Real Estate Investment Lessons from Analyzing Grant Cardone
Real estate business is one of the most lucrative businesses on the market right now. If you are good enough, you can really make a lot of money.
But, if it were that easy, everyone would do it, right?
That is true, and that is why we are here today, to help you enter the real estate business on your own and try to make a fortune for yourself and your family.
And there is no better way to learn these things than to get an overview of one of the most successful real estate entrepreneurs out there, Grant Cardone, who have managed to amass great wealth almost single-handedly.
So, strap it and let us see who Grant Cardone is and why he is so important when it comes to real estate business.
WHO IS GRANT CARDONE?
If you are new in the field of real estate investments, then you are probably wondering who Grand Cardone is. So, let us find out!
Grant Cardone is an American real estate investor, who managed to fight his way up the top real estate people ladder and become one of the most successful and known people in the field.
He did it with hard work and a lot of commitment, which, of course, wasn’t a pet walk, and oh boy, he still managed to pull through and live his dream.
Grant Cardone was born on March 21, 1958, in the state of Louisiana, where he lived with his mother and father.
His father has always taught him to be hard-working and to value family above everything else in life because eventually, love of the people close to you is what really matters.
To Grant, his father was the role model, the person who he glorified and respected above everyone else, which already tells us what kind of person Grand Cardone is.
When he was 10-year-old, his father suddenly passed away due to heart attack and because of that, their happy lifestyle vanished as well, because his father was the person who provided for his family by himself and his mother was not the same after the tragedy.
She started to live in constant fear of losing everything they had; no matter how little it was at some point, so she had been focusing more on saving the money than earning additional income.
As for Grant himself, he was also very struck with by his father’s death, because he lost the most important person who guided him that far, and it is never easy for boys to grow up without their fathers because, no matter how good parent mother is, there are some things that boys could only learn from the male figure.
That said, without a person to guide him through life, Grant had some problems with the police and law, as well as with drugs.
We can say that at some point in his life, he was in a very rebellious state of mind, to say at least.
During his college years, his drug addiction became really bad and he himself said that every day he would wake up and decide not to use it, but after just several minutes, he would change his mind and take the drugs anyway.
Because of that, he hung out with some very bad people and eventually got into a big fight and was almost killed. His face and body were so deformed that even his own mother wasn’t able to identify him.
At the age of 25, he finally admitted to himself that he needed to get professional help, so he went and completed the treatment.
After that, he promised to himself that he would get better and completely change his life upside down.
He started working jobs he didn’t quite enjoy, mostly sales, more specifically selling the cars, because he wanted to experience the feeling of doing jobs he didn’t like, so when he really finds something he enjoys, he could turn around and say how he managed to live through the worst of the worst.
As we have mentioned, Grant did go to college, managed to graduate with a Bachelor degree in Accounting, after which he started working as a salesman, because he never truly liked being an accountant.
Since he hated the car sales job, he was determined to save all the money he had been earning and eventually he managed to save a large amount of money to invest in real estate business, which is the field for which he became really famous.
After he has already gotten a lot of success, he started to do some additional things.
He started to write books, organize meetings and sales training, since he was one of the top 5% of the car salesman at the time, so he had enough experience in that regard.
Right now, at the age of 60, Cardone is one of the most popular and internationally acclaimed sales trainers out there, with several Fortune 500 businesses, a lot of small firms and individual entrepreneurs in his pocket.
His books “The 10X Rule” and “If You’re Not First, You’re Last” became one of the most selling books about how to achieve great success in real estate business.
Apart from that, he has managed to build a huge real estate empire, with a total worth of around $900 million.
His main business, Cardone Capital, is tasked with covering a lot of properties across the entire United States, with the total worth of transaction of around $800 million.
So, let us examine what real estate strategies did he use and how do they work.
HOW DOES IT WORK?
The main reasons Grant Cardone is so interested in investing in a real estate business is because of the specific nature of the real estate market and its ability to be much more stable when it comes to evaluating the property when we compare it to the very volatile nature of the equity market and cash flow in general.
