Robert Kiyosaki CONFRONTS Grant Cardone & Cuts Interview Short: Cardone Capital Exposed!

So why tell budding entrepreneurs and other people who want to become like you not to do the things that got you to where you are now? If you can't move fast, you won't get the asset as you know, yeah, Grant. Wait, not many people are going to do what you do. Our audience wants to know how to get started right now. Alright. Wait, please be respectful of our audience. Good. Hello everyone, my name is Mike Andes and on this channel we talk about business and investing today, I'm talking about Grant Cardone going on the show Rich Dad, Poor Dad with Robert and Kim Kiyosaki and, uh, we have a little clash and opinions different about how to get started in real estate, so we're I'm going to play some clips from the

interview

and you can go to the Rich Dad Poor Dad channel and watch this podcast live and watch the whole thing, but it's actually quite condensed and quite

short

because it really I feel like Robert cut this

interview

short

because of the fact. that Grant was trying to pitch his products and pitch his uh Cardone Capital, which basically buys large real estate properties and then uses investors who are accredited and non-accredited people like you and me to make anywhere from a thousand dollars to millions of dollars. investing with him in these deals and the reason I feel like you really cut this interview short is because he never really let Grant close and then he literally just got back from vacation and all of a sudden Cardone was gone so let's move on. and watch the first clip, you can see everything yourself.

I'm going to remove some parts because I have a little perspective due to the fact that I've done both. I have owned real estate and own 20 units. own that I rent and then I also invested with Grant Cardone as a syndicator, that's what he did, it's called a syndicator and he collects fees the way he makes money, that is, he collects fees from investors who buy with him in these deals, so let's go ahead and play a couple of clips here uh and uh hopefully a little bit of context of what you're saying and if there's a balance, which I've done a little bit of both and give me money, it's like you guys they could.

Call me and say Hey, I want to put a million in your deal or let's just open this for a thousand dollars and we're literally changing the way people can invest in multifamily housing. Because Kim, I agree with you that to think that someone is going to raise two, three or four million dollars in their first deal is probably not real and they probably shouldn't do it, so let me tell you that this depends on the people, the part Really, the easy part is raising the money, the hard part is managing the property and I think that's what people forget because you know when Kim and I started managing a property so I have to agree with Robert on this Property management is the difficult part of owning real estate, finding a good property manager is great, but when you do, you will pay a significant amount of your profits up front and will depend on the added value of that property. ownership and appreciation to eventually generate cash flow, etc. uh property management is the hard part and when you talk about raising money you have to remember that both people are extremely creditworthy and can go to any bank and get money for the average person raising money and starting their own business.

It's going to be harder if you don't have real estate experience, if you don't have property management experience, if you don't have a ton of credit and financing deals in the past, it's going to be difficult to find financing, but that doesn't take away from the fact that that property management is the hard part, it's like anyone can start a business, but actually run the business profitably, that's the hard part, it's the same with real estate, getting the deal, yeah, finding one is difficult but know how to get the financing as long as you have decent credit and a 25 down payment you can basically get anything and that's the easy part of managing that deal, getting tenants in and out, raising the rental value and make sure that everything is really good for the tenants. to make them want to stay for a long period of time, that's the challenging part, how do you get the deal that you're not going to get?

Yes, in this market you are not going to get the deal if you don't have the experience. Yeah, exactly, so I like it, even on the 26-unit, 30-unit, and 80-unit deals, you're going to pay a very high premium today to get that deal. This is so competitive now that there is so much money chasing this performance. No, that's Grant. Wait a second. I'm being very clear with people. I do not recommend at all. If you can't manage a property, you don't know the legal details because if you have a contract with your tenant and if they don't fulfill their contract and they're in it and the tenant vandalizes your property, so just say you can go and buy a building. of apartments of 150 units.

You can do it, but there's not a lot of people, so this is the kind of early parts of the interview where things start to go off the rails and it's basically Robert calling Grant Cardone, basically saying, hey, look, we're talking about getting into real estate. , so I think the distinction here that Grant was trying to make is like hey, I'd rather you not go buy a piece, you know, a door. I'd rather just invest money with someone like me, who has all the experience, has the ability to raise the

capital

and find the deal, eh, but again.

