Real Estate Rules for Beginners – Robert Kiyosaki, Kim Kiyosaki, @GrantCardone

How Big Money Investors Think About Money , , , , , , , , , , , , , , , , , , , 0 Comments
Video Transcript

Welcome to Big Money Investing
Your Ultimate Destination for Learning From Big Money and How You Can Succeed Too!

Are you ready to take it to the next level?

Investing into sound investments like big money does. Subscribe to the Big Money Investing Channel

(upbeat music) – [Narrator] This is The Rich Dad Radio Show. The good news and bad news about money. Here’s Robert Kiyosaki. – Hello, Hello, hello, it’s Robert Kiyosaki, The Rich Dad Radio Show, the good news and bad news about money, and today, Kim is in South Carolina, I am in Scottsdale, Arizona, and we have a very special guest today, Grant Cardone, CEO of Cardone Capital, international speaker and entrepreneur, but more, he’s tearing up the real estate market. Anyway, welcome, Grant. Kim, anything you wanna say to Grant before we start? – Thank you for being on the show, Grant. You know, these times right now, all I keep hearing is, oh, the price of real estate is so expensive. It’s so expensive, and like in Arizona, well, yes, it’s expensive, but relative to other parts of the country, not so much. So really interested to get your take on today, what’s going on in the real, you’re the real estate expert, – [Grant] Yeah. – What’s going on in the world, and we’ve got a lot of subjects and ground to cover, so, excited to have you on the program. – Well, and just, I’m a huge fan of both of you guys, so, can you get it out of the shot, guys? – [Woman] Yeah, absolutely. (laughing) This guy does this every time, and I think he wants my attention. – This is the Grant Cardone Show, not your show. – Yeah, exactly. So, look, I think that, I’ve been buying real estate for 25 years. I think we’re in a super cycle that has never ever happened before in our lifetimes. And Robert’s laughing right now. He’s saying, oh, that’s too optimistic. But truly I do, I’ve been talking about this country would become a renter nation. I’ve been talking about that for 10 years, it’s happening right now. Also I do not think real estate is overpriced today. I think cap rates will compress to 50% of what they are today, and I think that people are underestimating the 3 trillion, $4 trillion that’s been printed. If you look at the amount of money that has been printed, and compare that to the amount of appreciation of real values in real estate, the property values have not kept up with the printing press. And we would have a long way to go before we’re over, we’re in any kind of bubble territory. Last thing is, the people that are buying real estate today are completely different than 2010. This has nothing, not even similar. These are wealthy people buying second and third homes. This is not a first time buyer. People are paying either cash or putting 50% down. In many cases, they’re putting down more than they’ve ever put down. And you also have investors that are buying real estate from end-users. They’re lining up all over Scottsdale. There’s 25 offers, this story is told every day. There’s 25 offers on a single family home. Everything’s going over asking, and the guy that gets the deal is an investor that has no intention of living there, but is gonna Airbnb the property. – Okay, so and the other thing is that Grant’s in Miami, with the hottest property market around, Kim and I are in Scottsdale, and we just closed on a property in Austin, Texas, which is the hottest of hottest. – [Grant] Yes. Yes. – But the point we wanna get to here is why people are moving, first of all, the migrations. And if I could shamelessly plug my book here, it’s called "The Capitalist Manifesto". It comes out, you know, it’s not really a real estate book, but it’s about why communism is taking over America, and has taken over cities like San Francisco. So it’s not about San Francisco, but one of the reasons people are leaving San Francisco is they have a chart of human feces. (laughs) Where are people living more human crap on the streets and people are leaving in droves. (laughs) And it’s kind of an interesting market. you know, that that would happen. Kim and I had to close a property in Portland, get out of it, because the tenants couldn’t get to it because there was so many homeless stacked up around it. Is that correct, Kim? – Yeah, and this was surprising, Grant. So, I called the broker thinking, you know, the market’s gonna be pretty depressed up there because of all the riots, and the homelessness, and everything that’s been going on. And I said, so we’ll probably just take a, you know, take a loss on this property. I’m okay with that. ‘Cause we just wanna get out. And she goes, "Are you kidding me? This market is on fire." – On fire. – Yep. People aren’t necessarily moving into Portland, they’re not moving into Portland from other states, but people in Portland are buying and moving up. And so we didn’t even have it listed. It wasn’t even listed and it sold for, actually we raised the price ’cause we had so many offers and so much interest, we raised the price and sold it without even listing it. But Portland, Oregon. It didn’t make sense to me. – But Grant, our tenants were complaining because they couldn’t get to the property. – That’s crazy. That’s crazy. That’s why we’ve been very selective about where we’re buying. I mean, we’re buying mostly blue states. We are in Austin. You know, I’ve been wrong about Austin so many times, like, (Kim laughs) I’m like, you can’t get any more expensive. And it’s gonna. It’s because we don’t understand the amount of pressure being, the amount of money and people moving to places that protect them from what they’re leaving. You know, New York, Illinois, New Jersey, everybody knows this story, but they’re not betting on the story. And I would just suggest to people, this story is not gonna change. The more mandates they put out, the more crazy politics that people make, the more they pressure landlords, the more eviction moratoriums they do, all of that stuff is pushing people and money out of New York, New Jersey, California, – Oregon, Seattle. – Anywhere the politics are crazy, regardless of what side you vote on, if they’re not protecting the money and the people investing money, that money will move and it’s moving to Arizona, Utah, Nevada, Florida, the Carolinas. Like it’s just gonna explode down here. Texas is on fire. – Thank you. So the other thing we’re talking about here is this, you raise a lot of money. And I meet so many people who say, I’d like to buy real estate but I don’t have any money. I say, you idiot, the reason you buy real estate, you’re supposed to use other people’s money. Any comments you’re gonna