In my humble opinion, real estate is the best way to grow your wealth. If you want to get super rich (think billionaire) get involved in real estate — but I’m not talking about just any kind of real estate.

For example, a home is not an investment, because it doesn’t pay you each month — you have to pay it.

It’s a liability to me, not an asset. Not only does a house leave you less mobile, it ties up your money so you can’t use it for real assets.

There are many indications that multi-family real estate investments will continue to be great looking into the 2020’s and beyond:

• 75 million Baby Boomers are retiring
• Many of today’s apartment complexes may be converted to retirement communities in the future
• Many millennials aren’t buying homes
• It’s getting more expensive to build new apartment units

Your first challenge is simply getting a down payment. Once you do, it’s easier to get a loan on a multi-family unit than any other piece of real estate. Multi-family is the easiest way to get rich once you’re in the game!

Let’s say you can find a 49-unit property priced at $35,000 per unit with an 8% cap (the return on investment based on the income a property is projected to create) for $1,750,000.

If you pay cash for this deal at $1,750,000, you would make $140,000 free cashflow per year after expenses. With $450,000 down and financing $1,300,000, the debt payment would be $78,000 per year. This would make you $62,000 cash flow per year. This cannot be done with a home, period.

For the vast majority of people, college never leads to riches, nor does a home. If your goal is to build up $300,000 of equity over 30 years, then buying a home is a way to park your money the same way you would in a savings account or under a mattress. If you want to leverage your money and grow wealth, buying a home is not the way to go.

If you go into multi family real estate investment the right way, over the next decade it could be the best investment strategy of your lifetime — and I put my money where my mouth is. I currently own almost 5,000 apartments and will soon have over 10,000. They are not building enough multi-family apartment buildings to keep up with demand.

If you want to get involved in multi-family real estate, start with a minimum of sixteen units, avoid single family residences and condos, and only buy multi-units at one address.

If you struggle with producing enough income to save enough for a significant down payment, you can partner with me in smaller amounts.

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It was the largest entrepreneur conference in the world and I had a big audience who trusted me, I had a product they wanted, I had been cultivating a relationship with these people through my social media for months — in some cases years — and I had everything arranged legally to raise the funds. Last, but certainly not least, I had an incredible offer.

$15,000,000 in 90 minutes.

What I did was combine 6 ingredients together, and it’s the same 6 ingredients you can use, to raise ANY amount of money in ANY amount of time.

Here they are, piece by piece:

#1 Have an Audience — You need an audience to tell your story to. No audience, no money.

#2 Be Trusted — No story will fly if people don’t trust you. Be transparent!

#3 Have a Product — You need a product that is easy to tell a story about. Is it something people like and want?

#4 Cultivate Relationships — You need to know people. People invest with people they know.

#5 Have Approval to Raise Funds — You need some sort of fund structure set up, something legal to make things official. For my product, I’m approved by the SEC.

#6 Give an Offer — You need a clear, concise offer that people understand so they can take immediate action.

Follow these 6 steps and you will be able to raise money.

It doesn’t matter what industry you’re in or what you’re raising money for, you need these 6 steps. For me, it’s real estate. And the bottom line is that no matter what you’re raising money for, you will raise money to the degree you think it’s a good thing! This is how to make money in real estate with no money really quickly.

If you want to learn more about joining me at Cardone Capital with our fund offerings, explore this website — my team and I have more than enough information here for you to make a decision. Then you can also make millions in real estate.

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That begs the question, what stock and what real estate are we talking about here?

How long is the investment period for?

Go to Google and there’s not one data report on commercial real estate vs stocks. But I’m here to tell you that if you take one of the best stocks, an Apple or a Google, and compare it to a good piece of property like an apartment building, there are 3 main reasons you should go with the real estate OVER the stock.

#1 Control

You have more control in real estate than you do with stocks. When you buy a stock, you don’t control what happens to the business—you just hope it goes well.

#2 Leverage

You can spend $30 to get $100 in real estate, but to get $100 in stock you need to spend $100.

#3 Cash Flow

Stocks don’t give you a monthly check!

No matter how you look at it, the bottom line is that commercial real estate gives you more control, leverage, and cash flow than stocks give you.

That’s why I don’t invest in stocks, I invest in real estate. But you have to make the choice for yourself. It’s the red pill or the blue pill.

