How To Pick Your Real Estate Market - Real Estate Investing Made Simple with Grant Cardone
When it comes to investing in real estate, how do you know what market to get into? If you already follow me, you know that you should go after big apartment deals. Purchasing a home is not an investment. The bank sold middle America on the dream of owning a home. When you buy a house—you don’t really own it—the bank does. Never buy anything that you can’t own. When you really know your real estate market you’ll:
Be in it—love it
Keep it—location is growing
Produce Income
You want to be the landlord and own where you rent and rent where you live. People take large apartments for granted in America. These types of properties are an aberration that other countries don’t have. Big deals are going to perform well over time. It’s Wall Street that’s going to buy them in the future. What type of deals should you invest in? Don’t go little. Go as big as you can. I recommend investing in 16 units or higher (preferably 32 units) that are cash flow positive. You should also be in it for the long term. The reason why small deal or single family homes are a bad investment is because they rely on one or a few renters. That’s why I don’t invest in small properties. The bigger deal you go, the more cash flow you’ll have to provide you cover during market corrections.
Know Your Market!
Before you invest anything, you need to know what market that you are getting into. Different markets allow you to get away with certain things. It should be in your neighborhood and you should understand what jobs are coming in, is it overbuilt or expanding, and what people are willing to pay for. Research the market. Call local businesses. Get a feel for the economics in the area. Find out where corporations are going to be. I’m investing in Orlando right now because I know Mickey Mouse will stand the test of time.
Manage What You’re Doing!
Most people fall apart when it comes to managing the asset. Learn more at CardoneCapital.com
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Next booming market will be wherever Amazon's HQ2 is. I'm really hoping Pittsburg is chosen. Great town in need of a new industry to replace steel, coal, and other industrials.
Property values to current rents leave a lot of room for margin to be made on your down payment of a rental (unlike San Diego). That being said, most properties will need some serious rehab to be rented out at top value... but then you can refi and cash out to move to the next rental.
Havent got into real estate but already I feel this is the market to go for. Am learning a lot especially the market target knowledge I've got in this video. Here in my community people are still economic with money, and I now know how and where to invest.
"Never buy anything that you can’t own"
That's food for thought.
Still following you boss on Real Estate...
Thanks for this educational post. Own where you rent and rent where you live is a concept that is hard to get your head around given what we have been brought up to believe. Also the notion of 16 minimum units is interesting and makes a lot of sense.
@grantcardone This is great advice for the more wealthy people. How about some advice on how to get to that point. Do you have blog posts about that?
Knowing the market is amazing advice for anyone wealthy or poor. It is the most important thing you can learn.
I have a video on my page of how I got my first property maybe that will help. Its a good start.
I completely disagree that a home is not an investment. In fact 80 percent of the net worth for average Americans is their home. Mostly because it is a forced savings plan. In theory it would be awesome if everyone saved and invested, but they do not.
One of the biggest advantages of owning a home is being able to buy below market value. If people are disciplined to save and invest, they should be able to take the time to get an awesome deal. If you live in a home for two years, you will most likely be able to sell it tax free in the US. That is an amazing advantage that no other asset has.
The bank is an amazing tool to allow people to buy a very expensive home without much money. When you buy below market value, you are ahead of the game as soon as you sign the closing docs.
@redfishpclef it is SOOOO important to try to be ready for what you believe in. I am not a huge christian, but I am a christian if that makes sense? I remember seeing a powerful poster in my Sunday School classroom, it was set at the time of the rapture and a man and his daughter was walking down a street as everyone was getting "beamed" up into heaven while this man did not. He watched as his daughter got sent to heaven without him.
This poster spoke so many words to me and i'll never forget that. I don't think anybody would want to experience what that man did in the poster.
On a side note, completely off this topic of the rapture.
My sister loved going to church Sundays and even more going to the youth group that took place Thursday nights. She would invite her non-christian friends to come on Thursdays as it was more of a service for the younger crowd with more up to beat music and more of a discussion then a sermon. This one girl started to go every Thursday and Sunday with her, and eventually got saved because of my sister. But eventually that one girl started to bully my sister inside the church and at school which ended up giving her no place to go to feel "safe".
It's sad that those things happen when you do so much for some people. It is even more sad that it's probably happening right now somewhere else in the world.
Anyways, thanks for spreading the word @redfishpclef! You rock!