say about that, Kim? I mean, do we, there’s plenty of money out there, you wanna use a little of your own money as possible, right? – Yeah, and I’d like to hear Grant’s take on this and how you started with raising money, ’cause I hear a lot of people they think, oh, I’ll just raise some money. But without the experience, without the knowledge, you gotta take care of other people’s money much more carefully than you take care of your own. And it’s a huge responsibility to raise capital. So, how did you start raising capital? – So, the only other people’s money I ever used was the bank’s money. Like, you know, the idea of me going, borrowing money from my brother and my sister, my uncle, or much less the public, was so terrifying to me because you know, I knew that my money wasn’t at risk when I was buying multi-family. To me, like I’m not a gambler. I was in Vegas this past weekend and I’m betting $50 at a table, everybody, or the other two guys are betting 2,000, 5,000. And I know I’m worth 100 times what both these guys have worth together, and they’re looking at me laughing like I’m a coward. (Robert laughs) And one guy says to me, he’s like, "Man, I can’t believe you’re only betting 50 bucks." Like he knows I got 12,000 apartments, we have $4 billion worth of real estate. And he’s like, "Why are you only betting 50 bucks?" I said, "’Cause I don’t gamble." And I don’t gamble with my money, or your money. And so when I was buying multifamily, I didn’t wanna have to explain it to people. I’ve been a pro like crazy multifamily guy for 20 years, believing in it, and probably before it was really what it is today. And the first 4 or 5,000 units I bought with my own money. I basically used my other businesses to fund that. I went out, worked hard, grabbed money, and bought them. And then about six years ago, or five years ago, I guess, I guess my wife said, you need to let the people that follow you invest with you, along with you. And so we started looking at it, and we raised $6 million for a deal in about 60 minutes, and I was like, "Wow, that was easy." And it’s not family funds. Like you got, I’m not going to wealthy people. I’m not getting money from Blackstone or a family fund, I’m getting money from people that actually need the opportunity and can’t buy these big deals, they can’t find the big deals, really Americans, and you guys know this, most Americans get the leftovers in real estate. They get the single family house, you know, that we call "the dream", that you both know is a liability not an asset. They’re hoodwinked and tricked into believing it’s some big asset that they have, when it’s not, which I’d love to talk about that, because that makes people’s heads pop off. And the second thing they get is the duplexes and the 4-plexes, most of which all went back in 2010 to the banks. The stuff that we’re buying, these are massive properties. 80 million or $150 million. This deal I had up behind me a few minutes ago was $230 million. This is Blackstone quality, Goldman Sachs, JP Morgan-quality stuff. And we’re raising money from accredited and non-accredited, using Instagram, Facebook, this was not even allowed years ago. No brokers, no middlemen. Merrill Lynch can’t call me, Fidelity can’t call me, family funds are not allowed to call me and give me money. It’s like, you guys could call me and say, hey, I wanna put a million in your deal. Or, we just opened this up, $1,000. And we’re literally changing the way people can invest in multi-family, ’cause Kim, I agree with you, that to think that somebody is gonna go raise 2, or 3, or $4 million on their first deal, probably not real, and they probably shouldn’t do it. – So let me say this, much as the people, the actually easy part is raising the money. The hard part is managing the property. And I think that’s what people forget because when Kim and I first started out, the managing of property is the biggest business of all. But it all, if you’re just a mom and pop, you can only manage so many properties. So what is the secret to going from a small investor, to managing let’s say 150 units at a time? – Yeah, well, I would say, first of all, just skip the small stuff and go buy big deals. Even if you have to collaborate with somebody else to do the big deals, big deals always work better than little deals. Multi-family as you guys know, it’s all about math. It’s multifamily. It’s not one unit or two units. – But you make a good point Grant, because if you’re gonna start, I mean, so I started with a little two bedroom, one bath house, ’cause that’s how I learned, but if you’re gonna start with a big deal, then I would say, you wanna definitely have an experienced, knowledgeable partner in that. – Yeah, you’re not gonna get the deal. You’re not gonna get, in this market you’re not gonna get the deal if you don’t have the experience. – Yeah, exactly. So like, even in the 26-unit, and 30-unit, and 80-unit deals, you’re gonna pay a premium so heavy today to get that deal. This is so competitive now. There’s so much money chasing this yield. – No, that’s not, Grant, hang on one second. I wanna be very clear with people. I don’t recommend that at all. If you cannot manage a property, you don’t know the legals, ins and outs, because you have a contract with your renter. And if you don’t perform on your contract, and also the renter tears your property up, so just say you can just go and buy a 150-unit apartment house, You can do that, but there’s not many people who can. My point here, I want you to hear this with me, the raising of the money is easy part, especially today. It’s the managing of the property and making it turn a profit for the long-term, and also protecting the asset with the legal contracts is where people fall down. – Yeah, and look, when everything’s good, everything’s good. But your COVID hits, you’re gonna find out if you’re a manager or not. – We don’t manage properties. – Yeah, I don’t either. Like I don’t manage my properties, but somebody’s gotta manage the manager. – And that’s what I’m saying, as that’s, in my opinion, it’s easier to raise money today. If I was to say to somebody to buy a 400-unit apartment house and just manage it, I think they’re gonna, you know, best keep with the Titanic. One of you, any comments on that, Kim? – Well, I mean, that was our situation. So we, you know, managed our properties, we had onsite managers and we managed them, but I can only manage so many by myself, and then we couldn’t buy anymore ’cause I couldn’t, I didn’t have the time. We still had, we had the company and all of this. So that’s when we found our partner, Kenny McElroy, and he said to us, I said, can you manage our properties? And he’s like, no, I only do 150 units or more. And so then