Do you want something with more control, more leverage, and more cash flow, or do you want something that has a higher potential to moon but also a higher potential to crash? I hope you got your answer to commercial real estate vs stock market. So invest in it and make money in real estate.

Learn more about what we do here at Cardone Capital and register HERE to find out how you can potentially invest with me in cash flow positive real estate!

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There are 7 things Cardone Capital looks for in rent roll in real estate:

• Gross Potential Income — what’s the maximum amount you can achieve?

• Effective Rents — what’s the gross potential minus vacancies?

• Market Rents — what are your neighbors renting things for?

• Occupancy — how many people are actually living there?

• Lease Term — how long tenants are there for?

• Other Income/Utilities/Concessions/Etc. — what are the tenants paying for?

• Unit Type (# of 1bd/2bd/3bd/etc.) — how big are the units?

These are just some of the things you must be asking when looking into a new property! Rent roll analysis is an important stream under the study of real estate.

When did the tenant agree to the lease?

When does it terminate?

What are they paying?

Who lives there?

What do they do?

Did they make a deposit?

How are they paying each month?

Remember, buying a property requires a lot of due diligence. Don’t rush into something.

At Cardone Capital, we take our time before investing in a property, and we only pull the trigger when we know everything about the property and know it’s a good deal.

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How many units are you looking to buy? The more, the better.

Real estate is a business sitting on a property—and the more units you have, the bigger your business will be.

Top 7 Signs You Have a Great Deal – Grant Cardone Capital

In addition to the number of units you’ve got, what else signals a good deal?

#1 Positive Income

#2 Banks need to be interested in your deal

#3 Your manager needs to be happy about the property and well paid

#4 Unsolicited buyer interest

#5 Stable and growing job growth in your market

#6 Salaries 3X or greater than the rent

#7 Location

In fact, Monopoly became the best-selling privately patented board game in history.

You want to win, right?

The more expensive a property is, the more valuable it is.

Do you want to own the Boardwalk or Baltic Ave.?

What does that even mean?

P=Passive Income

E=Earned Income

You want your P greater than your E, right?

But most people want their passive income so they can forget about their earned income—I’d suggest you need both!

And that means you need to start finding a great deal even as you continue to work.

The problem is, deals that are easy to buy are hard to sell.

So, when you go looking for a real estate deal, you need to look for the right kind of deal.

But what happens when you find that diamond in the rough? What happens when you find that GREAT deal you know is going to make you a ton of money?

You need to write an offer.

The mistake most rookies make is they start negotiating over price before they even get to the write up.

Don’t negotiate price before the write up.

Here are 3 quick tips to keep in mind:

#1 Ask: Simply ask the seller if they are willing to sell. Of course if a property is on the market you know they’re willing to sell—but I’m talking right now about hard to get deals, the kind of deals that aren’t on loopnet.com or on sale at your local broker’s list. If you see a property you want, ASK the owner if they’re willing to sell even if it’s not on the market!

#2 Price and Terms: Find out what are the acceptable price and terms. Why, because you can’t get anywhere without a starting point! Plus, you need to know what kind of numbers you’re going to be dealing with.

#3 Confidence: You must express to them that you’re the buyer. You need to have confidence in YOU. The more confidence you have in yourself as the buyer, the more confidence the seller will have that he or she will close the deal with you!

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By dividing 72 by the annual rate of return, you can know how many years it will take for your investment to double.

The rule of 72 with compound interest was great back when interest rates were higher.

But today you need a new vehicle that allows you to:

1. Protect your capital 2. Give you at least a 6-10% return 3. Gives you the possibility of appreciation in the future 4. Gives you tax advantages

The bank is for people who don’t trust in themselves. You need to be doubling your money quicker than what the banks will give you. The house is about protecting money, but it doesn’t give a return or a tax advantage.

Average rate in US banks is below .05% which means it would take you at least 144 years to double your money. Do the math. You can’t compound at the bank!

I’m seeing doubles in 3 years, 4 years, and 5 years investing in multi-family apartment buildings.

This is the new compound interest.

Don’t wait until you are 90 years old for your money to double!

The average return in my real estate holdings is north of 12% before appreciation. Without any appreciation money doubles in 8.3 years while protecting your capital.

Ignore your money and it will ignore you!

“The new compounder of the 21^st Century is multifamily real estate” …but not just any apartment building.

Rents are going to go higher for class B for any other types of apartments.

