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Grant Cardone: Buying Your House is One of the Dumbest Investments You Can Make (Part 7)


 


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 4 months ago '16        #26
Caligadget 
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 drizz said
Thats a old myth. Buying a home requires a substantial 1x down payment (10k ) + yearly property taxes (1500) + maintenence (everything from light bulbs to lawnmowers lets say 500 a year which is very modest) + you pay the bank the interest from a 200k loan (6k a year). You will pay about 1500 a month and earn about 7k a year in equity. If you ever want to actually realize that yearly equity you will have to then sell your house which has closing cost real + estate agent fees + renovation cost. After the sale you lucky if you break even

Renting you keep that 10k in your pocket and can invest in stocks. You will pay 1800 a month but no interest, no taxes, no maintenance. Add 100 a month to your stocks. After the same tine you will have a nice lump sum minus the headaches of home ownership. No lawn work no home owners a*sociations.

Thanks for breaking it down in layman terms
Look like a lot even myself didnít have a good understanding of it
+2   

 4 months ago '17        #27
arms  27 heat pts27
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 Naga Sadow said
I bought my first house in RI for $260k and 5 years later sold it for $480k. Bought my second house in Charlotte for $130k and it's recent appraisal has it at $240k.

Yeah, those were definitely dumb moves.

You bought during a bullmarket for home prices. That won't always be the case and houses are extremely overpriced right now.
+6   

 4 months ago '05        #28
OG T Gutta N  13 heat pts13
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I never understood how people without , can criticize the advice of those with.

All he is saying is that , a house is not a good investment based on the fact it creates no income , and that "sell 30 years later" isn't necessarily true (recession , bubbles , etc) because a house is only worth what one is willing to pay at a given time. You have to make that house better. You pay your house.

His situation rings true to house flipping for example , depending on terms of loan , if you don't have a tenant , you will bleed money until you sell a few months in.

His point is that when he adjusted to buying "multiple doors" ie: units , he sold on the fact he had income , not that the property in itself had such an increasing value. He brought up netflix , subscriptions as anothr example of multiple doors or streams of income.

To minimize this, why start a salon when you can invest in a salon that has 8 people already paying rent. You aren't going to get wealthy salon by salon.

Why build a plaza when you can buy one that has paying tenants. It is this income that translates to wealth. And this is how valuation and projections work in all industries.

On top of that once you have a portfolio you'll have access to bigger loans , that allow for bigger things.

On the flipside , obviously flipping homes till you have enough dough to qualify for a nice loan would be a great short term plan to this. He got in at 300k , on a 1.9M loan , made 7M. , thats a margin you'll never see with a home , which makes it a dumb real estate play.

A house is not an investment , its a hope.
+7   

 4 months ago '09        #29
chasedg  11 heat pts11
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He will tell you to take out a home mortgage and spend $40k on his sales training
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 4 months ago '05        #30
pnoi89  18 heat pts18
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 chasedg said
He will tell you to take out a home mortgage and spend $40k on his sales training
B-b-b-b-but, I'm getting a deal for his $11k product priced only at $50!!!



+9   

 4 months ago '12        #31
J Money 95  topics gone triple plat - Number 1 spot x1
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 pnoi89 said
B-b-b-b-but, I'm getting a deal for his $11k product priced only at $50!!!



What the fu*k
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 4 months ago '12        #32
J Money 95  topics gone triple plat - Number 1 spot x1
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For those of us starting out isn't it better to buy a crib & rent out rooms to pay for the mortgage?
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 4 months ago '07        #33
pete jr  5 heat pts5
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 Naga Sadow said
I bought my first house in RI for $260k and 5 years later sold it for $480k. Bought my second house in Charlotte for $130k and it's recent appraisal has it at $240k.

Yeah, those were definitely dumb moves.

This is true. House will appreciate with inflation and as population grows the value of properties will go up. As long as you invest in property in areas with stable work force and growing population you almost always end up on the right side of things.
+2   

 4 months ago '07        #34
pete jr  5 heat pts5
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 OG T Gutta N said
I never understood how people without , can criticize the advice of those with.

All he is saying is that , a house is not a good investment based on the fact it creates no income , and that "sell 30 years later" isn't necessarily true (recession , bubbles , etc) because a house is only worth what one is willing to pay at a given time. You have to make that house better. You pay your house.

His situation rings true to house flipping for example , depending on terms of loan , if you don't have a tenant , you will bleed money until you sell a few months in.

