multi-family real estate investing – Cardone Capital https://cardonecapital.com Cardone Capital Wed, 23 Jul 2025 16:29:36 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.2 5 Reasons Why People Invest in Real Estate https://cardonecapital.com/2018/12/24/5-reasons-why-people-invest-in-real-estate/ Mon, 24 Dec 2018 18:53:29 +0000 https://cardonecapistg.wpenginepowered.com/2018/12/24/5-reasons-why-people-invest-in-real-estate/ Real estate is the best way to grow wealth, period.  If you want to get super rich, then get involved in real estate.

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 5th 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!

Be great,

GC

]]> Lottery Money https://cardonecapital.com/2018/10/29/lottery-money/ Mon, 29 Oct 2018 16:45:37 +0000 https://cardonecapistg.wpenginepowered.com/2018/10/29/lottery-money/ We live in weird and uncertain times where most of the world can’t buy a house.

Seventy-five percent of all Americans are living paycheck to paycheck.

Even with most Americans feeling more financially secure than they did five years ago, forty percent can’t cover a $400 emergency expense.

And yet, people spend more money on lottery tickets every year ($80 Billion) than the combined earnings of Starbucks, Burger King, McDonald’s and Taco Bell…

Imagine, a guy wins $1.6 Billion on a $2 ticket and unfortunately won’t know what to do with it.

I know what I would do.

I would use my $1 Billion to buy $4 Billion in real estate and collect $80 Million in positive cash flow per year while I wait to either pay off the $4 Billion with renters’ payments or for the property to appreciate… or both.

Most lottery winners go broke because they stay liquid. Money that sits around will always find a new home.

Read the stories of past lottery winners. A majority of them kept the money in the bank and spent it. Sharon Tirabassi, a single mother, won $10 million eleven years ago and spent her money on parties, trips, designer clothes, a big house and fancy cars. She is back to riding the bus, working part-time and living in a rented house. Bud Post won $16.2 million and was $1 million in debt within a year.

And it’s not just lottery winners. If Floyd Mayweather would put his money into illiquid assets that produce cash flow (real estate) after each fight and then live off the cash flow he would never go broke again.

Invest in real assets that produce cash flow and wait.

Do your homework and invest with someone you know and trust and in assets that are the right size, right location and right price.

I promise you will never regret it.

Cardone Capital was created for those who don’t want to lose their money, value cash flow and can’t wait for appreciation.

Want to know more? Look deeper at Cardone Capital and look at all of my real estate content, programs and courses.

Source: Federal Reserve Repot on the Economic Well-Being of US Households in 2017

]]> The Top Ten Things You Must Know Before Getting Started Investing in Real Estate https://cardonecapital.com/2018/08/13/10-things-to-know-to-get-started-investing-in-real-estate/ Mon, 13 Aug 2018 18:39:41 +0000 https://cardonecapistg.wpenginepowered.com/2018/08/13/10-things-to-know-to-get-started-investing-in-real-estate/ 1. Know Real Estate Is Your Plan. Know what investment vehicle you are going to concentrate on. And once you know what it is, know absolutely everything there is to know about it. If you are awake you should be studying, investigating and learning all there is to learn. If real estate is what you choose, then you should learn all about the type of real estate you are going to invest in, the location, financing, deals, the power players, the economy of the area, and on and on.

2. Shop The Deals.

Again, you need to do your homework. Identify which deals are currently on the market. What deals are under contract. How long and how many deals are open at any given time? Where are the deals? Are they where you want to invest? Studying these deals gains you market knowledge and lets you spot insider area trends.

3. Find Deals That Are For Sale.

If you’re driving around and you see an attractive property call the property to see who owns it. Find out how long it’s been under the same ownership. Find out what else they own. Pull tax records and other public information. Usually, property that’s been owned for a certain period of time is most likely going to be up for sale or be on sale. Don’t limit your search to what is simply on the market. Expand and tailor your search to what you love and what you’d want to own. Property under contract can still be purchased if the price is right. You just have to know what you want.

4. Contact.

Make contact with the broker, seller or whomever you need to. You need access to the deals and market and more than likely you need an insider and someone in the business. Brokers are hard to track down and in my book, How to Create Wealth Investing In Real Estate, I tell you more about how to work with them. Making contact is an important step in getting knowledgeable about investing and it’s worth studying and learning how and who to talk to.

5. Learn/Make a Pitch.

Put together your sales pitch. Decide how you are going to convince the person to sell to you over someone else who has more history and experience. Write down what you love about the property. Create your script and story about what you want to do, how you see it fitting into your portfolio that you want to build, what about the location is perfect, and what price are you willing to pay for it.

6. Underwrite Your Deal.

Do your due diligence. Determine financing, money and exactly how much cash flow the property will produce. Plan your exit strategy – who will buy this when you are ready to sell? Plan out your operating expenses, your EGI (Effective Gross Income), your NOI (Net Operating Income) and CAP rate. Don’t be afraid of the big deals.