we had to step up our game, but now we had property management, experienced, knowledgeable, he started in college, managing properties, and he’s still doing that today. And now of course, developing and acquiring. – Yeah, so I just wanna be clear on our message here, Grant. Your message is probably different than ours. But to me, it’s the management of the property and making it turn a profit is the hard part to do. Raising the money is easy. There’s a lot of financing for it, people are gonna throw the money at you, – Yeah, I don’t know how, I mean, I don’t know that I’d say it’s easy. We’ve raised $700 million. You still gotta manage people, phone calls, you know, like it’s not, I mean, when you say it’s easy, it’s not easy. Like we do it with no ads, Robert. I haven’t spent any, I think I spent 50 grand in ads for 700 million. No brokers, no middlemen. I still gotta get a message out, right? So the hard part of real estate today for me is getting the deal. – I can agree with that. – It’s even getting control of an asset. Like what I’m competing today, we’re buying a deal in Fort Lauderdale, it’s $230 million. Like who’s gonna buy that deal? It’s a handful of names. AIG, Blackstone, JP, Goldman, like these are big, monster, trillion-dollar companies, not billion-dollar companies. And you know, the thing they can’t do, that I can do, is they cannot write a check the day they look at the deal. They can write a check for the whole amount three weeks from now, I can’t close without cash, you know, quarter of a billion, but I can go hard with 2 million today. And they can’t do that because of their fiduciary responsibility. So these big guys that we’re competing with today, like if you can’t move fast, you’re not gonna get the asset as you know. – Yeah, Grant, hang on. Not many people are gonna do what you do. Our audience wants to know how they get started right now. Please be respectful to our audience, okay? Any comments there, Kim? – Well, I was matching my question to Grant, was how did you get started? ‘Cause you started with nothing, as we did. How did you get started? How’d you get into that whole real estate game? – Yeah, I got started with one unit. Like the same way, like and I’m not being disrespectful to anybody, I’m telling your audience, they’re better off partnering with somebody on a big deal than going going one unit by yourself. Because the problem with one unit is when they move out, as you know, you’re 100% vacant. And all of a sudden real estate starts to hit some new reality. – You would start with 500 units at a shot, first deal? – I started with one unit. – I know, but are you recommending they partner with somebody on a 500-unit deal? – I would, at 1000%. – Wow. (indistinct) – Yeah, that’s a different strategy, because we– – We don’t wanna do that. – We want the knowledge, and the experience, and the education that goes with the hands-on management. That’s our philosophy. – I would tell people, I would tell people the best thing for them, I don’t think you have to go 500 units the first time, but 200 is a great number. And I would tell people, the first thing they should do with real estate is invest in real estate to learn it. If you wanna play the Bitcoin game, go buy some Bitcoin first, then start learning about it, because you’re not, too many people out there are learning, and never actually make an investment. – Okay, so we gotta go for a break. Look, I just want everybody clear on this, Grant recommends buying a large unit to start with, we do not. I agree with him, the hard part is finding a great deal, closing the great deal, financing it, but also then managing it, because if you don’t manage it well, that’s when you lose the deal. So when we come back, we’ll be going more into how you get started in real estate, and this great migration going on throughout the world, where are they moving from, but even if they’re moving from there, as Kim says, even in Portland, Oregon, where we had homeless sleeping outside of our unit and our tenants couldn’t get to it, they still wanted to, the property is still held its value. So we’ll be right back. Welcome back. Robert Kiyosaki, The Rich Dad Radio Show, the good news and bad news about money. This is the Rich Dad Radio Program, anytime, anywhere on iTunes, or Android and YouTube, and please leave us a review wherever you listen. And all of our programs are archived at richdadradio.com. We archive them because we don’t sell anything, we don’t sell investments, and we just basically are education and information. And so if you have a friend, family member, or associate who wants to learn more about real estate, go to richdadradio.com and replay this program. Our guest today is Grant Cardone, CEO of Cardone Capital, international speaker and entrepreneur, and he is the best selling author of "The 10 X Rule", "If You’re Not First You’re Last", as well as a sales trainer, speaker, and entrepreneur who has worked in the real estate industry and auto industry. Grant is a real estate mogul who has built into a $1.9 million portfolio of multifamily properties from scratch. And so I just want to be clear on here, is that what he’s saying, is that Kim and I do not recommend you should listen to him. Because this is the big difference with real estate. It’s not liquid. And liquidity is one of the biggest things you need to realize when you’re investing. For most people, they should just buy a mutual fund. You know, or a stock, or a bond, or an ETF. The reason for that is because paper assets are liquid. You make a mistake, you can, you make a mistake in the morning, you can be out of it that night. You make a mistake with a piece of real estate, and it’s a really bad deal, you ride that sucker down. And where the mistakes just pile on, pile on, pile on, pile on. So in real estate, the most important thing as Grant says, is how do you find it, how do you finance it, and how do you manage it? Those are the three pieces. And you make a mistake anywhere along those lines, you get crucified. So the word is liquidity. I wouldn’t recommend starting with a 200-unit apartment house, because you make a mistake, I don’t care how smart you are, you’ll still make a mistake. – I think what a lot of people don’t understand is how do you, what is a good deal, what makes a good deal, what makes a bad deal? – And how you manage it, how do you finance it? – How do you manage it, how do you finance it? So, one of my questions is like, for example, for us, when we’re looking at property, we always want to go where they’re jobs, which is a little more tricky today than it used to be, but that’s a criteria because if they aren’t working, they can’t pay rent. So I’d like to know from you Grant, how do you tell a good