Rochester, MN · Member since 2018 · 79 posts · 36 votes
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?
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
7y
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.
Carolina · Member since 2017 · 519 posts · 222 votes
7y
@Chris Mason
I too heard that podcast, can't remember which one it was. I was also disgusted by that. Even though there were only minutes left in that episode, I turned it off immediately and vowed to not take any of Cardone's advice moving forward. There are so many places and people from which we can educate ourselves and get good, sound, healthy investig advice. When I heard him tell that poor guy to basically "Just give me that last $3,000 in your pocket!"... I was done with him. Like a shark circling their prey. Disgusting.
I too heard that podcast, can't remember which one it was. I was also disgusted by that. Even though there were only minutes left in that episode, I turned it off immediately and vowed to not take any of Cardone's advice moving forward. There are so many places and people from which we can educate ourselves and get good, sound, healthy investig advice. When I heard him tell that poor guy to basically "Just give me that last $3,000 in your pocket!"... I was done with him. Like a shark circling their prey. Disgusting.
Investor · Chattanooga, TN · Member since 2016 · 676 posts · 543 votes
7y
@Alec McGinn If I could summarize this thread it would be go big when you are ready to go big. My thought is that for many people buying their first rental is going big. It's easy to forget that most people in the world and probably even most people on BP never actually start investing. So yeah go big but do whatever is right for you. I think larger multi-families are a great asset class but it took me 8 years and hundreds of smaller deals to get my first 12 unit (last October) since then we have bought a 19 and a 32 unit and are under contract on a 41 unit. Last year at this time a 41 unit would have been too big for us and the 12 was a big stretch. Now I am not super interested in anything less than about 30 units. Next year if all goes to plan we will probably be only looking at 50+ unit deals. I do wish I had scaled up a little faster but there is no way I could have handled our 32 unit 8 years ago. Maybe I could have gotten there a year or two after starting but not as the first deal. My first deal was a condo for 30k my second deal was another condo for about the same price and both of those deals seemed huge to me at the time. I don't regret buying either one and still own them both.
My goals are to build a solid rental portfolio as passively as possible that cash flows enough for my wife to retire and for me to eventually work part time. I don’t want to leave the rat race because my current job is rewarding and I am a part of company that makes a difference in people lives. Not to mention we have great affordable benefits. I would like to get to $12,000k of monthly cash flow in the next 20 years. From there I just want to scale consistently to keep increasing my net worth.
With those goals, sounds like investing in other people's deals would be great for you. If you're an accredited or sophisticated investor, you can invest in syndications and other bigger deals like that. Good way to earn a return on your cash, as well as learn how syndications are put together so you can do your own one day if you wish.
Rental Property Investor · Baltimore, MD · Member since 2016 · 109 posts · 31 votes
7y
Grant is an incredible marketer and he has an uncanny way of making you see the bigger picture when it comes to investing in real estate. But timing is everything. The last thing you want to do is jump into a big deal without the right education, experience or team at the wrong time. Especially when you’re using other people’s money to invest. This is a long-term get rich slowly business, not a get rich quick business as many think. I’m skeptical of anyone who suggests just jumping in and going big without making sure that this is the right time. There are folks out there who stay small and never go big, and perhaps they could or should, but for whatever reason they never take the leap. But there is nothing wrong with hitting singles and doubles all day. If you want to create a long-term successful business, then there is nothing wrong with starting small and scaling up over time. Because timing is everything.
Rental Property Investor · San Ramon, CA · Member since 2017 · 350 posts · 611 votes
7y
The fundamentals of what he preaches is true - larger deals are easier to manage, get debt, appreciate, etc because of the economies of scale. I've been listening to his real estate mantra for a while and skipped the 1-4 units and went straight to 16 units for my first deal. Continued to acquire in that range and looking to go bigger in 2019. It is truly easier to manage and create equity as the unit count goes up.
The 16 unit minimum is because in california and some other states, any property 16 units and above requires an on site manager, which helps keep the property in good order and keep an eye on things.