7. LOI (Letter Of Intent)

You don’t need a lawyer for this letter, it can be very simple form letter you get off the internet. Think of it as your offer letter. The main message: I’m going to buy your property from you for this much money.

8. Financing and/or Investors.

You should always use some form of leverage (debt) on your deals. It makes the most sense. Make sure to arrange your financing and know the terms of what you intend to do. If you don’t have the patience, aptitude or time to get your capital together, you’ll need to look for investors. Either way, you are going to have to sell yourself.

9. Legal.

At some point, you will need to involve a lawyer for the transaction. Again, this can be as simple or complex as you make it. On a deal, your bank or financing institution will tell you what your legal documents and setup needs to look like. Don’t think you need an LLC or corporation right off the bat without doing some homework and research to exactly what you need and what your exposure is.

10. CLOSE.

This is actually doing the deal! Sign the papers and take ownership. It will be the best and scariest day of your life! GC, CardoneCapital.com ]]> Underwriting Real Estate: What Does It Really Mean? https://cardonecapital.com/2018/08/06/underwriting/ Mon, 06 Aug 2018 18:42:27 +0000 https://cardonecapistg.wpenginepowered.com/2018/08/06/underwriting/ What does it really mean to underwrite a real estate deal? In real estate, underwriting is defined as: When an individual or business entity seeks funding for a real estate project or purchase, the loan request is scrutinized by an underwriter to determine how much risk the lender is willing to accept. These types of underwriters are not to be confused with securities underwriters who work to determine the offer price of financial instruments. Real estate underwriters take into consideration both the land and the borrower. The United States Department of Housing and Urban Development (HUD) defines underwriting as “the process of analyzing a loan application to determine the amount of risk involved in making the loan; it includes a review of the potential borrower’s credit history and a judgment of the property value.” In most real estate loans, the property itself is used as collateral against the borrowed funds. Underwriters generally use a debt-service coverage ratio (DSCR) to determine if the property is able to redeem its own value. If so, the loan is a more secure proposition, and the loan request has a greater chance of being accepted. So, underwriting is really fact checking and part of the due diligence you should be doing to determine if the deal is worth pursuing. Underwriting can happen several ways and it’s the underwriter who will recommend the debt that is appropriate for the property to carry.

Approaching Underwriting

When approaching underwriting, you should be doing it, and a third-party with no ties to the deal should look at it too. For example: 1. I always underwrite my own deals. I scrutinize all of my deals. 2. I send to a third party. My advice is to send to a broker, one separate from the deal and with no knowledge of what I did in my underwriting process. 3. WCS (Worst case scenario). Underwrite to the worst possible outcome. Use this on every approach. 4. Real Estate Broker (I actually don’t place too much credence in this one because they usually don’t factor in the WCS.) In my first deal, I had no idea how to underwrite the deal. If I had, I would have never done it. That deal was a single-family home. Big mistake!

How Grant Cardone Underwrites On A Deal

Here’s an example of some of the formulas, math and calculations I use when I’m doing underwriting on a deal. I look at the Gross Schedule Income, GSI. This is what rent is projected to come in. Again, this is projected so it’s not actual, so I only look at it. I study and pay attention to Effective Gross Income, EGI. This is what rent actually comes in. I always use EGI. From this number, I’ll deduct 50% for operating expenses. I know it won’t be this large of a percentage, but I’m working in the WCS (worst case scenario) zone. The resulting number is the Net Operating Income, NOI. I then take the NOI and divide it by the asking price, or the price I think I can acquire the property at and that number is my CAP rate. A CAP rate is short for Capitalization rate. This term is defined as a rate that helps in evaluating a real estate investment. Cap rate equals NOI/Current market value (sales price) of the asset. So, the CAP rate shows the potential rate of return on the real estate investment. On brand-new property, your EGI won’t exist and you will have to project what your rent will be once the property stabilizes. That means once it ramps up and occupancy increases. Another factor to use in your calculations is projecting how much your rent income will grow and how much your expenses will grow as you hold the property over a ten-year period. I use ten years because I know I typically hold a property that long if not longer. I calculate that rent will increase two percent each year while expenses will grow at three percent. That’s fine that expenses grow one percentage faster because you have to remember that your operating expenses are only half of the total of income. So, two percent on one-hundred percent will always be more than three percent of fifty percent. Or course, you have to pay attention and know many other factors like interest only compared to principle and interest loans. Calculating how much your tenants pay down your debt over and over again and more.

Conclusion

My advice is to not be afraid of the bigger deals. Small deals don’t pay enough. The largest portion of billionaires in this country have their money invested in real estate. Shop, research and walk your potential deals.

Think big. Go big. Play big and know what you’re doing.

GC, Cardone Capital. ]]>