deal? What’s your criteria for a good deal, and what are the mistakes of a bad deal? – Yeah, so, you know, thank you. And I just wanna go back a second. I would suggest that liquidity for people today is a problem. And it’s not a good thing for people to be liquid, because then they end up losing money. They don’t invest their money, they end up buying stuff they don’t need. Liquidity funds emergencies, liquidity is an old Wall Street game so that they can convert money. I wanna be illiquid, Robert. Personally I want my cash to be in something real that I cannot access. – Grant, hang on. So I was saying, how fast can you get in and out of a bad deal? That’s all I care about. – Oh, well I don’t want a bad deal. So this goes to Kim’s question, okay? If I’m extremely disciplined, jobs are very important. Location is valuable. So, like we are extremely disciplined on what markets we go to, and when we go to a market. Austin, Houston, Scottsdale, Fort Lauderdale, Miami. These are pro-business states, positive job migration. We buy real estate in locations, we pay a premium for our real estate to be in a location where our renter does not exceed 20% of their income. So we are buying like really great locations with strong job bases, we never over-leverage a property, and we’re buying as big as we can, as nice as we can, and I would recommend that for everyone. – So are you investing in high-end properties? – We’ve done everything. We’ll do anything from value add, all the way to trophy AAA. We’ve done them all. As long as that location will support it, Boca Raton, for instance. I bought 1970 stuff the same year I bought 2020 product, in the same market, in the same year. – So are you right now fishing for investors? – No, I close these deals with my cash, Robert, and then I open it up after it’s closed to an investor base. We’re open to non-accredited and accredited investors. 1,000, to, our average non-accredited does about 25,000, but they can start at $1,000. – So I have a question, given in these times. So you’ve got high end, you’ve got value add properties, and you fix them up and make more profit. How did that all work out during COVID? – We had actually, while the newspapers and the media was reporting a 72% collection, we collected 98.9% on a 95% occupancy. Our collections went up in our markets, not down. Our renewals doubled. So, the renewal is, you know, the lease is terminating, and COVID actually stopped people from shopping apartments. So, COVID was actually, you know, in disguise, looking backwards, was a blessing. – I think also to, I mean, back to the point about management, I mean, you’ve gotta have great management in order to do that. Our management team with Kenny and Ross, I think we were at like 91%. Most of the properties, Scottsdale, Texas, yeah. – So the lesson here is that management is a big part of it, raising money is a big part of it, finding a property is a big part of it, and that’s our message. So Grant, I wanna thank you, and congratulations for your success on this program. And then we’ll come back, we’ll be talking more about what different markets we’re in. Okay, we’ll be right back. Thanks for being on the program, Grant. – Thanks, Robert. Thanks, Kim. – Thanks, Grant. I appreciate it. – Okay. – All right. Take care. – Welcome back. Robert Kiyosaki, The Rich Dad Radio Show, the good news and bad news about money. Once again, listen to the Rich Dad Radio Program, anytime, anywhere on iTunes, Android, and YouTube, and all of our programs are archived at richdadradio.com. We archive them because we’re a purely educational company. We do not raise money, we don’t sell anything, and so, repetition’s one of the best ways you learn, so if you’d like to listen to this program again, go to richdadradio.com, and inform your friends, family, and coworkers who need to learn about especially real estate today, ’cause it’s such a hot subject, go to richdadradio.com. And again, I wanna thank Grant Cardone. The message here is that everybody has a different formula. As my rich dad always said, there’s a million ways to financial heaven, and a billion ways to financial hell. And right now, many people are going to hell because they really don’t know what they’re doing. Without financial education, they do not do. So back in 1996, you know, Kim and I created the CASHFLOW board Game so you can understand how financial statements work, The balance sheet, statement of cash flow, the difference between employee mindset, self-employed mindset, big business mindset, and investor mindset. And all that, so it was purely educational. And I’ll be up front about it. You know, Grant recommends you just start at 200 units with a partner. I would not recommend that. You can invest with him and do that, but I would personally not do that. So Kim, why don’t we just start with how you got started, because you know, I started in Hawaii and then I started, one of the most dangerous things, they say you never teach her wife golf, and don’t teach her about real estate either. But I mean, when I introduced Kim to real estate, she took to it like a duck to water. But you started really, really small, didn’t you? – I did. And I think one of the differences in our philosophy versus Grant’s philosophy is we’re about financial education. And the best way to get educated is to get hands-on and to get in the game. And so, I think for us, for me, for you and me, Robert, for somebody to start on a 200 unit building with a partner, the education’s gonna be very, very, very different, and to me, that’s kind of, that’s very risky. So, we’re all about starting small, get the knowledge, get the experience, get the education, and then build from there. I think that’s just the difference in philosophy. – Kim, have we had problems with partners? – Oh yeah. Especially when it comes to money. I mean, money is a psychotic subject. And so, if you’re only going into real estate for the money and the return, then probably Rich Dad is not your philosophy to follow. But if you’re in it for the longterm for the education, and to grow it, and to hang onto it, then yes, yes. So as you were saying, I started with little two bedroom, one bath house. – In Portland, Oregon. – Portland, Oregon, $5,000 down payment on a $45,000 house. Nervous, scared, scared about making a mistake, what if the market turned, what if the tenant moved out? All of that, all of that. But it was these small properties, then we went from another single family, single family, went to 6-plex, went to a 12-plex, went to an 18-plex. And every time, more mistakes, more learning, more knowledge, but now, now we can do the big deals, because we’ve got that foundation of education and experience behind us. – Right. And for us, you know, the