What I don't like about Grant Cardone is the way he presents himself sometimes. I think actually what he does is great, the distribution is great, the deals he finds are great. I've learned a lot from him about real estate and sales, but I think one of the worst things he can do is go on a channel like this that has more followers than him, has a huge following, and could generate a lot of positive press for himself. same, but enter here and start selling your product. from the beginning, just offer value and if you offer value to someone and then basically say hello, here are all the things that I learned when I started and if I had done something different, this is what I potentially would have done.

He would have given money to a syndicate that had bought a bigger business and partnered with someone who would be different from the start, basically saying don't buy real estate, just give his money to someone like us and here it is. why we're so great and we're so amazing because we can compete at this high level and find deals that you can't find. I just pretend that I'm not a big fan when it comes to selling or trying to convince someone. any of anything that starts with this is why you're wrong, it's like let me try to sell a franchise to Augusta Lawn Care and basically like, oh well it's dumb to start your own business, like why would you start your own lawn care? ?

That's just stupid, why would you start your own website and do your own marketing like I don't? I create 98 of my content on how to advance the law and try to help people and there will be a group of people who then go ahead and say, Hey, I want to learn and reach out to this person who can help me do this much more efficiently. and much faster. I feel like that's the approach that Cardone should take more often because he's actually a great speaker, very motivating but very motivating. A lot of times his sales taxes for just stepping in and trying to tell someone they're wrong can be very compensatory, yes, so our message here is probably clear.

Granted their message is probably different than ours, but for me it's property management and making a profit is the hard part nowadays, raising the money is easy, there's a lot of funding for it, people are going to throw that at you. money, yeah, I don't know how I mean, I don't know what I would say. It's easy we've raised 700 million dollars you still have to manage people's phone calls you know like it's not I mean when you say it's easy it's not easy like we do it without advertising Robert no I don't think I've spent anything I spent 50 thousand dollars in ads, so again, it's kind of funny that Grant Cardone, knowing his sales background, would come on a show like this and right now this conversation of basically bragging that you have 700 million dollars that you raised, uh, it's I'm really just going after the host of the show, which is Robert, so why not just present something valuable to the listeners?

This doesn't help me as a listener, this doesn't help me knowing that you've raised this money and you're showing that you can raise a lot of money. make money quickly and that's been difficult, what's the value of that to me as a listener and if you're creating a YouTube channel or writing a book or creating a podcast, always think about your listener first and create value for them and don't try do it. go later you know building yourself up will always lead to failure and if you look at the comments section on the video of this Civic interview you can see it didn't end well because of that approach in my opinion these big guys we are competing with today, like if you can't move fast, you're not going to get the asset, you know, yeah, Grant, wait, not many people will do what you do.

Our audience wants to know how to get started. right now it's okay, wait, please be respectful of our audience. Okay, any comments are Kim. Well, I was Maxi. Oh, this was hard, this was hard right now. Here he interrupts and says, Hey, be respectful to our audience, literally, hey, be respectful to our audience. that we're going to bring them into our program, be respectful of them because they're not going to go, you know, they're not going to go acquire 500-unit apartment complexes, they're not going to go out and compete against BlackRock and JP Morgan and all of these.

Insurance companies like to be respectful of their audience and it is important for them to know. It's like talking to people who enlighten you and who listen to you, without inflating your own ego or, potentially, just trying to give them a blow. doing something wrong and making them feel stupid because they can't do what you do and this is a point where I feel like Robert really threw Grant under the bus because he didn't even give him the ability to respond, he gave it back. Kim, his wife, who is a co-host, he asked her opinion and then he went on a break, so it was very interesting not to be disrespectful to anyone.

I'm telling your audience that they will be better off, that they will be better off if they partner with someone. It's more important than buying a unit yourself because the problem with a unit is when they move in because you know they're 100 vacant and all of a sudden real estate starts coming to a new reality so you would start with 500 units at a time. The time for us I started with one unit, but do you recommend partnering with someone on a 500 unit deal? I would do it a thousand percent, so this is where I feel a little good because I hate when people basically say This is how I started and I've had a lot of success because of it, but I wouldn't allow it, I would recommend that you don't do that, that That's what bothers me a little because it's like when someone works 100 hours a week. bleeding from your eyes building your business and then you turn 67, you start living the vacation lifestyle and all the rest and you're talking to a bunch of entrepreneurs who basically want to become what you've done and I'll tell you, well, don't work too much, make sure you take a lot of time off, don't work at night, you know, sleep and everything else is like waiting, which got you to where you are today. because of the sacrifices you made and because you did all these things, so why tell budding entrepreneurs and other people who want to become you not to do the things that got you to where you are now and then tell someone oh no, don't you? go buy a deal and figure things out on your own and figure out how to manage the property how to find the deal how to do financing don't do that just give me your money and I'll finance the deal and I'll figure it out in the end and give you a cut of it , that's really hypocritical because what got you to where you are today to know how to do those deal financings and know how to actually manage these properties is because you started with one property, so wow, yeah, that's a different strategy because where we want put that knowledge and experience and application that goes with practical management, that's our philosophy, yes, I would tell people that I would tell people what's best for them.

