire at 30), he bought a single multi-family that didn't work out, sold it, and didn't re-enter real estate investing until 34. By that time, he was already a multi-millionaire, and invested $350,000 in a $1.9M complex. This guy isn't no-money down investing on a pipe-dream, he was a sophisticated student of business and investing who was already crushing finances to the point where he could drop $350K and then qualify for financing on a $1.9M complex.
I consider building a successful business to the point where I have so much cash that I can drop $350K on a $1.9M 38 unit apartment complex as a first investment and as a "side business" to be "massive action." Respect to Cardone. I consider using Other People's Money to leverage the down payment and buy that same property with less than $100K net worth, $0 down and no outside successes or sources of income anywhere in that same ballpark to be "stupid action." I hope folks do not confuse the two.
Grant Cardone had already laid the foundation for his pyramid, his wealth, PRIOR to taking that leap and making that huge investment. He was likely not dependent on that investment performing to make or break his future, and he likely was exceptionally well-prepared going into it, both financially AND in terms of his knowledge. Trying to repeat that result without those things in place seems to me to leave too much to chance.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes9y
Originally posted by @Scott Trench:
There's a great example used in MJ DeMarco's The Millionaire Fastlane, whereby a Pharoah instructs his two sons to build a pyramid. One son goes off to the races, and starts laying bricks one by one, doing first one layer, then another, then the next. The other son builds a machine. For three years, he makes seemingly little progress on his pyramid, working on his system instead. Then, he finally puts it to work and completes the entire project decades earlier than his brother who never finishes the project.
I see a lot of relevance to this in the discussion of how best to go about accumulating vast estates. I feel that having developed a strong system, passive cash flow, and working regularly on my reputation, that I am laying the foundation for a successful career. Can one be successful without this in place? Of course, Mark Zuckerberg and Bill Gates jumped out of the gate before even graduating college and built some of the world's largest companies. But I believe that it is important for me, and do not see building the next Microsoft or Facebook as a healthy goal that I have a strong chance of succeeding at.
Instead, I believe that laying the proper foundation, starting out one property and $1,000 in monthly cash flow at a time is an effective way to not only build financial freedom, but to set one's self up to have a high probability of success at achieving further business and career success down the line. Therefore, I choose to crawl, then walk, and then potentially run.
Grant Cardone did not become wealthy through real estate. He is a successful entrepreneur and businessman, and started out in sales. He devoted himself to self-improvement, and become a top of class salesman, and transitioned into his own business. At 29 years old (became a millionaire at 30), he bought a single multi-family that didn't work out, sold it, and didn't re-enter real estate investing until 34. By that time, he was already a multi-millionaire, and invested $350,000 in a $1.9M complex. This guy isn't no-money down investing on a pipe-dream, he was a sophisticated student of business and investing who was already crushing finances to the point where he could drop $350K and then qualify for financing on a $1.9M complex.
I consider building a successful business to the point where I have so much cash that I can drop $350K on a $1.9M 38 unit apartment complex as a first investment and as a "side business" to be "massive action." Respect to Cardone. I consider using Other People's Money to leverage the down payment and buy that same property with less than $100K net worth, $0 down and no outside successes or sources of income anywhere in that same ballpark to be "stupid action." I hope folks do not confuse the two.
Grant Cardone had already laid the foundation for his pyramid, his wealth, PRIOR to taking that leap and making that huge investment. He was likely not dependent on that investment performing to make or break his future, and he likely was exceptionally well-prepared going into it, both financially AND in terms of his knowledge. Trying to repeat that result without those things in place seems to me to leave too much to chance.
Hey man, you know you're too young to have such intelligent posts :D
Skyline Properties - Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes9y
Grant is awesome. There is any middle ground to suit investors accordingly and as one sees fit. Here is one below he middle grounded in LA. He often says don't buy a personal home and that is fine except if you are in an area that is appreciating historically and force more appreciation perhaps. Sort of like he did in LA for a few extra million. Here is his LA one. Good luck!
https://vimeo.com/34338392
- Flipper/Rehabber · Madison, WI · Member since 2017 · 49 posts · 14 votes9y
I agree with that too, @Matthew Olszak, people may take GC too literal. He is a great promoter! From what I've heard recently, he's been hinting at starting one of his own REITs. So he's been slowly planting the seed with his listeners mindset (maybe for years in the making, he's very smart), and he wants big investors.
I like what he says, and you can learn from his investing perspective. Personally I like to hear where he likes to invest and why, and even what he looks for in a property aesthetically.
I think BP is definitely a better roadmap for real estate success because there's thousands of contributing minds where someone can find an answer for their own current situation.
The Bottom Line is, There are Several paths to real estate success! No problem in listening to different perspectives. Choose what is realistically going to get you to your goals. Avoid stumbling blocks, such as concepts difficult for you to see doing yourself.
- Rental Property Investor · Boston, MA · Member since 2017 · 241 posts · 135 votes9y
@Scott Trench Right, after reading " Be obsessed or be average" I've realized Grant`s story is totally different than most of us. It may take years to build a 350k to invest in a 38 units. I am not also asking myself if he is aware of the BRRRR strategy, wholesaling etc. Don't get me wrong, the motivation part is there and I think GC can get the majority of the people thinking big but I have a problem with him saying "buying a SFH is stupid". He doesn't even believe in house hacking from what I heard him say in one of the youtube videos.
With so many newbies trying get started, it is up to us to show them the best and safest way to invest. Waiting to have 100k in a bank account to get into multifamily is not smart but it is what he is preaching. He also said in a show " if you have less than 100k cash you should not be thinking about investing in real estate because you're broke". I can think of 5 ways to double 100k that doesn't involve a 16 units.
With GC it's easy to get confused on the right path to wealth and I think BP is doing a great job teaching us that you don't have to believe in Grant's philosophy to be successful.
Redgy
- Investor · Sask, Sk · Member since 2017 · 85 posts · 25 votes9y
Love this thread and both approaches! @Matthew Olszak great way to put it.
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