Grant's message has shifted over the years. If you listen to the podcasts on BP, he tells you to skip the small deals and go BIG. However, I know people that has known him before he was THEE Grant Cardone, he was also a house flipper and used multiple strategies. He has recently used his audience to become a syndicator and build his own portfolio. However, the last few months, Grant has even talked about doing "value add" 4 Plex deals to make your first 500k and then roll it into class B-A large multi-family properties.
I think the majority of Grant's advice is great! I just don't think his advice is an exact blue print.
Best of luck on your future deals!
It’s great to go big! And it’s great for book sales to fire people up to go big.
But it’s unrealistic to think that everyone that says “I’m going straight to the big time” is actually going to the big time. In reality, they are more likely to give up on investing altogether because they feel like a failure when they can’t meet their unrealistic expectations. Which plays right into Grant’s hands, because that’s a great way to recruit passive investors for his deals...
Success is like a ladder. You climb from rung to rung until you reach the top. So yes, go big as fast as you can, but don’t try to start there. Unless you are particularly adept at jumping to the top of ladders without breaking a lot of bones.
I believe much of what Grant will tell you is true. I've also heard lots of multilevel marketing pitches over the years. Each one of them sounded really great. And for someone who is comfortable and capable of working in that business model, they can be extremely successful. But for anyone else, it might be too much to handle. Or just not their style.
After going thru a Grand Cardone phase myself earlier this year, I decided I was more comfortable buying a few smaller multifamily properties before going out and raising capital to do larger deals.
Adopting a strategy YOU are comfortable with is more important that following someone else's strategy--even if they've been successful.
Originally posted by @Alec McGinn :
I listened to the bigger pockets podcast episode with Grant Cardone today while at work. The number one point I took from him was to go bigger. Just when I think I have my investing strategy figured out starting out with duplex and 4-plex properties and scaling from there Grant says that is a waste of time. Other points Grant made that stuck out to me are to never buy real estate with a budget, to analyze 100s of properties before buying one, and buy properties that rent in the 800-1000$ range for various reasons. Now obviously listening to Grant Cardone gets me all jacked up wanting to go big, but is this feasible to go straight for the big deals and raise the capital? Where would you start if you are trying to go big?
I have not listened to that podcast episode, but I picked a random one hour podcast of his and listened in some months ago.
Somewhere around minute 35 he mentioned an amazing investment opportunity to invest with him to get rich!!!! (Pretty sure it was his REIT).
Then somewhere around minute 53 (of 60) an unemployed 19 year old facing a car repo (if I remember correctly), with only $3k to his name, called.
Let's keep in mind that one of Grant's books from a few years ago is called "Sell or be sold." With that in mind...
Grant told him that (paraphrasing) if he "stayed liquid, he'd stay broke" and told him (after pitching his "investment opportunity" again) to spend his only $3k to his name on the Grant Cardone REIT (again, I'm assuming it's a legit REIT, but it could be something else, idk).... not on rent or paying bills or buying a suit to get a job or any of that...
Since then I have not deemed it necessary to entertain listening to anything from that particular individual.
My $0.02. Maybe he has since found Jesus or Buddha, I don't know and cannot speak to that.
@Chris Mason that does sound like some awful advice for that particular individual. I generally like GC's grandiose ideas and persona, but his ideas on personal life style is where he loses me (i.e. I am 100% against renting my primary home).
@Alec McGinn I am getting into syndication myself this year with some partners who also have no experience with the strategy. However, we are hedging our inexperience by bringing in outside partners to bring clout to the table and to help raise capital, which are skills that we are building upon. I think that there really is no limit to what size deal you can take down if you realise your professional limitations and pull together a team that solves those limitations in the eyes of a seller, broker, bank, lawyer, LP investors, etc. You may have to give up a huge portion of the KP pie, but you'll be in the game taking down deals that will open doors for you down the line. That's our starting point for going big.
If you know what you are doing and have the mula sure. Keep in mind GC started with one SFR on a liar loan and has made millions on a single sfr, a big one. Maybe it is better to start where the fit is best vs what others recommend for commissions.
I think you take Grant's advice with a grain of salt. He gives a lot of great information but to jump into a big deal without doing a little one first is foolish. Nothing can teach you more about real estate than doing the deals yourself and getting the first-hand experience. Small deals also allow you to screw up and not blow things up.