There are 4 main types of properties:

Class A: $1,500 to $3,000 rents

Class B: $1,100 to $1,500 rents

Class C: $800 to $1,100 rents

Class D: $500 to $800 rents

You need to be in A or B in select markets.  Don’t get started in C and D, that’s a management nightmare. Detroit will never be an A market. California will be C and D markets in future.

You can buy junk—or you can buy great property.

At Cardone Capital, we don’t do junk. We invest in quality properties that cash flow and wait for appreciation—and this is the compounder of the 21^st century.

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But a single-family home is usually not a good investment—it’s a liability.

Here’s the true cost of buying a home:

Down payment + size of mortgage + all the interest payments + all the taxes + all maintenance + opportunity cost of time

The opportunity cost is the biggest cost of owning a single-family home.

It doesn’t cash flow if you live in it, but if you do rent it out for cash flow and that person leaves, you’re back to being 100% vacant!

You want to have multiple doors to rent, that way even if 5 or 6 people leave you’re still 85% full.

You don’t want just one McDonald’s—you want 50 of them.

Why does network marketing work? Because you’re not dependent upon one person, you got hundreds and thousands of people.

With single family homes, even if you rent them out, you just can’t scale. You can’t have the economies of scale unless you buy the whole neighborhood, but then you have the whole neighborhood calling you.

And what happens to single-family homes if interest rates go up?

The 10-year treasury rate is currently 2.69%

I’m borrowing money right now at 4.29%

That’s a 1.60 spread.

Let’s say interest rates go to 6%.

There will be 4 areas off the top of my head affected by this:

#4 Credit Cards 

Will have a minor effect.18% will still be 18%.

#3 Federal Government  

How much money do they owe? If their rate goes from 2.69% to 6%, this country is over. And if we’re over, China is over.

#2 Auto Industry   

Autos will get crushed if interest rates go up. Interest rates are not paid by consumers, interest is paid by the manufacturers to subsidize the rate. Have you ever seen commercials like “0% interest for 72 months!”?  That’s auto subsidizing.  They might borrow money at 2.69%, but it’s not free!

#1 Homes   

Single-family homes will be first to be hit when interest rates spike. Homes won’t sell anymore. Homes will literally stop.

So, the bottom line is I’d rather be 90% occupied in multifamily than 100% occupied in single family.

Many doors are better than one door.

And that’s why we do multi-family here at Cardone Capital.

Learn more about how you can get involved in our funds HERE.

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Leveraging money in real estate makes you extreme money.

Time is either going to kill you or get you where you want to go—and time gives you leverage.

Great assets can always be leveraged.

And since leverage is the ultimate multiplier—you can use one dollar to buy four dollars.

What investment allows you to invest $1 million and own $4 million in assets? Real estate.

Add to that these are real assets that can’t be easily replaced or lost, they cash flow, meaning we are paid to wait for appreciation (leveraging time)…

That’s what we do at Cardone Capital, we receive cash flow on the down payment, and wait for the entire $4 million to appreciate; this is the ultimate multiplier combining leverage and appreciation with cash flow.

Ask yourself this:

Will a property still be there in 10 years? 99.99% chance it will and insurance covers the .01%.

Can it be easily replaced? It can’t be destroyed and it will cost more to build in 2029.

If we pay $15 million for an asset worth $50 million, and it only goes up in value by $15 million, selling for $65 million (easy to imagine), then we’ve made 100% on our money.

Our capital invested doubled without the asset doubling. Get it?

Leverage Explained

Riddle: If you and I buy a $20 million property with $5 million down and it cash flows at 10% a year, what did the property cost us?

Answer: The $20 million property cost us nothing.

The $5 million less the cash flow of the 10% per year for 10 years ($500,000 a year) means our original investment is returned in 10 years. Now, we literally own the property with no cash.

Riddle: If we buy a $20 million property with $5 million down and it does not cash flow, what did it cost us?

Answer: $5 million.

This is leverage.

Because of leverage, I was able to buy a $1.95 million asset back in the 1990’s that produced $40,000 of positive cash flow a year while I waited for appreciation.

39 months later, I sold the property for $5.2 million resulting in a total profit before taxes of $3.7 million. That is a 10X return.

Leverage

I don’t speculate and I don’t gamble with my hard-earned money. I have worked very hard for my money, as you probably have, and I only invest in cash flow producing real estate.

