Kris Krohn here with Limitless TV and today, Grant Cardone and I go a little
bit head-to-head as we talk about multifamily vs. single-family homes.
Let's see how it winds up.
Why multifamily rather than just investing
in your house? Grant, really good question. I'm gonna argue for single family home
for a couple of main reasons, it's an easier entry point for the average
American. If you get into multifamily, you need a lot more money and you're gonna
be taking on a lot more risk and you're going to pulling a lot more eggs in the basket
and a lot more eggs in the basket and that's not necessarily bad but it is
important that you are taking on a size of investment that makes sense for where
you're at and so if I had a chance between having all of my money wrapped
in one project or having ten little single family projects, I think,
especially for the beginner, even the novice or even the intermediate, having
those ten homes, there's some advantages you get there
that you may lose out on once you step into the bigger risk of multifamily.
There's a hundred, almost a hundred million baby boomers, there's 80 million
Millennials, these are boomers. Now what are these two
groups have in common? They're on both ends of the age spectrum called a
demographic, right? We don't have a developed middle class today,
you understand? We already did that, that was done 50 years ago. So when these
people, these hundred million baby boomers were in 30 and 35 years old, they
started buying homes, okay? They were also having babies at 20. What else has
happened is, you got 80 million Millennials saying, "I don't need a house
dude, I need mobility. I don't care if I got a house." Grant, you're right,
multi-family is a really great solution for the baby boomers and the Millennials
but there's a bigger gap than just that. Yes, a hundred million here, yes,
80 million there but look at all the families that are out there that are
saying, "I want the American Dream. I want my own house." I do think there's room for
both strategies here but for me, I believe that there's a much better
market space for the entry level family, people that have one, two, three kids and
they're saying, "Hey, we want a place of our own, we want our own lawn, we want our
own backyard, we want a place that we can do up." And you lose some of those
freedoms, when you go into multifamily, a lot of people, sure, there's some freedom
that comes with that the apartment feeling and the condominium,
the HOA and maybe you pick up, you know, some of the benefits or a pool access or
a hot cut, hot tub Jacuzzi or something like that but single-family home is
still very core to what it is to be American and I think there's a greater
population, a larger number of people that are seeking that right now.
Buy house for 200 grand or buy an apartment for 200 grand, okay okay? I'll tell you
simple, pick the one that makes you money. Not in the future, pick the one that
makes you money this month. I can get this one to cash flow and I get a check
every month, if you don't like money, give the money to your church but the house,
you never ever get a check from, the checks go to the house, not to you.
You get it? Simple. I have no idea what you're talking about, that makes absolutely no
sense whatsoever, I've never done apartments, I've only ever done single
families and I'm sorry the checks come straight to me, it's just straightforward
real estate investing so I may have missed something in what you're really
trying to communicate there but an apartment, is it going to appreciate as well
as a house? No. Is a house gonna bring me more dollar per dollar rent than an
apartment? Yes. Am I gonna get someone that's interested in homeownership or I
can do a lease option where they'll actually take better care of the house
an apartment? Absolutely. Just add up those three things alone, Grant, and I'm
sorry, there's going to be more money coming into you on a single-family home versus multifamily.
You're going to own one house out of 4,000 apartments, okay?
How could you own 4,000 houses? You're going to go do 4,000 different deals?
I probably did 18 deals to about 4,000 apartments.
Three of my deals don't cash flow, three out of the 18 don't cash flow right now
but I'm in rehab, okay? I'm rehabbing them, two of them don't, okay?
But they will someday, that house, no chance that house will ever ever, no
matter what you do, do it, okay? Spit on it, shine it, buff it, okay? It will never
write you a monthly check. That is such a bizarre assertion that a house cannot
produce a cash flow, cannot produce an income for you but I will say, I do like
your idea of 18 deals and having 4,000 units, I'd have to see the numbers on
that and see what that looks like but, Grant, you're Grant Cardone and we're
talking about everyday average Americans and I guess the question at the end of
the day is, are you really trying to appeal to
someone that has a lot of money, a lot of success in trying to do something? For me,
I'm just starting out with the newbies and even some of the most experienced
people, Grant, will say absolutely 4,000 houses versus 4,000 doors
and again let's just talk about the reasons why. Right now, at the end of
the day, with the house, I get appreciation that I don't get on
apartments. With a house, I could put a homeowner in there that will take better
care of it than an apartment user that's just transitory often and they're in and
they're out and you're gonna see a lot more turnover with that, when I'm
doing a lease option, I can collect downpayments on these houses, I can get
people taking care of the houses in different ways, with an apartment, you
have utilities that you have to pass on to them, with the house I can have them
put it in their name and I can have them take ownership and accountability for
what that looks like. Appreciation, this is such a big one.
I got my equity that I walk into which grant I can do on houses and I get the
appreciation component, so you add all that up and there's a reason why it made
me multi-millionaire by the age of 26 and I won't say that you can't do that
with apartments because reality is, I'm super inexperienced and apparently, this
is your niche so there's got to be a way to do it well and do it successfully and
it's working well for you. I think at the end of the day, I'm really just taking a
stand for the common everyday person like me that started out with nothing
that says, how do I get somewhere? And right now, if I were to step into an
apartment unit that had hundreds of units associated with it, we're talking
about a multi multi multi multi multi multi-million, probably in the tens of
millions dollar kind of deal and you know what? Those deals absolutely can
work, there's a reason why Donald Trump rose up multi-billionaire all over again,
buying skyscrapers. Do I think that the average American can step in that way?
No and maybe I could have but I didn't and what I'm doing is working, it's certainly
not broken. So multifamily, single family, I will say I think you can make both of
them work but at the end of the day, you got to get into reality. What is more
likely? Where are you going to have your greatest likelihood of success? And right
now, if I had to put ten of you on on a multi-million dollar apartment or ten
of you on an entry level single family home and let's just say that they cash
flowed the same and the growth was the same, which one's more realistic? I think
for you and I, the more realistic thing might be the easier to step into project
which is single family and for me we'll put it heads or tails over
something that I'm gonna promote and try to help you with to make sure that you
actually have a good shot of really getting started, as opposed to dragging
your feet are coming up with reasons why that projects too big, it scares me,
you know, if I lose on it I might lose everything, as opposed to something
that, you know, it's like an elephant, you can take it down one bite at a time.
Right now, that's a herd of elephants and that's a big project to take down
so for me, I'm just asking myself, at the end of the day,
assuming everything was equal, which one's more realistic? I'm going to go with a
single-family house. So did you like the style of this video? Is there anyone else
that you want to pit me against cuz I'm not afraid to go toe-to-toe and have a
conversation about what is best. I may not always be right but I certainly got
strong opinions and it's going to be based on track record and facts on what
I have done so go ahead and spit some comments below and let's get juicy.