His pitch is great. He is giving investors ideas on what to do. Like Brian mentioned once the investors realize its too hard they end up investing with him. Not a bad thing actually a great way to market his syndications.
Grant is correct though. As a small investor or even investors with millions. You won't be able to buy the deals that Grant purchases. Those deals require years of experience as a multi-family operator.
I knew a guy who used to say "Go big or go Home" all the time. Well, he went big and when he went home but that home was no longer his. True Story.
His message is designed to groom potential investors for his non-accredited fund offering, as hopefully a sort of feeder program to his accredited investor offerings. He says you can't make money in single family because HE makes money selling you interests in large multi-family. People make millions in all aspects of the real estate industry. If you listen to him, just stay cognizant of the fact that everything he says is designed to remove whatever objections you may have to investing with him. If that's the right path for you, go for it.
@Alec McGinn Yes, of course bigger is better. Economies of scale, staffing for the property, and analyzing deals and returns with more zero's involved is great. However, going big right out of the gate is very tough. Start where you are comfortable and then push your comfort zone on each deal thereafter and before you know it you'll be doing 100+ apartment deals. I'll leave you with this. If you want to go big right out of the gate, then join a team already successful. Find a way to add value and learn with a hands on approach.
can anyone provide the "how" of what he's proposing? What's "go big" in his mind that a small-time investor can relate to? is Grant Cordone to RE what Dan Bilzerian is to poker? lol
I first heard of GC mid this year ('18) when he was invited to speak here in the DFW area. Then a friend's son mention they were talking about him in B-school.
At that moment, I was a passive investor in 4000+ units (we boast about unit count, but only own a small percent of a deal. It's not as big as it sounds).
I have never needed the "Rah-Rah" factor, but I decided to do a little research. I visited GC's web site: 5000 units and $1B, that works out to $200K a door. That's not my market, I am in mostly B & C. So then I continued down the page and found 20 or so deals that look a lot like REITs. Many were close, most indicated a CoC return, a pretty good one. None seem to indicate any sharing of the 'take' when sold -- maybe he doesn't sell, we usually do after 3 to 5 years and make a lot of Cap Gain.
In my mentor's group, 70+ sponsors have become millionaires from there MF endeavors and dozens of passive investors, like me, have become millionaires from their MF endeavors. I do realize one can start with less initial investment with GC and he pays a great return, but does he spin off millionaires? Seems to me that one fellow makes most of the money at GC.
To set the scale, our group has done about 60 deals, about $0.5B value, this year ('18), 40 deals last year ('17) and about 30 in '16.
No, I am not a paid spokesperson - just a very loyal and wealthier student!
Go big sounds sexy and it gets your attention. Go big is true if you want to "make it big," but just like an athlete that makes the big's it takes hard work and dedication. If you start smaller, work under someone or form partnerships you will be able to learn and grow along the way. I agree with going big, just make sure that you've made some mistakes first on deals that won't take you out at neck. My advise is to START. Start with what is just outside your comfort zone, push yourself and then quickly work your way up to big deals
I totally agree with @Brian Burke on this one.
If you can ignore the delivery, you will find that GC recommends many of the same beliefs and habits as other entrepreneurs and authors:
- Take ownership
- Don't make excuses
- Don't be a victim
- Overcome limiting beliefs
- Raise the bar on goals
- Take action...learn
- Don't let the economy determine your destiny
- Get out of your comfort zone...learn
- "Can do" mindset
- Embrace change
- Focus on goals
- Value results
- Network (with the right people)
Take what works for you and ignore the rest. We are all pitching ourselves every day and ego is involved whether we like to admit it or not. With GC, what you see is what you get...no mystery. Focus on the message rather than the messenger.
@Alec McGinn - Just remember what you want at the end of the day. It's good to get motivation and inspiration from others. But ask yourself what are you going to achieve with real estate? What will make you happy?
If you want to buy real estate so you can travel the world with your family, don't go big.
Big has a large amount of benefits but comes with a lot of downsizes that you have to want. Raising large amount of capital can be stressful. Answering to needy capital partners can be stressful. Working 12-14 hour days can be stressful. If that sounds exciting then I would definitely chase larger opportunities.
