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The Truth About Monopoly

Did you know the popular game Monopoly had leftwing, communist origins?

In 1903 a feminist named Lizzy Magie didn’t like what she saw as problems during the latter half of the 1800’s with income inequalities.

She wanted a board game to play that would reflect her political views.

Believing the system of “land-grabbing” had bad consequences, she named her new board game “The Landlord’s Game”.

The version Magie originated did not involve the concept of a monopoly; for her, the point of the game was to show the potential exploitation of tenants by “greedy” landlords.

Here’s what it originally looked like:

Luckily, a man named Charles Darrow sold a similar version of the game rebranded to “Monopoly” in the 1930’s to Parker Brothers, and it became a phenomenal success, eventually making him millions.

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

But would this game have been successful if the goal of the game were to redistribute the property and the money to less fortunate players?

Could you imagine… playing the game where your properties got seized if you got too rich, or paying ridiculous high taxes so that all your income got redistributed among the other players?

Nobody would play that, because nobody likes to work hard only to let others enjoy all the benefits of their labors.

This is why all board games have a winner, it gives players a goal to shoot for.

You want to win, right?

And here’s the deal— sometimes life isn’t all that different than a board game.

If the object of your game right now is to accumulate wealth, then good for you.

That’s a noble ambition.

Play to win!

Some people will criticize you for it, but last I checked, we live in a capitalist society in the United States.

There’s nobody stopping you from getting Park Place or Boardwalk.

In the game of Monopoly, if someone lands on this spot late in the game, when you have a hotel, the rent is $2,000.

Game over.

There’s a reason why places like Baltic Ave. are cheap—it’s a low level property and you cannot set your winning strategy around it.

It’s a simple concept and everyone can understand:

Expensive properties yield higher rents, cheaper properties yield lower rents.

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

What gives a property value? Cash flow.

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

That’s why at Cardone Capital we go for high end, luxury, multifamily apartment buildings.

Because we’re not playing with Monopoly money—we’re playing with our own money, and we’re playing to win.

And when you invest with us, you can win too. Because your monthly distributions won’t be sent to others—that monthly check will come to YOU.

Every month, you just pass GO and collect your money.

Find out more how you can invest at Cardone Capital HERE.

 

Be Great,

GC

Our offerings under Rule 506(c) are for accredited investors only.

FOR OUR CURRENT REGULATION A OFFERING,  NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

For our anticipated Regulation A offering, until such time that the Offering Statement is qualified by the SEC, no money or consideration is being solicited, and if sent in response prior to qualification, such money will not be accepted. No offer to buy the securities can by accepted and no part of the purchase price can be received until the offering statement is qualified. Any offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date. A person’s indication of interest involves no obligation or commitment of any kind. Our Offering Circular, which is part of the Offering Statement, may be found at www.cardonecapital.com

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How to Earn $50,000 a Year in Dividends?

My entire life I have been fascinated with the idea of earning passive income. I once read a quote by Warren Buffet, saying, “If you don’t find a way to earn money while you sleep, you will work until you die.” This really hit home for me because my dad died when he was only 52 years of age. When he died so did the income from his job.

I have spent years of my life researching the types of investments that would provide passive income for my family, charities and myself even if I wasn’t working. I wrote the characteristics of the investments so I could hone down to something I was comfortable with. The first requirement was to…

(1) secure the money I had earned,

(2) provide passive monthly income, and lastly

(3) increase in value over time.

I started studying stocks, dividend stocks, bonds, bank CDs, real estate, and other alternative investments. I quickly found most didn’t provide 1 and 3.  I am a coward when it comes to investing and just simply can not handle the idea of losing what I have worked so hard to get.

And this is what got me so interested in real estate.

When you invest in cash flow producing real estate it is very difficult, almost impossible, to actually lose your initial capital because someone will always want to purchase the cash flow.

Unlike a home you live in, commercial real estate’s future value is determined by its ability to provide cash flow to investors. The future value of a stock is dependent upon many more conditions: politics, technology disruptions and developments, economics, market conditions, and more.

As long as you pick real estate in markets where rents continue to grow, the value of the property should do the same. Unlike stocks, real estate can provide monthly distributions to its investors. The best-known dividend stocks in the world: Coca-Cola, Walmart, & AT&T, pay quarterly, not monthly.

