Hello Friend,
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Thank you for visiting and have a great day!
Grand Cardone any thoughts?
- Thread starter eli77
- Start date
Poonani Maker
Master Don Juan
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He's totally about Leverage, which I can't stomach. The question is...where was he post-collapse 2008? He's only popular now because these are flush lush times. I can't stomach going to the bank much and leveraging purchases of over-valued over-priced homes. RE investing is Very difficult right now, you have to be smart AF.
RickTheToad
Moderator
He'a a jabron; and a lucky one at that. Doesn't take much luck or risk to buy at the bottom of the market. However, he's leveraged at 90%. So, he says he has around 500 million in real estate, but only owns around 5 million (90% leveraged). He also lives quite high with a private jet, travel, shows, material stuff and an expensive "model" wife to support. We'll see how he handles the next downturn. IMO, he's way overleveraged; but what do I know. If he's able to survive it, kudos to him, but seems quite risky. I think @BeExcellent is a real estate investor. She'd be a better person to ask. I just work with animals. ;'p
BeExcellent
Master Don Juan
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Hmmmm. I don’t know the guy. Will have to read up.
Here’s what I do know. Leverage is a very sharp double edged sword. People who live flashy like that will always be around. 90% is foolishly over leveraged in my view. But everything has its pros & cons.
An advantage of high leverage if the loans are backed by real property is that the lender gets the asset if the buyer can’t pay.
But if you watch the movie “The Big Short” you’ll see that macro influences can be ruinous too.
In every endeavor and in every strategy there exists risk. High equity? High liability exposure. High leverage? High market risk exposure of various types. So on the one hand you pick your poison. On the other hand few people in my view are doing the sort of risk analysis required to determine what acceptable risk is TO THEM. Flipping has risk. Holding has risk. Getting in your car to go to work has risk. Life is hazardous and there is only so much you can do about that.
Flashy gurus are selling the potential for an extravagant life. It’s very seductive and many are seeking that high life so there will always be people paying to chase that dream, most of whom never do anything.
So the income stream is as much or more from selling luxury or the illusion of it moreso than quality investing.
You want to make money with high leverage? Get into leveraged buyouts. That creates billionaires. Quiet billionaires often. Smart money is typically quiet money although trappings of wealth are perfectly fine if one has a taste for the finer things. But leveraged buyouts require very sophisticated financial skill. The average person is woefully ill equipped to succeed in that way. So you aren’t going to see seminars for that sort of thing offered to the general public. Rather that is the purview of the sophisticated investor with at least 7 figures of free capital available to put at risk...not something your average working stiff can do.
There are other means of course. But you need to be strategic, smart and shrewd.
Many of you here are to young to recall the 1980s. Swashbuckling high rollers up to their eyeballs in leverage. I personally knew people whose parents killed themselves after real estate crashed in the 80s. Leverage ruined many many people. So don’t get swept up in the glamour.
There are always mechanisms to make serious money. All require some level of knowledge and work ethic to last. Easy come easy go is alluring & seductive.
Be very careful.
Here’s what I do know. Leverage is a very sharp double edged sword. People who live flashy like that will always be around. 90% is foolishly over leveraged in my view. But everything has its pros & cons.
An advantage of high leverage if the loans are backed by real property is that the lender gets the asset if the buyer can’t pay.
But if you watch the movie “The Big Short” you’ll see that macro influences can be ruinous too.
In every endeavor and in every strategy there exists risk. High equity? High liability exposure. High leverage? High market risk exposure of various types. So on the one hand you pick your poison. On the other hand few people in my view are doing the sort of risk analysis required to determine what acceptable risk is TO THEM. Flipping has risk. Holding has risk. Getting in your car to go to work has risk. Life is hazardous and there is only so much you can do about that.
Flashy gurus are selling the potential for an extravagant life. It’s very seductive and many are seeking that high life so there will always be people paying to chase that dream, most of whom never do anything.
So the income stream is as much or more from selling luxury or the illusion of it moreso than quality investing.
You want to make money with high leverage? Get into leveraged buyouts. That creates billionaires. Quiet billionaires often. Smart money is typically quiet money although trappings of wealth are perfectly fine if one has a taste for the finer things. But leveraged buyouts require very sophisticated financial skill. The average person is woefully ill equipped to succeed in that way. So you aren’t going to see seminars for that sort of thing offered to the general public. Rather that is the purview of the sophisticated investor with at least 7 figures of free capital available to put at risk...not something your average working stiff can do.
There are other means of course. But you need to be strategic, smart and shrewd.
Many of you here are to young to recall the 1980s. Swashbuckling high rollers up to their eyeballs in leverage. I personally knew people whose parents killed themselves after real estate crashed in the 80s. Leverage ruined many many people. So don’t get swept up in the glamour.
There are always mechanisms to make serious money. All require some level of knowledge and work ethic to last. Easy come easy go is alluring & seductive.
Be very careful.
wifehunter
Master Don Juan
RickTheToad
Moderator
Apparently, he's bad at math too. Maybe he's a frontman for the brains behind the deals?
EyeBRollin
Master Don Juan
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Can’t knock him. I’ve listened to a few of his audiobooks. He’s repetitive and a little insane. Somehow it works for him though.
RickTheToad
Moderator
True, but not sustainable. Real Estate investing is not easy nor a game. It's fine when things are stagnant or going up. The true players and masters show their cards in the downturn.
Poonani Maker
Master Don Juan
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^^ I read RE books from those who are younger than me and are being realistic with me, practical. Biggerpockets.com is a good source of RE info. Income is easy to nail down. The Expenses is where most get swallowed whole. They don't realize certain expenses and thus think the deal they're staring at is "good."
RickTheToad
Moderator
Seems newbies who are green are not really in the bigger pockets category. More like smaller pockets.. LoL.