His point is that when he adjusted to buying "multiple doors" ie: units , he sold on the fact he had income , not that the property in itself had such an increasing value. He brought up netflix , subscriptions as anothr example of multiple doors or streams of income.

To minimize this, why start a salon when you can invest in a salon that has 8 people already paying rent. You aren't going to get wealthy salon by salon.

Why build a plaza when you can buy one that has paying tenants. It is this income that translates to wealth. And this is how valuation and projections work in all industries.

On top of that once you have a portfolio you'll have access to bigger loans , that allow for bigger things.

On the flipside , obviously flipping homes till you have enough dough to qualify for a nice loan would be a great short term plan to this. He got in at 300k , on a 1.9M loan , made 7M. , thats a margin you'll never see with a home , which makes it a dumb real estate play.

A house is not an investment , its a hope.
The people with investing in multi-units is the market has become saturated with REITs and corporate money. Entities with more money are willing to take smaller margins and price out the mom and pop investor. Right now single family, mobile homes or 2-4 units are a lot easier to get into and have much better margins.
+2   

 4 months ago '15        #35
Bran1723  4 heat pts4
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 pnoi89 said
B-b-b-b-but, I'm getting a deal for his $11k product priced only at $50!!!
I have found value in a few of those $50 products

 4 months ago '10        #36
eightytyson06  39 heat pts39
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 J Money 95 said
For those of us starting out isn't it better to buy a crib & rent out rooms to pay for the mortgage?
That or do the duplex thing but some people hate being landlord or having room mates
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 4 months ago '05        #37
Schavez98  8 heat pts8
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 Pretty Tone said
I dont see how. Youre gonna be spending more renting vs buying a home. You can also rent it out and make some extra money while paying it off
When you do that youíre turning it into the passive income he is talking aboit. He is specifically talking about where you sleep.
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 4 months ago '18        #38
Irenekush 
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 drizz said
Invest in stocks. Real estate is cool but is costly and complicated. Population on the us is shrinking too. Baby boomers are dying out.
Slow money...if you know what you re doing real estate is a win win.
+1   

 4 months ago '15        #39
jharlem0500  topics gone triple plat - Number 1 spot x1
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 Arceo said
The problem is a bunch a broke renting mfs justify their low income and credit scores by quoting guys who are well off that have liquid a*sets. Half the people who take his advice couldnít qualify for a decent home anyway
So a broke person is wrong for listening to a rich person. BX, Iíll tell you. LoL

 4 months ago '15        #40
jharlem0500  topics gone triple plat - Number 1 spot x1
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 qutaboi225 said
I have a 100k equity in my house and just bought it last year. fu*k Grant Cardone and all these finance "Gurus" that make their wealth by "telling you" how to make yours. These n*ggas is a whole lotta almost true and true statements wrapped up in a blanket of scam
How are you going to use the equity?

You going to wait until the market crashes again? Or listen to Grant and put it to work for you?
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 4 months ago '18        #41
Jutown219 
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 Naga Sadow said
I bought my first house in RI for $260k and 5 years later sold it for $480k. Bought my second house in Charlotte for $130k and it's recent appraisal has it at $240k.

Yeah, those were definitely dumb moves.

I live in the Charlotte area(Gastonia) and the real estate out there is about to go up significantly. They're building so much stuff and paying top dollar just for the space alone. You made a great choice. That property will easily be worth 300k in maybe 8 months.
+4   

 4 months ago '16        #42
Usd2bDrich409  9 heat pts9
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If any of you really want to learn how to properly invest in real estate either with money or with no money and still be cash flow positive then go to YouTube or Instagram and check out @BuyingBrian. He definitely drops gems that anyone can pick up on and learn from.