It is like that because real estate market offers some benefits that come in different forms, like the rent, amortization of the property, tax policy that includes depreciation and the possibility to leverage your sales, in which case it is possible to get the property cheaper and sell it for a much higher price.
The way it works is that Cardone’s organization raises the money from the people by having public equity funds that are used in a way where individual investors could buy shares or even units.
Then, all the money that was collected goes the same way and is used to buy certain properties that look promising and which could possibly be sold to generate additional income.
All the earnings are then distributed amongst all investors and they usually choose to get paid on monthly basis through the dividend options.
As for the purposes of maintaining those properties, Grant Cardone offers complete liberty to the investors when it comes to that topic.
He himself manages everything regarding the maintenance, which is very useful to the individual investors, because they could just not think about that and focus on getting that monthly income from their investments, without losing the focus on their main jobs.
That fact can be used to build up your own wealth in a long term, without having to quit your current job and doing the investment on the sides, which is very important for the people who don’t want to leave their main jobs and just focus on the real estate investments.
WHAT CAN WE LEARN FROM GRANT CARDONE?
Now that we have explained in short how Grant Cardone’s formula works, let us get into the real thing by analyzing it with more depth.
1. Real Estate Investment as Side Business
The very first thing we have to notice here is that Grant Cardone didn’t start doing this job by fully focusing on it and putting it as his main business.
Instead, he did it on a side, slowly building it over time and growing it to become a massive real estate empire.
Cardone decides to get into real estate investment because he wanted to get some additional income for himself and his main business, which was the sales consulting company.
One funny thing that happened was an interview he had with the Bigger Pockets Podcast, where he had explained how “broke” he was every time he would come to get some amount of money because he would immediately have to put that money into his real estate business.
He did say that those companies he invested the money did prove to be very lucrative and got him a lot of money, but still, he said that no matter how much money they bring back, there is always something else to invest in, so he would always end up broke either way.
In the end, he does admit that without his real estate investment, he wouldn’t be able to preserve some of his other businesses, because they wouldn’t be enough to provide enough money to suffice themselves.
2. Start Early to Learn About Real Estate Investment
Grant Cardone claims that if you want to be in a real estate sector, you have to start as early as possible, so you could learn everything you need to know about it, in order to become very successful real estate investor.
He says that, even though he had graduated and got his Bachelor degree in Accounting, he actually did not learn anything useful about real estate investment during his college years, but only through practical work in the sector.
Before his father had passed away, they would go around the neighborhood together and look for promising properties they could get and get a nice return on investment.
Even after his father died, he continued doing the same and managed to learn how to get a good deal on a certain property.
He learned from different real estate agents and got the basic knowledge of how net operating income works.
One very interesting thing is that he says he has never read a book about real estate investing at all, and that he has learned everything through practical experience on the field.
That allowed him to meet a lot of people, both influential and regular, to learn how they think, how to act in front of different types of people and how to eventually close lucrative deals.
3. Acquiring Your First Property
When you are starting any business, it is important that you are very careful about anything, especially what to do and how to do it.
In real estate business, it is very important to start good, so you would have to choose your first investment carefully, so you wouldn’t waste all the money you have saved in order to start the business.
Apart from that, it could take you a lot of time to save some money to even begin with, in case you don’t already have some savings before you decide to enter real estate business.
Grant Cardone started his very own real estate business at the age of 29 when he was sure he learned enough about it and saved enough money to invest in the type of property he wanted.
His first investment was a house fit for a single family in Houston. It turned out to be very lucrative at first, but when the tenants decided to leave, he had a hard time to find new people, because he also had to work his main job and he didn’t want to waste too much time on proper searching.
Before he lost all the money he invested, he decided to sell the house and promised to himself never to buy the same type of property ever again.
4. Don’t Rush to Expand Your Portfolio too Fast
People have always wanted to have a lot of money and to get rich as fast as possible, but that is not how business works.
Even in real estate investment business, it is not recommended to try to rush things and earn money as fast as possible.
Instead, what you should do is monitor the real estate market and try to take advantages of some positive situations.
