would be willing to carve out of the portfolio if I gave you 100% certainty of a close and everything you want?” Today, buyers have to be very aggressive and very savvy when it comes to scoring the purchase. It’s not just the price but also the certainty of close. There is more money chasing real estate than there is real estate and that is not going to change. Before the election and before COVID, 21 percent of all U.S. dollars now printed did not exist. If you are looking at prices from a decade ago you won’t be buying any real estate and you aren’t seeing what smart people see. Single-family real estate prices in markets across the nation are up as much as 50 percent in 2021 and inventory is at historical lows in most markets. Understand the real estate didn’t suddenly disappear, so what happened is smart money and the wealthy are moving away from dol- lars into real assets. And you see this happening across almost all asset classes: stocks, cryptocurrency, commodities, and now real estate. Even New York City had record con - do sales in May and the city was still on shutdown. California hit records again despite the largest evacuation of Californians migrating to Arizona, Utah, Idaho, Texas, and Florida. And for the naysayers that suggest real estate is in a bubble like 2008, you need to understand this has no similarities to 2008. Almost every- thing is different including the buyer, credit worthiness, asset type, and especially motivation. The buyer in most markets is not a first-time, no money/no credit buyer. Not only is the current situation not a bubble, it is probably the begin- ning stages of a real estate super
TIPS TO BUYING REAL ESTATE IN TIGHT MARKETS:
cycle whereby the wealthy continue to convert fiat cash to real assets they can use. What benefits most when currency and paper assets dis- appoint? Anything real. The way to play this cycle is to stay aggressive on pricing, terms, and willingness to close and understand there is not a shortage of inventory but rather a shortage of savvy real estate investors. That’s what we do at Cardone Capital where we have closed over one billion in assets since COVID shut the country down and another $250,000,000 at the time of this writ- ing. We focus on assets that we can afford to pay top dollar for because they are in great locations, supported by strong job markets and are worth more than the value of the currency we are exchanging for them. Also, when it comes to income property, we never compromise on location and seek positive cashflow from quality tenants providing our investors and the company stability even in uncertain times. It is my belief there are two main winners in this real estate cycle: 1) the buyer who is able to secure great real estate in great locations, 2) multifamily apartment assets that produce income and become the alternative lifestyle to owning a single-family home. In my opinion this country will never be able to build affordable single-family homes again, and the consumer will not be able to afford what is built. On the single-family side, this will benefit investors who find great locations and know how to add value through smart rehabbing. On the apartment side, America will become a renter nation as they will be forced out of home ownership.
Never compromise on location. Be aggressive on price and terms.
Shorten your due diligence.
Know enough to waive inspection and even the appraisal (if paying cash).
Use all cash to negotiate then get debt after closing.
Remember everyone has a price.
Don’t get hung up on a deal over a few thousand dollars. The money you are using will be worth less in the future than the real estate you are buying.
If you have questions send them to annie@grantcardone.com and she will get it to me. •
G rant Cardone owns and operates seven privately held companies, and a $1.8B real estate portfolio as the Founder and CEO of private equity real estate firm,
Cardone Capital. Cardone is also the founder and leader of The 10X Movement and The 10X Growth Conference, which is now the largest business and entrepreneur conference in the world. Moreover, Cardone founded the Grant Cardone Foundation, a non-profit organization dedicated to mentoring underprivileged and troubled youth in character and financial literacy.
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