question is how do you find a good deal? Well, you gotta look. But you gotta know what you’re looking for, and that takes a while to learn, right? Yeah, what kind of real estate, and where is it? I mean, the landscape has changed so dramatically in the last two years with all the migration, as you talk about, Robert, people moving out of states to get to more non-regulated states where they want their freedom. As Grant said, the blue states are very, very popular right now. – Right, and the other thing too, is interest rates going near zero. – Excuse me, the red states are popular, not the blue states. They’re moving from the blue states to the red states. (laughs) I get my colors mixed up. – So anyway, with interest rates dropping so low, that’s why people are kind of jumping into real estate because it makes them affordable. But when they drop interest rates, prices go up. And so today, if you could talk to most people, we’re in a bubble. And that’s the dangerous part, because if, I’m not saying they will, if they raise interest rates, the bubble bursts. And that’s why I was talking about liquidity. Liquidity is how fast can you sell it? For example, if I buy a new pair of, let’s say, shoes, and I pay 100 bucks for the shoes, how long will it take me to sell those pair of shoes? It’ll take me a while, ’cause nobody wants them. And that’s the same with real estate. If not doesn’t, if people don’t know what it feels like to have a piece of real estate nobody wants, for whatever reason, they don’t want it. – Well, look at, Robert, look at the commercial office buildings now. They’re all empty. If you can find a way to repurpose them, great, that’s what’s needed right now, but I wouldn’t wanna own a big office building right now anywhere. – No, you have to, I mean, I highly suggest because real estate is, once you buy it, you bought the Titanic. You know, it’ll take you to heaven, or it’ll take you down to the bottom of the ocean. And thank God we’ve never had that happen to us, but also what happened was when Kim, as we got more successful buying the property, and Kim was the property manager, and then what happens? Property management consumes you. You know, it’s just like your dad said to you, I don’t wanna fix toilets. Well, nobody wants to fix toilets, but that’s what the property manager does. Plus, it’s a contractual agreement between you and the renter. And they can violate, and they can trash the property. We’ve had a property manager steal from us. You know what I mean? It’s just one big zoo. It’s a Jerry Springer show on steroids once you get into property management. – And it’s, you know, it’s harder to self-manage your properties, but the education and the knowledge you get, ’cause even when we had an onsite manager, we’re still the owners of the property, we still make the final decision. And I’ll never forget many, many, many years ago getting a call at 11:30 at night, and this tenant was trying to move out with our stuff. It was a furnished house, and they were taking the refrigerator, the stove, and the police had to come, and I was like, I look at that experience, I wouldn’t trade that for anything. – And you know something’s wrong when there’s a U-Haul or front of your property at three o’clock in the morning. So what Grant is saying is very accurate. You know, he’s looking for accreds and non-accreds. Accred is a definition of a class of investor, and a non-accredited means somebody who not accredited, and should be careful. But if you want to invest with Grant Cardone, then he’s the perfect guy to give a thousand dollars to, or 10,000, or whatever you wanna do, and he’ll do all the work for you. That’s a different type of investment. So at Rich Dad, we always recommend you learning by experience to do what you do, and then you can go through the process, because it’s a process. Remember that guy, Kim, I still remember he wasn’t paying you rent, and I walked up to the place and Kim had to evict the guy, and I gave you so much credit ’cause he was about, let’s say 35 years old, pretty muscular. And Kim’s standing there, and the sheriff serves the guy for the eviction. I tell you, if you haven’t evicted somebody, it’s pretty interesting. So the guy is coming down the house, he’s emptying the property, and he’s given us a stink-eye. He goes like, "It’s Christmas time, I’ve got two kids." You know, but he still didn’t pay the rent. As he’s being evicted, and every time he moves the stuff onto the sidewalk, he gives us a stink-eye. And I felt for you, Kim. I mean, you know, Kim is just, she’s not very muscular, she’s very attractive, but not muscular, and this guy’s giving her the stink-eye. (laughing) This was the funniest thing. Kim says, it’s worth the misery. So this guy is giving me a stink-eye, it’s Christmas time and he has got two daughters, he’s dragging his Christmas tree out and all his stuff, and he comes up to me, and he’s still giving me the stink-eye and he says, "You know, it’s Christmas." And Kim just holds the line, "And what am I gonna do with my furniture? "You know, it’s all on the sidewalk out there." And this truck pulls up, and they loaded his furniture onto a truck. (laughing) – They thought it was rubbish. (laughing) – Kim and I sat there talking to him. I’m looking over his shoulder and these guys say, "Oh, it must be Christmas." And they’re throwing out his furniture and his Christmas tree on their truck. And I said to him, you keep talking to me, pretty soon you won’t have anything to move. (laughs) Remember that, Kim? – I remember. And you know, that goes back to another really valuable lesson in that same situation is you also have to understand the rules around rental properties. And some states are very pro-landlord, and some states are very pro-tenant, and Arizona was very pro-landlord, so when I took that case to the circuit court for eviction, she actually, the judge actually reprimanded me, and she said, "This person hasn’t paid rent in four months. "How come you have let them go this long?" And I’m like, well, I’m trying to help him out, I’m trying to be nice, I’m trying to, it’s getting near the holidays, and just trying to help him. She’s like, you have to enforce the law. You have to enforce the rules, and you should that evicted him three months ago. And she read me the riot act, but it was, again, had I not had that experience, I wouldn’t have understood how the laws operate and what needs to happen. So yeah, that hands-on, you know, doing the real thing, it’s where real learning happens. – Yeah, and she’s still a personal friend of ours, isn’t she? – Yeah. – She’s great. She says, "By the way, I read Rich Dad, Poor Dad." It was a crack up. But that’s how we learn, and so today, Kim, we don’t manage it, Ken