So, let’s do some real practical math to compare investing in stocks vs real estate. You can do the same math with bonds and bank deposits. Let’s say you want to earn $50,000 a year in passive income and want to know how much you would need to invest to do so.

Here is the math – Take your desired annual dividend income amount and divide by the dividend percentage.

Desired Income / Dividend Yield = Amount of Investment Required

Let’s say you want to know how much Apple stock you would need to buy to earn 50,000 in dividends.

Take the $50,000 and divide by the .0171 dividend yield to get $2,923,976 of Apple stock. Call your buddies at Merrill Lynch and send them a wire for 2.923,976 and cross your fingers and wait for the stock to go up.

Compare that to how much would you need to invest in real estate to earn the same $50,000?

At CardoneCapital.com we offer myself and accredited investors a 6% preferred cash on cash return.

To determine how much money you would need to invest with Cardone Capital to earn $50,000, simply divide the $50,000 by 6% = $833,333.

This is what hooked me on real estate, but it gets better than that.  An even bigger benefit is that your $833k investment buys 3X the real estate or $2.4M. Because real estate provides stable cash flow, banks are willing to provide investors with leverage allowing you to buy 3-4X the real estate.

The bank knows the debt will be paid off by the real estate’s income paid by tenants. You typically can’t borrow money from the bank to buy stocks.  You can buy on margin, but this is very risky. It’s crazy to think I can get a loan from Bank of America to buy real estate but not to buy Bank of America stock. (Let that sink in.)

When I realized I could buy three times the real estate through leverage, earn monthly returns and reduce my risk of loss of capital I made real estate my investment of choice. Warren Buffet also says, “Invest in what you know, nothing more.”

Clearly, real estate—like stock—can go down in value due to cycles or economic troubles, but if you don’t over leverage (borrow too much) and are still paid monthly from cash flow you can wait out the cycles.

During 2008, during the housing collapse, the cash flow from my apartments went up, not down, and got me through 2008-2009-2010.

Real Estate will be still be there when stocks can go to zero or the businesses are no longer relevant. Remember Circuit City, ToysRUs, Sears, Kmart, Lehman, Blockbuster, and on and on.

Now let’s do a little more math. That $833,333 you invested over ten years would have paid you 60% on your investment. 6% x 10 years assuming the rents never went up. And if the rents go up then the value of the property goes up.

My first serious real estate investment was $350k and I bought a property that was worth 1.9M at the time. I earned 12% per year and owned it for four years. By year four, the property had earned almost ½ of my investment in cash flow. A buyer came along and offered me $6M for the property that I had paid 350K for. My partner and I made more money on that one deal that we had ever made from my main job, but the thing I was most excited about…

I was paid passive income while I waited. This took the fear out of investing for me.

Let me know what your take-aways are or where I might have missed something. Certainly, if you had bought Google, Netflix, Amazon, or Bitcoin when they were first coming to market you would have made a lot of money, but this article isn’t about making money, it’s about how you can create passive income of $50,000 a year.

CardoneCapital.com is now open for accredited and non-accredited investors whereby we buy institutional quality real estate and allow the average investor to get access to extraordinary real estate typically owned by major financial institutions. For more information go to CardoneCapital.com

Grant Cardone

CEO, CardoneCapital.com

Grant Cardone is a New York Times bestselling author, and an internationally renowned speaker on leadership, real estate investing, entrepreneurship, social media, and finance. His 5 privately held companies have annual revenues exceeding $100 million. Forbes named Mr. Cardone #1 of the “25 Marketing Influencers to Watch.” He currently resides in South Florida with his wife and two daughters.

Our offerings under Rule 506(c) are for accredited investors only.

FOR OUR CURRENT REGULATION A OFFERING, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

For our anticipated Regulation A offering, until such time that the Offering Statement is qualified by the SEC, no money or consideration is being solicited, and if sent in response prior to qualification, such money will not be accepted. No offer to buy the securities can by accepted and no part of the purchase price can be received until the offering statement is qualified. Any offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of its acceptance given after the qualification date. A person’s indication of interest involves no obligation or commitment of any kind. Our Offering Circular, which is part of the Offering Statement, may be found at www.cardonecapital.com

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Why Private Equity Real Estate Funds are Superior to Private REITs

Real estate investing is an increasingly favored method of wealth-building, and there are multiple ways today to invest in private real estate.