That way, you could really strike some lucrative deals, depending on the actual demand for certain types of properties.
After his first experience with single family house, Grant Cardone didn’t jump right into the train to get a new property. Instead, he waited for several years to get another property for himself.
He managed to get more money to invest and learned a lot more than he had previously known during that time period.
His second investment was a property suited for not just a single family, but for more people.
It was seated in San Diego and it cost him $1.9 million. It might sound too much, but he did manage to reduce the price for around $350,000.
He got his next property just a month later.
Over time, he managed to get more and more properties and in 2012 he managed to get recognized as the person who had the largest private portfolio in Florida, with over a thousand complexes with the total worth of around $58 million.
5. Financing Your Business
In order for you to become a successful investor, you would have to have a very stable source of income to finance your business.
So, let us see what Grant Cardone did when it comes to financing his real estate empire because as you might have guessed, he needs a lot of money to do this.
During an interview with Joe Fairless, in March 2015, Grant Cardone was invited to talk about the topic of the best real estate investing advice.
Cardone said that only 2% of his entire portfolio is in the hands of external partners, out of which 99% of them are his close friends or members of his family.
What he claims, is that the majority of his business is financed by his own money, through Cardone’s Capital and traditionally by using bank loans.
This is a very important thing to notice because it shows us how crucial it is to have a business that is self-sustaining or supported by your other businesses if you have them.
That way you would be able to evade the huge debts and focus on expanding your real estate business.
WHAT IS THE PROBLEM WITH GRANT CARDONE’S METHOD?
Now that we have gone over the lessons Grant Cardone taught us, let us examine some negative aspects of his method and value the opinions of other people who don’t think Cardone’s method could be useful to everyone, but only to the people who already got some capital to invest into the real estate business.
Those people claim that Grant Cardone’s method is not friendly towards ‘No Money Down’ type of investing, which is basically true if we consider all the facts stated in this text.
Ben Leybovich and a couple of others says that no one can say that Cardone’s method doesn’t work at all, since there are a lot of positive examples, but they do say that a lot of people who would want to start their business in real estate investment simply doesn’t have enough money to apply Cardone’s method.
Grant’s Opinion About ‘No Money Down’?
Grant Cardone, and the people who think the same as he does, claim that ‘No Money Down’ is not a true way of investing, because real investing should be done differently.
He believes the continuous investment of capital is the most important attribute of what the word investment actually means.
And there is not much to argue about it since there are a lot of examples of how a large number of successful investors managed to succeed by using Cardone’s method to get rich.
Those people applied the following formula:
- First, they would start some business they like;
- Then, they would grow and expand that business, so it would grant them a large amount of money;
- And lastly, they would use that money, to buy some property which looks promising in the matter of being potentially profitable. That is done because money itself is taxed very highly, while some forms of property are taxed much lower so you would save a lot of money and have stable cash flow at the same time.
IS THERE AN ALTERNATIVE TO CARDONE’S METHOD?
Now, that all looks nice and shiny, but the statistics say that perhaps 1 in a 1000 people who use Cardone’s method actually succeed in their intentions, because it is not easy to do that and not everyone is capable of creating the successful business, because they either don’t have enough money, to begin with or they simply lack the knowledge required for it.
That’s why those people are looking for an alternative, which is ‘No Money Down’ method, which is very useful and helpful to a lot of people.
Real estate investing doesn’t require you to be a genius, but rather know some basic things about it.
If you would want to learn a bit more about ‘No Money Down’ method and how you could use it to start your own real estate adventure, check this podcast of Ben Leybovich, where he explains how to use this method to become a successful real estate investor and get enough money to perhaps apply Cardone’s method and become a multimillionaire.
That would be all folks! We have gone over everything that you need to know about how Grant Cardone managed to amass his wealth and what tips he has to offer to all of you who want to try becoming successful real estate investors and get rich.
It requires a lot of hard work and personal commitment, but eventually, it could pay off and you could end up living your dream, instead of being stuck in a lousy job that you hate and do only because you need to pay the bills month after month.
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