- A place to protect and grow money
- Data consumption and real estate purchase
- His first deal
- Later acquisitions
- Financing its acquisitions
- The Bottom Line
At the age of twenty-five, Grant Cardone came out of a rehabilitation center after a battle with drug addiction. Five years later he became a millionaire. Today, at age 58, Cardone is an internationally known sales trainer. His main company, Cardone Training Technologies, provides Fortune 500 companies, small businesses and entrepreneurs with an interactive sales training platform.
While he is best known for his success in helping companies increase revenue, Cardone has almost single-handedly built a real estate empire over the past two decades. Its investment vehicle, Cardone Acquisitions, has been involved in more than $425 million worth of real estate transactions, and the company currently holds $350 million in multifamily properties throughout the U.S.
Here's an overview of how Cardone built his multi-million dollar real estate empire without raising outside capital from people outside his close family members, who own less than 2% of the Cardone Acquisitions portfolio.
A place to protect and grow money
Unlike the majority of individuals with successful real estate empires who successfully built their extensive portfolios as a full-time career, Cardone's real estate holdings slowly became a side business. Cardone Acquisitions should not be his main business nor his main source of income. Instead, it was created so he would have a stable place to keep and grow the money he made from his sales consulting firm.
In a February 2015 interview with the BiggerPockets podcast, Cardone said, "Every time I get money, I go broke again because I put it into this real estate thing [Cardone Acquisitions]. "He went on to explain:" I take these three businesses that are probably going to be destroyed in my lifetime that I made a lot of money off, and I take all the money and I park it here so that I can always These three have gone broke, or I have to scramble every day to get new money, and then I push it in here. "
Although he considers himself an entrepreneur at heart, not a real estate investor, Cardone believed that real estate provided a wealth preservation and creation vehicle that his other business ventures could not offer. (For more information, see The top reasons to invest in real estate .)
Data consumption and real estate purchase
Since the age of fifteen, Cardone has studied the real estate islands. During his childhood, Cardone and his father regularly visited various properties as a family outing, and over time his interest in buying properties developed.Shopping real estate to this day is something he enjoys doing with his wife and kids.
In 1981, at the age of 22, Cardone graduated with a degree in accounting. Although he wanted to acquire real estate immediately, he delayed doing so for several years. This allowed him to grow the money he later used to make investments. In addition, Cardone provided Cardone with the opportunity to get involved in real estate as best he could.
In an October episode of his real estate show, Cardone shared that the knowledge he gained about real estate investing, such as "understanding different terms like net operating income (NOI), what a pro forma is and what a good market looks like "didn't come from reading books, but actually" looking at different deals and meeting agents. " In fact, Cardone has never read a book on real estate investing: He has replaced the knowledge that can be found in books with knowledge that can be achieved by looking at listings in different markets. (For more information, see How much money you need to invest in real estate ? )
His first deal
At 29, Cardone finally put his more than 14 years of real estate to work in practice. Bought a single-family home in Houston, Texas, which initially did well. After a few months, however, the tenants left and Cardone's real estate income stream went dry. He often jokes about the experience: "My occupancy rate has dropped from 100% to 0%"." He hated that he had to focus on his main business to find new tenants. Fearing that this situation would recur, Cardone quickly sold the property, broke the risk and vowed that he would never buy single-family residential real estate as an investment again.
Late acquisitions
Cardone's second acquisition didn't occur until five years after his terrible experience with single-family homes. During this time, he continued to accumulate cash and increase his real estate investing knowledge base. His first multifamily deal was a 38-unit complex in San Diego, Calif. Cardone purchased the property for $1. 9 million and made a down payment of 350.000 $. A little over a month later, he acquired another complex. Cardone continued to buy more complexes individually, and today his holdings are estimated at $350 million.
His real estate holdings are located in Alabama, Arizona, California, Florida, Georgia, North Carolina, Tennessee and Texas. In 2012, Cardone Acquisitions made the largest private acquisition of multifamily properties in Florida. This year, he bought five housing communities with 1016 units for a total of $59 million. Much of the acquisitions were financed with Federal National Mortgage Association (Fannie Mae) debt.
Financing his acquisitions
In a March 2015 interview with Joe Fairless on a "Best Real Estate Investing Advice," Cardone shared that less than 2% of the Cardone Acquisitions portfolio is owned by outside partners who are his close family. Members and friends.The majority of acquisitions are financed with Cardone's private loans as well as traditional bank financing.
The Bottom Line
Grant Cardone, much more than a professional sales trainer, is a real estate mogul who built a multi-million dollar portfolio worth $350 million from the ground up. Before his first acquisition, Cardone spent several years consuming as much information as he could about real estate. At 29, he made his first acquisition, a unit property that initially performed well but soon became a disaster when its occupancy rate dropped to zero after the original tenants moved out. Years after that experience, he acquired a thirty-eight-unit complex and never again bought another single-family home as an investment.