Investors who don’t want the responsibility of managing tenants, toilets and termites themselves choose either private equity funds or real estate investment trusts (REITs).

High net worth individuals holdings in PRIVATE real estate hits record highs. A Tiger 21 reported by Bloomberg of high-net-worth investors showed they had an average of 33% of their portfolios in private real estate investments.

Traditionally, private equity real estate opportunities have only been available to institutions.

Early on I founded Cardone Capital to allow my wealthy family and friends to invest alongside me. Today, we have opened this opportunity of providing institutional-grade commercial real estate properties available to both my wealth “accredited” investors and all my friends who follow me on social media who are non-accredited.

My personal success investing in real estate over thirty years now is a testament that private equity real estate funds are smart investment vehicles for those who want to protect their wealth, create passive income flows for themselves and their estate while they patiently wait for appreciation through rent growth.

Just this year we created two funds for our investors, one which produced a 121% return to investors in under 42 months and the other did 3.45 X return on capital invested. That’s 345% over a four year time period.

Over my career investing in a very specific real estate type I have achieved well over the 15% annualized net returns we promote in our offerings.

While I can’t guarantee this level of success, I believe for many reasons the private equity real estate fund will almost always out achieve the private REITs for a variety of reasons.

1. Fees to Promote Funds.

Private REITs have been notorious for their high fees—with many sharing 10% with brokers. This upfront expense becomes almost impossible to recoup and offers no value to the properties or investors.

In fact the Financial Industry Regulatory Authority (FINRA) now requires private REITs to provide statements to investors showing this drop immediately. This disclosure and public awareness apparently had a negative impact with the public, with private REITs raising almost eighty percent less in funds.

Meanwhile, more cash is flowing into private equity real estate, like Cardone Capital. I refuse to pay any fees or commissions to brokers, reducing ALL the cost of middle men.

My company uses social media crowd funding to create awareness of the deals we are investing in. That way ALL of the investors dollars are invested in the properties.

2. We Buy, Then You Invest.

With a REIT you invest money upfront before the properties are purchased and most of the time you don’t know what property you are invested in.

With the REIT the theory is you buy a diversified pool of properties, but in practice, REITs don’t start off with a pool of properties and they must start paying dividends to their investors— so, REIT managers have the propensity to invest in properties to generate dividends to pay the investors.

Instead, an entrepreneur-run private equity real estate fund seeks property that provides all the conditions of a great investment; cash flow, location, job growth, rent growth and view of the future so you can exit with a profit.

3. Tax Advantages.

With a Real Estate Investment Trust the investor is invested in a convertible stock certificate unlike the private equity investment that makes the investor a partner in the property, with the full backing of the real property.

In a private equity fund you are a partner in the property rather than a holder of a piece of paper.

The tax implications provides a massive benefit to the investor of a private equity fund over REIT.

4. Monthly Cash Distributions.

Private REITs typically pay every quarter whereas a good private equity firm who manages cash flow and is personally invested in the properties is motivated to pay investors out monthly as they are motivated to pay themselves.

As a real estate operator investing in a property I want to be paid monthly. If there is cash flow I demand we distribute monthly to the investors.

5. Private Equity Mentality vs REIT Mentality.

The mindset of of private equity fund manager is about investing in real property, not the day to day value of a piece of paper created by Wall Street.

In REITs profits take a back seat to Fees. REITs generate most fees through transactions and the SEC warns that deals can be struck just to generate fees.

The private equity fund manager is driven by finding the right real estate assets that can produce cash flow over long periods of time and create appreciation for the fund manager and the investors.

Whereas the REIT mentality is fee driven whereby they get to keep their jobs and fees are based on trades not the asset itself.

The mindset between the daily value of a piece of paper and the long term operation of a property changes everything. As an asset operator and manger, I am interested in maximizing the growth potential of the property through rent growth and then finding the right buyer at the right time to exit to accomplish our targeted internal rate of return.

6. Taxes.

One of the great benefits of real estate investing is the number of tax advantages provided through depreciation and long term capital gains.

REITs do NOT share these tax advantages with its investors and instead each year send you a 1099 form, as though you work for them.

