Is Grant Cardone giving sound advice?

13 Replies

Grant Cardone states that buying anything less than a 12 unit is a bad move. For someone just starting out who may have 1 property or less and not a lot of capital, is this good advice? How do you all feel about this?

The way i understood him is He is a confident man. He strongly believes in what he believes. He highly recommends multi family because of "economies of scale" .  I heard lot of stories from people doing bigger deals with none of their own money . Through partnerships, syndications etc.  The point is if multifamily is what you wanted to do , you can do it :)

@Bill E.

Until recently he was saying anything  less than a 16 unit, so the truth is that he is relaxing his standards a bit.

If you watch his shows regularly you will see that he suggests that those getting started essentially flip smaller properties until they can get to the larger ones. 

So buy a 1-4 unit that is distressed, fix it up, then 1031 exchange it (or cash out refi) to move into a bigger deal. Do this a few times until you have enough cash to get a 16+ unit deal.

At 16+ units you will get a lot of the economies of scale that make multi family investing so profitable.

The other thing I have seen him say is to partner with people wealthier than you to get started in bigger deals faster. 

402-965-1853

Just think of his advice (any anyone's for that matter) as a guideline. Just because you buy 12 units and smaller doesn't mean you'll fail. Just because you 10x some action doesn't mean you'll succeed.

But generally you'll want to buy bigger and generally you'll want to take some sort of massive action.

There are many ways to be successful in real estate. GC way is just one of many ways. His mentality is different then mine, but it doesn’t mean it’s wrong. I started recently and decided to focus on SFR, almost the complete opposite of what he says. I think this way can still be profitable and so far it has been.

Since I’m young (barely 23) I have more time than say someone who’s 40 to get into bigger deals. I plan to have 10 units by 27 and then to start in commercial of 6-10 units and by 30s 20 plus units. This is my plan and I think it’ll be profitable, but everyone’s situation is different.

I’ll be 12 years into my landlording journey but only be 35. By comparison GC is currently 59, so he’s just at a different stage in life.

It’s also worth remembering that GC didn’t get rich through real estate. He launched several successful companies that made him millions and then poured that money into Real estate. That’s much different than making millions in real estate.

Hope this helps

What grant says makes complete sense. Getting to the point that you can purchase a 16 unit is the issue. If you listen to him at all, you’ll know that he saved money for quite a few years before he bought his first small apartment deal. He had saved $350,000 by that point.

@Bill E. @Rohith Janga
Understand a mans business and understand their messaging. Grant targets via his widespread social media messages to the broke investor with no track record, rolodex, or money to really close a deal. He is phishing for unsophisticated investors to come into his deals and playing the numbers game. He is finding birddog armies to find deals for him.

What I respect about Cardone is his message is consistent. He doesn't believe in diversification and has a strategy that he believes in and consistently executes. That is my key takeaway. Find the strategy and market thesis you believe in, and then execute the hell out of it. There are plenty of folks I know how are very successful flipping SFH's, and that is all they do. Also lots of people who focus on buy and hold SFH or duplexes. Neither of these are strategies that Cardone advocates for, but they keep to their strategy and are experts at it.

While I believe much of what he does regarding Multifamily as the best path, it really comes back to staying focused on your goals are, what you are good at and then executing. 

Originally posted by @Lane Kawaoka :

Bill E. Rohith Janga
Understand a mans business and understand their messaging. Grant targets via his widespread social media messages to the broke investor with no track record, rolodex, or money to really close a deal. He is phishing for unsophisticated investors to come into his deals and playing the numbers game. He is finding birddog armies to find deals for him.

Lane, I think your assumptions are wrong unless you have some hard facts to support them. Lookup Cardon Capital and see their current and past projects. Then ask yourself: what kind of "broke and unsophisticated" investor could possibly "birddog" a $30M deal for Grant? Also note that Cardon only allows accredited investors to invest in his offerings. Last time I checked, "accredited" means $1M networth or $200K income - a far cry from being broke or unsophisticated. 

I have no connections to Cardon and I am not his investor. Just want to correct the obvious misconception about him.

@Bill E. thanks for asking this question! Helpful indeed as I was wondering the same thing

I think buying multi-unit buildings is ideal but most people don't have the capital to take advantage of the economy of scale

@Bill E.

Hi Bill

Grant has some amazing sales training, but I think it's easy to say to go as big as possible on your first deal. We just had a podcast with Harv Eker last week and I thought his advice was the best: THINK BIG--START SMALL.

Whenever you start anything new, there are variables that you have yet to encounter. The goal is to have your first investment be a success, and a smaller deal may be easier to handle at first.

We started with 25 units, but bought a 36 unit 4 months later and then a 136 unit deal 6 months after that. Focus in buying right, whether it's 10 units or 100 units.

Gino

@Gino Barbaro , I am 100% agree with you.

By the way I regularly follower of your podcast, you guys provide great information... Keep it up..

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