Grant Cardone 30 Dec 2023 Training Analysis

Last time I broke down the key claim of yesteray’s Grant Cardone Webinar. I designed it to be read in two minutes. Now i’ll analyze some of the claims.

The core idea was buy multifamily real estate with a high enough Net Operating Income (NOI) to pay off a loan. NOI is the net profit after expenses but before any debt service. According to Grant, after you buy the property with the high NOI, then you increase the rent, which makes the property more valuable, and you can sell the property or better yet take a loan off the new valuation. Let’s examine some of those claims.

Get a loan for a million dollars. Once you get past four units, the banks start thinking of you as a business. They want you to have at least 12 months of profit and loss for your real estate business … which you don’t have yet. This leaves you with a “chicken and egg” problem. You need real estate experience to get the loan, but to get the experience, you need a loan.

Put 5% or less down on the loan. There is a new 3.5% down payment program for 2, 3, and 4-unit homes, where the owner lives in one of the units, from Fannie Mae. This came out in November. Unless you live in San Francisco or New York, these won’t get you to a million dollar valuation. If if they do, having to live in one will drag your profit down. I’m not sure what Grant is referring to here. The down payment is the banks protection against someone running off. Typical multi-family loans require 25% down. And the bigger plays do tend to get a qualified…