I don't think you have to buy 500 units the first time, but 200 is a big number. Oh, 200 units for most people you're looking at at a minimum in most markets. $20 million, which means you'll need at least $5 million in cash and money as a down payment on the property. You will also have to have a significant amount of experience to be able to obtain that $15 million of debt from the bank. cover the rest of the loan, so it's a stretch. I started with a property that I bought for ninety thousand dollars. I paid in cash. It was a rundown building.built in 1911 and I basically took out the studs and then turned it into a duplex, that property today is probably worth over 420 thousand dollars and I owe about a hundred and forty thousand dollars after remodeling it, so the fact of the matter is that this is what's really cool and I'm going to get to this in just a second at the same time I bought my first deal I also invested ten thousand dollars with Grant Cardoney Cardone Capital so let me do the rest of this interview and I'll show you and I'll talk about what happened with my investments in both areas and then I'll start learning about it because there's not a lot of people learning it and they never really get it. an investment is okay, so hey, we have, we have, we have to take a break.

Look, I just want everyone on this

grant

Claire recommends purchasing a large unit to get started. They won't crucify you, so the word is liquidity. I wouldn't recommend starting. with a 200-unit apartment building because you make a mistake. I don't care how smart you are you're still going to make a mistake yeah you know thank you and I just want to back up for a second I would just suggest that liquidity for people today is a problem it's not good for people to be liquid because then they end up losing money they don't invest their money they end up buying things that don't need liquidity find emergencies I know it sounds like I'm against Cardone on all of these issues, but I'm not really going to explain it at the end, but yeah.

I want you to always think when you receive investment advice that you should ask yourself what the ulterior motive is. right motive and there is some potential for ulterior motives because not all the time, if there is an ulterior motive, someone is actually trying to present it, but you always want to know that when it comes to investment advice, so if someone tells you that, you must do it. be illiquid, you have to remember that to invest with Cardone Capital you basically have to lock up your money and it's completely illiquid, you can't take that money out and they determine when they sell the property, they determine when they refinance it or get that money back.

You, so you could be anywhere from, they say, three to ten years, you're completely illiquid, so I'm a big believer in having the ability to liquidate and being able to get your money out of the deal and that's why owning the property is so good. because I can sell it or I can refinance it whenever I want when the interest rates are the best and that gives me a form of liquidity, obviously, owning stocks or cryptocurrencies is something even much more liquid than owning real estate in general but having your money locked up. With an institutional investment like Cardone Capital, you have no control over that money, it is completely illiquid and if you want to refinance and get your money out of the deal because you know the really good interest rates in the market are low, you can't because you don't have any control. about it.

Capital liquidity is an old Wall Street game so they can convert money. I want to be illiquid. Robert personally. I want my cash to be in something real that I can't access. Grant waits, so say how quickly. Can you get in and out of a bad deal? That's the only thing that matters to me. Oh well, I don't want bad business, so that's kind of funny. I don't want a bad deal. I think, in general, real estate will. do very well in the future, that's why I've invested so much in it, but I think it's always good to think about the disadvantages and the fact is that Grant Cardone's body position right now is very defensive. arms crossed leaning back chin up it's like I'm dealing with you know something I don't want to deal with I'm backing away or whatever's coming I feel like the body expression could have been better more receptive more open show your hands show your palms just shows that you are not trying to hide something that you are not you have no ulterior motives if you don't do it now for someone who makes a lot of money like an athlete or a musician or someone who has a lot of businesses that are outside the sector real estate and want to divest or invest in diversified assets and don't want to get involved in the real estate game, but have a bunch of cash cards of their own.