McElroy. So how do we transition to Kenny? What did he say to us? – So, when we met Kenny, we were managing, the biggest property we had was about 35 units. And when I, and we couldn’t buy any more ’cause I couldn’t manage anymore, I didn’t have the time. And so I was so happy to find Kenny, ’cause Kenny’s philosophies in real estate and cashflow are totally aligned to ours. And we’re like, "Oh good, can you start managing our properties?" And he said, "No, I can’t, "because I only do 150 units or more in management." And at that time they were just property management, now they’re doing development, and of course acquisitions. And so that forced us to up our game and to find a 150-unit property, and then he and his team manage that for us. And they have since managed, they’re managing all our properties today. – We’re now up to about 10,000 units. So he is very similar, Kenny McElroy is very similar to Grant Cardone. If you don’t want to manage, and find, and go through the headaches and the legal battles of property, then you give Grant your money and he’ll do it for you. it’s the same as Kim and I right now, we just give, we just call Kenny up. See, we need debt. This may not make sense, Tom Wheelright writes a book, "Tax-Free Wealth". We need debt to offset our taxes. It doesn’t make sense to most people, but I’ll call Kenny and I said, "Kenny, I need about 20 million in debt." So he’ll buy a property and borrow the $20 million so I can amortize and depreciate the property. That’s the game of real estate. So, Grant Cardone does some things very similar to what Kenny does, and I would recommend investing with Grant then if you’re so inclined, but you gotta be still, you still have to do your due diligence. – You still gotta do your homework. – Yeah, you still gotta do your homework. But real estate is not like a mutual fund, or a stock, or a bond. You buy it, you own it. And if you make a mistake, you really own it. You know, nobody else does, that’s why. So, real estate is a very different game. We love the game. I mean, it’s the best game in the world, but you have to decide, do you wanna be good at it, or do I just wanna give real estate, my money to somebody like Grant Cardone? And that’s the big difference here. Okay, Sarah, any comments before we end? – [Sarah] You know, it’s just different philosophies. And we’ve always said, you know, like Kim always has the example, If you get in the game of silver, you just have to put a little skin in the game. And I like the philosophy of starting small, but everybody’s philosophy is different and how they get rich. So, I like the two different views, but you know, I’m used to the Rich Dad message, so I understand starting small. – But you’re looking at it right now yourself, aren’t you? – [Sarah] Yeah, actually we just put in an offer for, and we’ll Airbnb it, it’s a property on a lake. Where on the lake? – It’s on Sylvan Lake in Indiana, so it’s cold right now. I was just out there and there’s snow starting. But, and before people think I’m crazy, my brother has two other houses on the same lake, and they’re packed all summer long. However, because we’re on the shore side, we’ll have hunting, ice fishermen, so I see the opportunity in it being a year-round opportunity. – Already selling, I love it. (laughing) – [Sarah] So it’s my first one, so I expect a lot of mistakes and a lot of pain, but you know, I’ve been sitting on this idea for, you know, a couple, you know, I’ve wanted to do it, and I finally decided, I’ve gotta get over my fear of failure, I’ve gotta just do it. And so, I’m doing it. – So, that’s what I mean, and she’ll soon find out what she knew and what she didn’t know. But what you don’t know will pop up really quickly. – [Sarah] Totally expect that. A lot of headache. – I’m like a proud father going, oh, oh. You know, I wanna protect Sarah, but if I protect you, you don’t learn anything. – [Sarah] Well, and if I just sit on it, I might feel, if I just sit on the sidelines and watch, you know, we have a lot of relationships with other investors and that sort of thing, and I just get to watch all of their failures and success, and to me, that’s not fun anymore. Like I want, I’m ready. I’m ready to fail. – So, are you gonna Airbnb it? – [Sarah] Yeah, it’ll be a weekly short-term rental opportunity. – Well, welcome to the insanity. (laughing) – [Sarah] My hair’s gonna suddenly go more gray, but no, I’m really excited. And we were talking a little bit in the show about partnering with somebody who’s done it. My brother has been doing this for 10 years on that lake, He has, what’s great is he has a handyman, he has a property manager, he has a house cleaner. So he has all those. – Good, good. – [Sarah] Yeah, so that’ll make it a little bit easier, not that I expect it to totally be easy, but so that’s the benefit in partnering with somebody like him. – Very smart, very smart, very smart. So anyway, I wanna thank Grant Cardone, different philosophies in all this. He raises a lot of money, he buys it, secures it, and then securitizes it. That’s where he talks about the accred and un-accred. Non-accredited come in, and that’s why he makes more money on that stuff. So just, that’s kind of a game. Again, as my rich dad said, there’s a million ways to financial heaven, and a billion ways to financial hell. And if they raise interest rates, millions of the guys will be going to hell. So you gotta be very, very careful, and that’s why we talk about liquidity, is how fast can you get out if you make a mistake? And that’s what we’re talking about. Final words, Kim. – This was a good discussion, I like it, and it’s always good to know. I just always wanna keep paying attention to the trends and what’s happening with real estate, where people are going, and you know, the whole thing with the jobs market. Things are changing every single day. So I wanna keep my finger on the pulse and learn as much as possible. Kenny and Ross, they’re educators as well. They’re always educating me and you Robert about the properties, and I just want to stay on top of the trends. – Yeah, there’s two books, three bucks I recommend from Ken McElroy, M-C-E-L-R-O-Y, people interested in real estate. Well, number one is ABCs, it’s the basic, how you invest. Number two is Property Management, and number three is Advanced, is how you use finance to do kind of what Grant does. But we highly recommend you study first, ’cause let’s say the book costs you 20 bucks, so you got 60 bucks invested, it’s better than 10,000 and finding out you’re the idiot who bought the Titanic. (laughs) Anyway, I want to thank Grant Cardone for his contribution to the show, and thank you all listening to The Rich Dad radio program. Thank you. Bye. – Thank you.

