How to Underwrite a $50 Million Dollar Real Estate Deal: Real Estate Investing Made Simple
ฝัง
- เผยแพร่เมื่อ 14 ต.ค. 2024
- Earth is one of the best investments that you can make. If it has a building attached to it that produces cash, even better. In real estate you can invest in old, value-add, and new. I usually don’t invest in new but it’s a good time to do it when the price of old and value-add is going up.
I’m working on a $50,000,000 deal right now and I’ll tell you that if you cannot underwrite a deal like this, you have no business investing in a $50,000 deal. Don’t let the numbers and the process confuse you-stick around and become an expert at this game. Learn your market and get around people that are doing what you want to do. Never trust the pro forma and get accurate numbers for the trailing 12 and trailing 3.
When you’re trying to get wealthy, don’t cut corners! Learn to play a professional game by looking at bigger deals. The bigger the property the better-you’ll always get a premium when you scale out. If you collect cash flow over an extended period of time-appreciation is bound to happen. Market corrections will also happen. When they do, it’s the little deals that will get whacked.
In 2007 and 2008, it wasn’t the big deals that stopped producing income. It was the small deals. My huge deals continued to pay me every month. Look at your exit strategy before you invest in any deal. Understand that when you are putting more money down, it acts like a debt pay down. On small deals, on the other hand, the deposit is not enough to act as a debt pay down.
For my deal, I already know who will be my buyer when I sell it and my expected return. It’s a good strategy to pay yourself a value-add when you exceed your projects returns. For example, I’m expecting a 6% return on my deal and will pay myself 35% of the amount that exceeds that 6% return. I don’t need the money so if you’re writing up your agreement with other partners, you could ask for 50% value add. When it comes to real estate investing, I like to say- “Stick and stay. It’s bound to pay.”
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Gotta get my real estate game up! Will definitely learn from the best. Uncle G, your an inspiration to many!
Want to personally thank you Grant. I'm an agent here in NYC and do advisory work and wholesaling. My broker pitched me a $55M 14 building portfolio in Brooklyn to find a buyer a few months ago with no bites. Today, I'm getting an LOI from an investment group. Because I literally watched ALL of your videos, I was able to intelligently sell and negotiate this deal. Being able to sell the value add component with actual numbers based on what the deal is pulling now was everything. Today Im doing When this deal closes, I'm coming to your office to thank you personally. Thanks brotha!! #forthefam
I’m looking at a 150 in New York is it even worth investing in New York rn? Especially with what’s going on with the government favoring tenants ?
@@Weljefedk depends if it's rent stabilized or free market
@@Weljefedk and what your goals are
😆 59:49 GC is the g.o.a.t!
GC is always bringing something fresh to the table!
Grant, why buying new deal instead of value add, is more beneficial? Especially now, that we are on the top of the market?
Bro just so good, G your getting smooth and can deal with the BS so calmly. Thank you Uncle
I'm 56 and I have lost everything...my wife took my children to Poland and I had a breakdown.. I don't drink or smoke it do drugs,
I have no criminal record and I always worked hard.
Grant your a great man to have done all you done... I wish I could see myself get good again but at 56 it's so difficult...
How are you doing now?
Love your business model. We build new because we have expertise in building and development. Our life would be easier if we just bought and when it doesn't pencil out to build,we will.
Grant you ROCK!! its amazing how much I have learned and how excited and inspired I get because of these videos. thanks so much. ACD
what if debt market is at higher side example @ 9% or bigger... what should be done.. debt should be used or not???
The GOAT, taking us to school daily! Much appreciated GC.
I just got great value from you Uncle G. Thank you so much.
Just want to say I love the new board! 🙌💯
Selvested same!
Show about financing would be great as you mentioned.... for a newbie looking at 4-plex, I’m now more interested in large unit apts... but like to know how GC would get funding for it - as if he wasn’t GC that is!!
PROPERTY APPRECIATION COMPOUNDED @3% in 10 years= 34 %
CASHFLOW @3% COMPOUNDED in 10 years= 4% at a miminum
PRINCIPAL PAYDOWN
Real Estate, Collectibles, Precious Metals OFFSETS the DECAY of FIAT CURRENCY.
You can make money in stocks, leverage through OPTIONS, and cashflow. But you have to know what you're doing like anything else in life. Real Estate is more applicable to the masses because we participate in Real estate in some form.
great vid! Learned a lot!
So much value!
👌
How much do I need to invest in cardone capital?
*declines to upsize the fries due to budgetary constraints*
"This video pertains to me."
I about lost my shit @58:20 LMMFAOOO
Dang uncle g tht was amazing
Great information that matters if you want financial freedom!
This is what I want to do!
Are your preferred investors happy with a 4.7% CoC return? Or do you just get to call all the shots and people are giving you money without expectation of CoC and IRR standards?
You have to start somewhere. I don't think there's anything wrong with starting with 3 or 4 units as ling as it makes money. No one is gonna trust an amateur looking to get into a big deal with their money, the bank sure as hell won't.
Calling Bigger Pockets out!
Yes Yes Uncle G
Termites and all pests on notice but great show
Why is 90% occupancy the worst case scenario? Why not 85% or 80%
Deep, deep, deep.... 10X baby
hi grant cardone do you drink milk on a daily basis??
A life insurance company is doing this deal?
19:00 ©ardone ©apital
The whiteboard gotta go man.
Vincent Vega hater
so put in 17 million to make 800k a year hmmm thats 21 years to get the down payment back
Cameryn Worden When you raise rents and sell on cap rate you’re making way more than the 800k/year. You’re missing how commercial re is valued.
That's why he talks about the exit. Grant's making the $17M back on the terminal event - in his case, selling the asset - and gets to pay out his investors from the yearly profits...
800k a year profit (if rents stay the same) over 5 year hold period BUT a rent increase of $225 over 240units adds 648k / yr to the NOI. Now realizing a $1,448,000/yr profit.
He increased the NOI to $2,748,000. IF He exits year five at a 5 cap with a new valuation of 54,960,000 ($2,748,000 / .05 cap).
His fund makes their money back and nets ~$12M on the hold and exit.. not bad right?
"How to Underwrite a $50 Million Dollar Real Estate Deal".. bro, im still trying to buy my first car and move out. even moving out how the hell am i going to relate to this video.nevermind relating to it it dosent really help at all.
😥
Danielmeir start small, save constantly, seek way to increase your income. Simply let the success of others inspire you
Danielmeir you’ll go nowhere with that negativity first of all. You don’t become successful overnight. Sounds like you’re looking for instant gratification
Daniel,
Remove the zeros! 50k or 50M doesn’t matter, Rules are the same. Start small, save 17K to put a down payment on 50K deal, you mortgage payment will be less than 500 bucks, add value to the property (paint it!) rent it out for $800 bucks, Boom! You just made $300 bucks a month! That’s $3600 a year. Or start smaller, but a small house for yourself (3 Bed/1 bath) get two roommates) at $300 each, your payment is still less than $500 bucks, $100 profit from your roommates. After 2 years sell the house for profit $70,000 and you just made a total $22,000 plus including the $100 per month on your roommates. Think small or think big, difference is just ZEROS!
Jeanette Fox can we connect?
BEST NO ?
I like this but grant is like a house flipper he never keeps his apartments just flips them
#GrantCardone "That's why I get 2X return on the deal." Boom. All in with #CardoneCapital App....Appreciation!
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