Equity is a great way to do any type of syndication because you can put your money into real estate without having to figure it all out, but you have the equity, you don't have to figure it out and make money in real estate. flow positively and exceed the four, five or six percent returns that you will get from the cash flow of a syndication, which I will know in a moment, but I am not saying that Cardone's

capital

is bad because I have done it, but I think that It's best for someone who never wants to really learn about real estate, they just want to spend a stream of income and get rid of their cash from whatever they currently have. whether it's in your businesses or your career if you're like an athlete or potentially in a classic asset if you have a bunch of cryptocurrencies, it's like, hey, let's try to divest and do some real estate and some bonds and some other things to make me a little bit more diversified, that's when it's a great option to give five million dollars to someone like Grant Cardone, but the value of learning about real estate when you get one property, two properties if you have twenty thirty thousand Dollars, the money you will get from Cardone Capital If you put thirty thousand dollars into a deal, it's going to be about a hundred dollars a month, so the question is, can I take that thirty thousand dollars, get an FHA loan, get a duplex? or Triplex or Four Plex with that with that thirty thousand dollars and then be able to get three four five hundred thousand or three and then get three four or five hundred dollars a month in cash flow as well as all the other appreciation benefits and then also the depreciation on your taxes and most importantly the value of the learning and knowledge that comes from being a landlord and getting your hands dirty with property management, it's no big deal if I'm making millions of dollars and just need money to passively generate some cash flow, it's not a big deal if I have a lot of other businesses and I don't really want to learn real estate from scratch, I just need to get rid of my money, but if I'm trying to get started if I'm trying to grow if I'm trying to get started in real estate go get your own deal go learn it yourself so you're looking for investors too no we I close these deals with my cash Robert okay and then I open it after it's closed to an investor base, we're open to accredited and non-accredited investors, a thousand to our non-accredited average, around 25,000, but they can start with a thousand dollars, okay, so after At this point, we don't really see again to Grant Cardone, they took a break and he never came back and this is the part where you can go back and listen to that little clip there, you'll hear Robert say he's fine, like he basically was.

Basically, he was realizing that, basically, you're here to find investors. Basically, he is using this platform to sell and get people to invest in his funds, and he is not really here to try to provide value to potential new investors. real estate market because of the two hundred thousand people who will see this interview, maybe a couple thousand of them will become part of its syndication or invest in a fund like Grant Cardone's, tens of thousands, if not hundreds of thousands. The ones that will fall into this will buy their own deal and learn and get a duplex and try to live in one unit and rent out the other so they can live for free like they don't have a mortgage because it's covered by the other. tenant or maybe someone like me who has 10 15 20 units who is trying to grow and divest their interest outside of just one business or one asset class, that's where the listener is, where the audience is and when you try to talk to someone . and trying to create content, in my opinion, trying to create a brand and obviously Grant Code is extremely successful and has done very well, but in my opinion, in this interview he failed to connect with the audience and provide value if he provides value its people. they'll line up to do business with you, people want to give you money if they see you as a resource and they see you as someone giving them great content for free and that's what it could have been.

Welcome back. Robert Richard's radio show. good news and bad news about money, once again listen to Richard's radio show anytime, anywhere on iTunes Android and YouTube and all of our shows are archived at Rich Dad Radio dot com. We archive them because we are a purely educational company, we don't raise money. don't sell anything oh Robert comes right back after leaving Cardone off the call and basically says we don't sell anything and we don't raise any money we're not looking for your money basically yeah which is partly true because Don't do syndications , but there's a lot of things Rich Dad Poor Dad sells, from books to trainings to courses, they sell a board game to master classes and a bunch of other things, so it's not necessarily true, but he was really trying hard.

I work once Grant Cardone wasn't on this call and again I want to thank Grant Cardone the message here is that everyone has a different formula that's my Redstone always said there are a million ways to financial heaven and a billion ways of reaching financial hell, so I believe This is true, you can absolutely make money with massive deals. In fact, I think it's much better from an economy of scale to get a larger property and that's what I've done for the last two years: start with that property and convert it. On a duplex, I then bought three more units that were all duplexes, so six more units, then I got a larger duplex and then I got a 10 unit property to get to the full 20.

So now I'm looking for offers. Probably not, I don't think I'll ever get a single family home. I don't even think the whole duplex and maybe not even a four Plex, I'm looking for deals on 10 20 30 units now because I've grown slowly and gained confidence. I have the financial skills and the property management skills to be able to get those deals. Right now, it's the best game in the world, but you have to decide. Do you want to be good at it or do I just want to give my real estate money to someone like Grant Cardone and that's the big difference here so overall I think they both make a great point.

