Does No-Money-Down Work...?!
OK. So - unless you live under a rock, you've by now listened to Podcast 108 featuring Grant Cardone. If you listen between the lines, and you don't have to dig too dip, Grant has nothing particularly nice to say about the no money down strategy. He makes this point of view known elsewhere as well...
Since you absolutely can't argue with Grant's success, and he absolutely must be taken very seriously, where does this leave Ben Leybovich and @Brandon Turner who are notorious on BiggerPockets for nothing short of nothing down?!
My thoughts:
Grant is not so much trying to create income in RE, but to change the face value of earned income in his businesses to RE income, which is not only taxed lower, but Grant feels is more stable. To him, RE is not a stepping stone - it is the destination. All good by me...
Now - consider myself. I've built a portfolio of multifamily which has allowed\s me not to work for a living. I pursued the nothing down strategy because it was the only option - I am not smart enough to start businesses and unfortunately, while I was quite good at playing the fiddle, because of the MS diagnosis I was unable to pursue that career (not that it would have been a career capable of generating any serous revenue anyhow).
Jump to today - my partners and I are currently negotiating on a 90-unit out of state. This means a couple of interesting things:
1. This deal, if it grows through, will make me, and the investors, some respectable money.
2. I have partners, without whom I could not do this kind of a deal at this point. Both of these guys have more money and units than I do today (though this is not going to last).
Both of them, I'd like to believe, take me seriously... Why - because I've done a lot of ****, and I've learned enough to not do even more ****. They think I am not stupid.
Guess what - I got smart doing nothing down deals...
3. I've been using OPM for 8 years now, and if this deal comes through, I'll be floating a PPM of $1,000,000+; I will raise $1 mil from investors who agree with my partners in that I'm not stupid and know what I am doing.
Guess what - I got smart doing nothing down deals...
To me - nothing down is not a destination. It is a stepping stone. I am going to turn 40 in March. I have a portfolio (all bought with nothing down) that has allowed me to do vastly better financially than any music student I went to college with. It has allowed me not to work and focus on learning RE, and it has bought a margin of financial safety for my family which is better than any of my friends...even those earning high incomes...
And now, I have put myself in position to do much bigger projects, which, after a few years, will begin to cash out big. At the end of this road, I will be able to retire with free and clear A Class RE with the money I parlay from my syndication pay days...
All of it was teed up by having the audacity to not listen Grant Cardone and go for it in the only way that I could - No-Money-Down!
I've built a small business in RE. Now, I am growing that business into an empire by re-investing the dividends from the business I already have. There is some money I can throw around now, but mostly knowledge is the biggest dividend.
Thus - while no one can disagree with success, I'll take a stand. I disagree with Grant Cardone - No-Money-Down does work. However, in this strategy RE is not the final destination, but a stepping stone to bigger and better things. I am the poster child of this...
Thoughts?