Welcome to Big Money Investing – Your Ultimate Destination for In The Money Facts!

🌴 Discover the Big Money Investing Strategies on Metals and Real Estate Investing. 🌊

Experience the world of finance with Big Money Investing. We bring you the latest and greatest from Big Money Investors, showcasing the whys, how-to’s, and best practices. Whether you’re planning a short—or long-term investment, preparing is the first and most important step. The Big Money Investing channel is a great go-to investment advice source

🔥 What You Can Expect:
  • Exclusive Financial and Big Money Investing How-To’s
  • Big Money Financial Traits: Learn how to mix and match your perfect investment portfolio to match the planned-out time horizons.
  • Financial Learning Is A Lifestyle Change: Stay financially fabulous with our expert investing tips, real estate practices, and healthy lifestyle advice.
  • Behind-the-Scenes: Get a sneak peek into how the Big Money Investors spend some of that return, from photoshoots to interviews with the experts.
👙 Why Subscribe to Big Money Investing?
  • Stay Updated: Be the first to know about new investment ideas and most importantly what not to be part of in today’s age.
  • Inspired Goals Lend Motivation: Get inspired by our Big Money Investors’ vibrant and diverse lifestyles, a perfect view at times.
  • Engaging Community: Join a community of financial enthusiasts and wealth producers who love to share their passion for life with others.