The private equity firm passes all tax benefits on to its investors, including depreciation and capital recapitalization, while REIT payouts are taxed at an investor’s higher ordinary income rate and no depreciation deductions are passed on.

Lastly, The Journal of Wealth Management points out REITs have underperformed the market over the last 10 years.

How To Get Started

Although most private equity real estate funds are available only to institutional investors, there are a number of crowdfunding real estate websites but very few of which offer partnerships to both accredited and non-accredited investors.

While it can be overwhelming to separate the good real estate managers and investments from the bad, investors should do their homework. When doing your research ask about the Deals you are investing in, not just the terms.

Lets face it, your upside in real estate is determined by the real estate.

At Cardone Capital, I personally look at a hundred deals to put a few under contract. And when I do, I assume I am invested in this asset whether anyone invests alongside with me. Look for funds that are investing in the products they are promoting.

Also, the more transparent and available the executives are the better.

Pictured above, Stella at Riverstone—Cardone Capital’s most recent acquisition.

Always choose investment firms that provide transparency and availability regardless of the size of your investment. When discussing fees, be interested in how the fund manager is compensated.

Are the fund managers driven by fees or compensated by profits?

It has always served me to pay the fund manager on profits!

Be great,

GC

 

Our offerings under Rule 506(c) are for accredited investors only.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

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How to Write an Offer

People get into real estate because they want to get their P greater than their E.

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!

Be great,

GC

Our offerings under Rule 506(c) are for accredited investors only.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

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How to Compound Your Money

The ‘Rule of 72’ is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest.

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 21st 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 21st century.

Be great,

GC

Our offerings under Rule 506(c) are for accredited investors only.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

 

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Single-Family Vs. Multi-Family

A home is the American dream, right? A white picket fence, a yard for the kids to roll around in, and setting your roots down for 30 years—it sounds so appealing to many people as an investment.

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.

Be Great,

GC

Our offerings under Rule 506(c) are for accredited investors only.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

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How to Use Leverage

Extreme money. There’s no other way to put this.

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!

Be Great,

GC

Our offerings under Rule 506(c) are for accredited investors only.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

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How to Get a 3X Return

Will Rogers once said, “The quickest way to double your money is to fold it over and put it back in your pocket.”

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.

Office-CardoneCapital

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

Be Great,

GC

Our offerings under Rule 506(c) are for accredited investors only.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

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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,

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How Real Estate Made Jarrod Glandt a Millionaire by 30

You don’t need to know anything about real estate to make huge money in real estate. My VP of sales Jarrod Glandt is proof of this.

He’s busy working at his job, he’s working hard all week helping me run my business, so he can’t have his attention, time, and energy on two masters.

In other words, Jarrod doesn’t know any of the details in how to do a real estate deal, he probably doesn’t even know what certain real estate terms mean, such as NOI (net operating income).

He’d have no idea how to find a broker, no idea what to look for and what NOT to look for when buying an income-producing property, and no idea how to run a property if he ever did land one.

But, he’s making big money FAST in real estate.

How?

Cardone Capital

I’m in Houston today looking at new multi-family apartments to invest in for Cardone Capital investors—guys like Jarrod who know nothing about real estate but who are investing alongside me and making BIG money.

Since I’m in Texas, I told Jarrod to do my weekly Real Estate podcast in our Miami studios.

Here are Jarrod’s 3 tips to become a millionaire by 30:

#1 Income is key.

This is the fuel to your car. You can’t get rich without feeding investments. Income gets you in the game.

Before you can invest in real estate, you need to make enough income to invest something!

By the way, you can invest in Cardone Capital for as little as $10,000.

#2 Commitment long-term.

Over time is how real estate works. You can’t be impatient in this game.

This isn’t the lottery where you’ll be a millionaire tomorrow, but it is the lottery over time.

If you want to 10X your money, if you want to retire one day, stick your income into a long-term property that will pay you cash flow each month and appreciate in value.

#3 Mitigate risk.

The stock market is a casino. You want your money where it will not only give you cash flow, but it will mitigate your risks!

Too many young people throw all their money at risky investments and lose it all.

Real Estate is a proven investment vehicle that has made many people wealthy.

Learn more about Cardone Capital and how you too can invest in real estate—even if you know nothing about real estate!

Be Great,

GC

Our offerings under Rule 506(c) are for accredited investors only.

GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV.

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