This is an asset I can LEVERAGE with good debt, the property covers all operational expenses, improvements, insurance, taxes, and debt while I patiently wait for the rents to increase and the value of the property then appreciates at which point we sell or refinance and own the property with no money invested.

I never deviate from this criteria. I invest my surplus cash into income-producing machines, in great locations, where the rent is less than the cost of home ownership, and I am buying at or below replacement cost.

When I do invest, I buy very large deals, typically 200 to 1,000 units at a time, in markets with decades of projected job growth, and market demographics more likely to rent than own.

This is how I leverage my money, and how you can too.

Join me in our newest fund, it’s filling up fast!

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Well, what then is the quickest way to TRIPLE your money?

In all seriousness, you need an investment that protects your capital, gives you cash flow, tax advantages, and appreciation.

Why put your money in a bank and let it earn half of 1% when you can put it in something like Cardone Capital where your money is in real assets?

If you want a 3X return on your money, get involved with valuable multi-family properties that produce income every month.

I’ve spent the past twenty-five years working my tail off, taking my extra money and investing it into real estate.

I missed many things so I could earn extra money so I could invest in real estate and create a passive income stream. The goal was that my passive income would overtake and make more than my earned income.

Understanding the math of real estate and how to get your investment to multiply is fundamental.

One of the many factors to look at is what your IRR is.

An IRR is a metric used to estimate the profitability of a potential investment. This is then used to evaluate the attractiveness of a project or investment.

In real estate, specifically multi-family real estate that I invest in, I’m always looking for a huge IRR. In fact, an IRR of fifteen percent and higher (much higher sometimes) is absolutely possible.

But if the thought if doing all this real estate stuff is overwhelming to you, you’re not alone. It’s intimidating to do a real estate deal by yourself, that’s why so many people are joining me at Cardone Capital—you can get a 3X return passively without trying to figure this stuff out on your own!

Most of those who have registered with CardoneCapital.com or call my weekly Real Estate show say, “I don’t have time to find deals, call brokers, negotiate purchase and sale agreements, hire lawyers, and manage tenants.” So, if that is you and you are interested, check out what we are doing here.

The offices of Cardone Capital where our goal is to 3X your money

We only invest in apartments we are willing to hold for a period of 10 years or longer with the goal to 2X – 3X our investment.

Our deal size is $30 million to $200 million involving 200 to 1,000 units. We use debt on every deal whereby I arrange all debt based on my connections and reputation. I negotiate all the terms of purchase, sale, and debt, and am fully responsible, leaving investors with no exposure to the debt obligation. We typically use 50% to 75% debt leverage with a hold time that is discretionary, meaning we are not forced to sell in a bad market.

So, if you love real estate be sure to register at CardoneCapital.com. We will take investors on a first to register basis. Register HERE

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There have been more people made wealthy through real estate than any other avenue…and there are specific reasons for this.

Real estate isn’t rocket science, but for many—especially if you’re just getting started—it seems complicated.

But I want to make it simple for you!

Here Are 5 Simple Reasons to Invest in Real Estate:

#1 Capital Preservation: Paper assets are a risk. Your dollars are not even accessible at the bank — it’s turned into electronic digits. Bitcoin and cryptos are a risk. Stocks are risky. As a hard asset, real estate has meaningful value in ways other “investments” don’t. If my real estate burns down, insurance covers it. Real estate does not have red and green days like the stock market, which is important because you never want to lose money!

#2 Cash Flow: Cash flow secures the assets — meaning the income provided by renters should exceed the cost of operating the property leaving enough cash to pay debt and provide investors with a positive return on their equity (cash). This provides a regular income stream that is significantly higher than the typical stock dividend yield!

#3: Tax Advantages: The US Tax Code benefits real estate owners in a number of ways, including unlimited mortgage interest deductions and depreciation accelerations that can shield a portion of the positive cash flow generated and paid out to investors. I sold a property recently that made $14 million profit and all of it was reinvested into another property deferring ALL income taxes until a later date!

#4 Appreciation: Over time, inflation, which is considered the hidden tax, enters into the economy, reducing your purchasing power. You can make the same amount of money today as 20 years ago and see you have less money left over. However, the right real estate investments have historically provided excellent appreciation in value because the property value is based on rents increasing not just property values!

#5 The Mystery Multiplier: Want to know the 5^th reason why people invest in real estate? Pick up a copy of my new book How to Create Wealth Investing in Real Estate. I’ll give it to you FREE!

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