🔔 Subscribe Now: Hit the subscribe button and turn on notifications so you never miss an update from Big Money Investing. Join us on this fabulous journey and transform your financial situation with the latest trends and tips from Big Money Investing. Thank you for being a part of our amazing community.

🔗 Subscribe here!

#BigMoneyInvesting #big #money #investing #lifestyle #investors

Support Big Money Investing Sponsors

Leave a comment on this content and future topics you would like us to cover on Big Money Investing!

Share this post

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts

June 17, 2024

The BIGGEST LIES You’ve Been Told About Money That KEEP YOU POOR! | Jaspreet Singh

Read More
November 24, 2024

School Failed You: Here’s What They Don’t Want You to Know About Money

Read More
June 15, 2024

This Is How The SMART Money Manipulates YOUR Trades! (Leaked Video)

Read More
June 11, 2024

The Psychology of Money in 20 minutes

Read More
June 12, 2024

Money Truths School Didn’t Teach You

Read More
November 25, 2024

How to Become RICH Even IF You Start With NOTHING! | Robert Kiyosaki | Top 10 Rules

Read More
June 17, 2024

Fake Money Is Making You Poorer! Why Savers are LOSERS – Robert Kiyosaki [ Millennial Money ]

Read More
November 29, 2024

Financial Insider Explains Why the Wealthy Don’t Use 401ks

Read More
November 28, 2024

What Type of Real Estate the Rich Invest In – Robert Kiyosaki [FULL Radio Show]

Read More
June 16, 2024

my honest advice to someone who wants to get rich

Read More