 4 months ago '05        #43
Arceo  21 heat pts21
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 jharlem0500 said
So a broke person is wrong for listening to a rich person. BX, Iíll tell you. LoL

Yup...because most broke people..dont have the drive that a rich person does. They can listen all the want..Getting knowledge and putting it to use is 2 different worlds.. Fact is, most people in broke areas are bred with the same mentality and are stuck in the cycle of barley making it.. Takes alot of work a couple breaks to get outta that sh*t..I know.. I was there.
+2   

 4 months ago '05        #44
projectd06  3 heat pts3
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Buying a move in ready house is not a good investment, buying a house you can actually increase the value on via remodeling or being in an up and coming neighborhood is a good investment. Buying a house in itself is not a good investment but that doesnt mean you cant own a home.
+1   

 4 months ago '05        #45
Quddus  13 heat pts13
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 drizz said
Thats a old myth. Buying a home requires a substantial 1x down payment (10k ) + yearly property taxes (1500) + maintenence (everything from light bulbs to lawnmowers lets say 500 a year which is very modest) + you pay the bank the interest from a 200k loan (6k a year). You will pay about 1500 a month and earn about 7k a year in equity. If you ever want to actually realize that yearly equity you will have to then sell your house which has closing cost real + estate agent fees + renovation cost. After the sale you lucky if you break even

Renting you keep that 10k in your pocket and can invest in stocks. You will pay 1800 a month but no interest, no taxes, no maintenance. Add 100 a month to your stocks. After the same tine you will have a nice lump sum minus the headaches of home ownership. No lawn work no home owners a*sociations.
I just bought a home. But I didn't buy one based off anyone's opinion on the investment. I have been renting for 10+ years. I got to a point in my last town home that I got sick of the parking. I got sick of being told what I could and not do. I got sick of renting being raised. I got sick of all the rules.

Now I got a home can't nobody tell me nothing. I enjoy being in my private backyard where I can do as I please
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 4 months ago '18        #46
ShoePacShoeKur 
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paid 450k for a duplex in 08. Sold it in December for 900k.

stocks?

How many people lost their a*s in stocks when the great recession hit. I know co-workers who still haven't bounced back on their 401k portfolios.

stocks are for the super smart and super rich. No regular person is making enough on stocks nor would make more of ROI than in purchasing a home.

White folks are buying up crenshaw now. Hope to flip the current home I'm in for another 400k profit in a few years and then retire to Texas or Arizona
+4   

 4 months ago '15        #47
Hellmatic  3 heat pts3
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 J.BEEZY said
Makes no sense to me either.
You spend less when you buy, you own it in under 30 years, you can make money off it
When you buy you don't own it automatically?

 4 months ago '18        #48
ShoePacShoeKur 
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houses dont pay you?

Uhm...houses appreciate, build equity and also loans are for set amount. If you pay your house off in 20years you've technically paid yourself since when you sell you're making all your money back.

Renters barely get their security back
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 4 months ago '12        #49
verity22  3 heat pts3
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 Fantastic said
His main point is investing in a passive income. He has some pretty intense ideas but it makes sense. Make money on things that are not taxed upfront, invest that money in businesses with a passive income. Then use the returns from the passive income of said investments in his case (rental properties) to go crazy and buy dumb sh*t.

The part that heís not telling you is this only applies for sh*ts with payments. His entire company owns real estate and rents that sh*t out. Heís trying to play cool but not once does he mention equity or dividends with the stocks. You can tell by his mannerisms he seems overall shady dude. Iím sure he has a hustlers mentality. Convinces you itís dumb to make mortgage payments(which it is btw) then buys your house on the low low. What you do is buy the entire house cash when you have the money. Let the house build equity over the years of ownership. I do like the idea of only putting money towards passive income generators.
The problem is is that there is such a large barrier to entry to owning sh*t that pays you passive income. Like I'm 32. Wife and I make like 180K combined. I've diligently paid down my home it's worth 280K and I owe 100k on it. I have 15K in cash saved. My retirement accounts are like 70K in a Roth and another 50K in a 401k.

What am I gonna do liquidate all my retirement accounts, sell my home and take the 180K in profit to purchase a 200k home to rent it out and pay rent where I end up living and hope I come out ahead? Stupid.

If there was only a way to invest in a portion of a 30 unit rental, so let's say I invest 30K and get 250 dollars a month and a part of the appreciation of the building?

That's what needs to exist. A fractional way to own real estate that pays you passive income. That way I can diversify my equity holdings in the market with this.
+3   

 4 months ago '05        #50
blackninja  17 heat pts17
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This is hilarious. You have to have some place to live and, regardless if it is you or another person, the owner of a rental property will be collecting that rent until the day they die.

The majority of people I know who were were once involved in criminal enterprises legitimized their operations by transitioning into real-estate, which started with them owning their first house.

My neighbors own their house and moved out. The rent they collect on the first house pays the mortgage on the new house. Small but sound step.


Last edited by blackninja; 06-26-2019 at 10:57 AM..
+3   



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