I feel like Grant Cardone actually most of the money that goes into his funds and some of his best people that fund all of these deals for him are the people that give him millions of dollars, not the person that gives them a thousand or two thousand and then once similar reports and if you look at There have actually been lawsuits against Grant Cardone's Cardone Capital, where they raise this money and a lot of it is not coming from institutional investors or accredited investors or people who are giving him millions of dollars, they are actually people who give you very little, are the non-accredited investors.

It's a big pain in the ass, but he keeps doing it and what he says is that he wants to give everyone a chance and that's great, that's amazing, so I bought into this non-accredited investor fund about four or five years ago and I don't I think it was a bad deal. I get about four percent to five percent. No, it's four percent a year, so I get thirty-three dollars and 33 cents every month and I put in ten thousand dollars, so if you do the math, I win. about four percent interest or four percent return on my money every year and then at the end of three to ten years, they'll sell that property and I'll get my money back and then hopefully some return on that money. but this is where I have to say, hey, from a cash flow standpoint, it's not that great because four percent doesn't even keep up with inflation, but then it's like, what if I had spent that money in stocks and get? an average return of 10 well, it would be better, but there is more risk and then money goes up and down.

I'm more liquid, that's positive, but the negative is that with stocks I could lose all my money, whereas in the real market In theory, unless something crazy happens, I should eventually be able to get this money back from Cardone, but I don't have absolutely no control over it and that's the most important thing when it comes to who is right and who is wrong, in my opinion it really comes down to control. If you're looking for a passive investment where you don't need your money back, you don't want your money back, you want to be illiquid, like Grant was talking about, and you're not looking for the next 30 years of depreciation on your taxes you just want them for five ten years and then you'll get your money back uh if that's what you're looking at you're looking to divest your money the car loan equity is a great way to do it you go To get usually four to five, maybe six percent, yeah you are an accredited investor every month in terms of your performance and then eventually once they sell or refinance the property, get their money back, you will have to pay other fees.

However, this will come out of that when the property is soldbecause that's where the syndicate makes a lot of its fees in the acquisition and sale of the property, that's how Critone Capital, you know, finances its jet and thousands of people that have to do it. take care of these properties and all their equipment and that is not a bad thing. I don't think it's bad. I don't think Cardinal is doing anything wrong. I think there's definitely value there, but for most of us, for most of us who were watching. this show and most people who watch this video, in my opinion, it's better to start, you know, and make some mistakes.

I don't think it's a bad thing to make a couple of mistakes the first time you own a property, the bottom line is that the property I bought for ninety thousand dollars has gone from a value of ninety thousand dollars to over four hundred and twenty thousand dollars in about four or five years. ; At that same time, the ten thousand dollars that I bought from Grant has earned me about sixteen hundred dollars in cash and it is still blocked and on Monday I hope to get it back, but in terms of the capital, the ten thousand dollars that I invested is completely blocked, no I have no access to them, while the money I originally invested in the property I have.

I was able to refinance, take out that money and then use it to buy a gym. This is how wealth is built, you have control over your assets so you can have the multiplicative advantage that real estate brings and this is something Cardone talks about all the time. The beautiful thing about real estate is that I can put in one dollar and get four dollars in purchasing power. If I put 25 on the property, I get a hundred percent four times as much in terms of leverage and that's how you build wealth through leverage, whereas if I put ten thousand dollars on his, he's your fund, yeah, he gets the leverage to purchase real estate worth forty thousand dollars.

I don't. To get that benefit, I will still get four percent of the ten thousand dollars I gave and when it comes to buying and selling the property, it's not like I'm going to double, triple, quadruple my money once I've held that property for five or ten. years or potentially learned a lot about property management, property marketing, managing managers and contractors dealing with tenants, that has a lot of value if you're a smaller investor, so I hope it was a good balance. I have done both and in my opinion if you are trying to get started and are actually willing to learn real estate and build a career in it.

I think it's great to start with one or two units, do a single family, do a duplex, do a four Plex, great way. To start if you're looking for a very passive investment that you don't want to be actively involved in, you don't really care to learn about real estate, you don't really care to learn about property management or how to finance a deal. you just need to divest your money and get it. Diversified capital for auto loans is a great way to go to get some cash flow and get some tax benefits; It will not have compound effects.

What real estate can contribute to your finances in my sweets I hope it has been useful and I will see you tomorrow