Reverse engineer what you want and work from there. Most people I speak to don't actually want to get big, they want freedom of time. Getting big doesn't always provide that.
Grant is awesome. BUT remember he is trying to grab attention. He has done hundreds of millions in apartment deals but he can only do future deals if he raises money. To come on to BP and pitch go bigger to a listener who has say $300k in a 401k that is the guy he wants to talk to. HE IS AFTER ALL A SALESMAN. What good will this potential investor be if that same guy with $300k wants to buy duplexes.
If you are starting out you have no reason to be out there raising money. Raising money comes with responsibilities. Stay in your lane. Learn how to work with capital you have and grow both in education and in learning how to do deals. Eventually you will get to the multi family. We all had to crawl before we could walk then run.
In our society instant gratification is what is pushed through social and media. Why workout when you can take a blue pill and it will burn your fat away while it helps smooth your skin.
Why buy SFR when you can go out and buy 50 unit apartment building is the sexy thing and makes an investor look successful. Yet same investor has never rented out a house before, never drafted a lease before. Those are the owners that will loose their shirts.
If Grant was selling seminars to how to grow rich for the average joe I guarantee he would be using SFR or small multi to try and lure in people to his membership program or DVD package deals.
Again Grant is great full of energy so not knocking him down. Get your paper boy. But unless you have a large retirement account or $200k in the bank then his message is not really designed for the newbie looking to get into real estate.
I laugh how in the last 5-6 years real estate investors have tried to make this age old business so complicated.
Buy what you can afford and flip it or rent it out and move to another deal and so forth until you have both experience and cash to do big deals. Everyone had to start somewhere.
I've listened to all the Cardone BP podcasts and read all of his books. He's a great motivator and has a way of getting you to think big while at the same time acknowledging the work it takes to get there. There seems to be a lot of sentiment in here about what he is doing now is just line up future investors for his funds. I don't really agree with that, last time he talked about it he already has more cash pledged than he has deals for, for at least the foreseeable future.
The other thing he talks about though is having the financial discipline to save up enough cash to be an investor, I've heard him say multiple times get to a point where you have $100,000.00 liquid before you even think about going big and investing in anything over a 4 or 6 plex. How you get to that point is starting small flipping SFR, finding good cash flowing 2-4 plex's etc.... At least that's how I'm doing it. LOL. And no I will be investing with Grant when I get to that point, I will be starting my own fund.
Be careful who you listen to. Ask: "Does he have a hidden agenda?"; "Why is he teaching what he is teaching?" "What's in it for him?"
You got to be skeptical of real estate gurus. Most of them admit they make more money selling information than doing real estate deals. Or in some cases, they teach to get investors to do deals with them.
Having said that, I like Grant Cardone's concept of thinking BIG.
Large multifamily has scale. With my 50+ unit apartments, I can hire a full time maintenance manager. It can have a dedicated property manager and a separate leasing manager. Here's an example of a 48-unit apartment building that I sold last year and made over $1M.
Larger properties ironically are actually easier to finance than smaller properties. So going BIG actually makes a lot of sense. However, does it make sense for EVERYONE? Of course not. Start small and work your way up. And what is small for one person can be big for another. Start where you can at the price you can afford and then learn as you go. Have a cushion in case things don't turn out as expected (because they rarely turn out as expected). And then trade up to bigger and bigger properties (with bigger and bigger cashflow).
I've been reading his book 10X lately and it does make a lot of sense. 10X book to sum up briefly is expect to put in 10x the effort, 10x the time that you would expect to get things done. You should also be setting 10X goals so if you fail you're still well ahead.
Ie. If your goal is to make 100K a year, it should be set to 1M / year. Once you have that mindset and 10X goal, your overall strategy changes drastically to accomplish that goal.
Hearing GC talk about pushing yourself harder and further to achieve big goals, I'm reminded that in addition to being a salesman for real estate, he's also a dedicated Scientologist. A quick search of achieving "big goals" in Scientology finds their writings which are very similar in tone and content (see example below). Knowing how their "big goal" is to recruit followers which to drain every last dollar from them makes me suspicious of GC's motivation as well. My .02
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