hey man you got an exit what you only hit 113 on squat rack ten exit man make
it a thousand we could have fit 1100 bro who cares if you die you got ten exit
bro yeah hey guys what's going on didn't see you there my name is Daniel Kwok
excuse the cheesy intro because I like to be funny occasionally and I know how
it gets when you're watching these videos right you get bored you're
probably watching this in your car right now and you can't even see the screen
well if that's you then that's okay cuz I do the same thing too and in this
video we're gonna talk about why I disagree with Grant Cardone when he's
telling everybody to do syndication so let's go ahead and queue that inch but
let's get right to it alright guys welcome this is Daniel one half of the
Kwak Brothers and guys listen you know as much as I love Grant Cardone as much
as I loved his books and as much as I loved his videos on YouTube there is
something that I would respectfully disagree with Grant in terms of what he
said the last couple years to telling everybody to do and well what hasn't he
been telling everybody to do well you know the last two years you know I keep
my eye out in the real estate investing world and what other people are doing
and I've been hearing a lot from other people that Grant Cardone is telling
everybody to do what's called a real estate investing syndication now what a
real estate investing syndication is it's either a 506 B or a 506 C according
to your law in terms of how companies get structured in terms of entity
formations etc etc but long story short it's pretty much when you get a bunch of
people you pull their money together and you pretty much raise the equity or the
debt to be able to buy a larger asset so you as a syndication manager or a
syndicator you're pooling a lot of money together to buy an asset at the end of
the day that's pretty much what you're doing now a 506 B or 506 C paperwork may
take a lot longer than a simple LLC creation but let's talk about why I
respectfully disagree and let's talk about how to raise money as a beginner
because guys let's be real can we a moment of honesty here let's have a
friend to friend talk let's imagine here there's a little fireplace right between
me and you and there's marshmallows and there's chocolate you know and there's
strawberries and you know it's a very nice intimate moment and let's say we're
just talking right we're in my backyard and you know we're talking and you're
asking me about real estate investing right ninety percent of you watching
this video probably either have not done a deal yet or you haven't done you know
or you haven't done too many deals right maybe you did one or two three here and
there right but let's be real if you're watching this video you're probably not
a multi-million dollar real estate investor right at least by chance
probability speaking ninety percent of you probably not there yet right so
that's the part where I get a little disturbed at what Grant Cardone is
telling people to do at the end of the day what our syndications well like I
explained before if you're pulling a lot of more money together number one you're
increasing your chance of liability right you're increasing your chance of
liability by bringing on more partners in smaller increments and guys let me
tell you my personal experience I've been doing real estate now for about
five six years and you know at the Asian I'm at I'm doing decent right now my
guys 100% you hear you're gonna hear it here first
I'm not as successful as Grant Cardone right I don't think that's a secret
Grant Cardone owns a ton more real estate than I do right but I also own a
real estate investing education company and I've heard a lot of my students say
well Daniel I want to do a syndications and I'm like why what I'm hearing is
that you're not taking the time to master this craft and build your team
and we've got a lot of people out there that are doing syndications
even despite not having taken the time to master this craft and to build a team
and that's nothing against you guys or anybody trying to do syndications I
think I speak for myself and you and a lot of other people when I say that at
the end of the day we're just trying to put food on the table for our family
we're trying to build a legacy we're trying to get that passive income and
we're trying to create an empire right so there's nothing wrong with that right
there's nothing wrong with that whatsoever and third reason is well if
everybody is doing syndications because guys
cardones a large figure right he's a very popular individual and you know
he's kind of taken over this real estate investing world in terms of what's
popular what's not right he's right up there with the best and what worries me
is that when everybody is doing syndications
and at the same time you've got a lot of foreign buyers and at the same time you
got a history in a moment in the United States economy where the money is so
cheap because of the low rates because of what's going on in monetary policy
well what does that do to your real estate investing multifamily market it
changes a lot it raises up the price it raises up the value and it puts us in a
position where we're headed towards a bubble it puts us in a position where
it's an oversupply of capital right I was reading an article this morning
multifamily has gone up from 15.6 percent to now it's like closer to 30
percent guy that's a scary thing when you have that big of a jump going into
apartment complexes going into multifamily buildings you know that's
not a good thing it raises the price and that's part of the reason why I haven't
done a multi-family deal in two years because I've actually respectfully held
off because I saw the amount of competition happening in the marketplace
the last apartment building I got guys was a 24 unit building and I had to
compete against 16 other offers now granted I still got to deal because I
was able to provide some value to seller that not a lot of other buyers could
provide because I asked questions and I actually got to time to get to know the
seller and his or her problems I was able to get the deal but I think you
guys get my point in terms of there's an oversupply there's a there's a very high
competition market for multifamily and apartment buildings which 99% of the
time if you're putting together a syndication like Grant Cardone was
telling you to do those are the type of you know properties and assets that
you're going to go after another reason is that typically syndications happen
with individuals who have already done a good number of deals right a good friend
of Mike Joe Fairless which if you guys want to check out his channel go go feel
free to do so he's done a lot of different real estate deals before ever
doing his first large syndication and you know he's kind of take
the right path of educating himself and doing a bunch of smaller deals first and
in making sure he's got the team before doing something like a large real estate
investing the Kishin deal and a lot of people just get romantic and they get
starry-eyed with doing a 5 10 15 and I've heard an individual who's never
done a deal before go after a 56 million dollar syndication deal and guys at the
end of the day let's think about what's going on from either and number one
you're putting yourself in a position where if you make a mistake because guys
it will happen right I've done a lot of real estate deals in the past the
mistakes will happen you're putting yourself in a position where those
mistakes are gonna cost you so much more as compared to learning the same mistake
but doing it at a smaller scale first to where you're not destroying yourself and
let's look at the other end of the spectrum the people investing into your
syndications they're investing their money with somebody who doesn't have a
whole lot of experience but because everything seems great they're gonna
invest their money anyways well you're putting them in a position where their
risk is significantly higher right because of the individual actually doing
the deal and at the end of the day guys what I've learned is the property
doesn't matter as much as the person in the driver's seat like that person
matters so much more their level of competency and knowledge and team
building and their business planning it matters so much more than what the
property actually performs as and as much as you guys may scratch your head
when I say this I would much rather buy a property at 5% cat break but have a
phenomenal business plan and a phenomenal team to execute it then buy a
property at 10% cap rate and also you know have a horrible team know business
plan I just buy it because it looks good 100 percent guys so let me share with
you guys some techniques on how to raise money as a beginner well there's a lot
of books that I've read in the beginning of my career that have really helped me
raise money and helped me a study so number one thing I would recommend
people do is partner with somebody that is already experienced and be the person
bringing the money to somebody who's already
experienced in real estate that's something that's very valuable to them
right an individual who has raised a couple million or something like that
right has raised money and they're able to introduce the investors together and
whatnot guys that's really really helpful now obviously you want this
experienced individual to actually know they're doing but also really high
integrity so this is we're talking to other individuals about that person is
going to help a lot and also another thing go to as much meetups as you
possibly can and ask the question what's the number-one problem I can help solve
for you in real estate guys that's actually how I first raised money
quote-unquote as I would go to a lot of different networking events I will go to
a lot of events in general and I got in the habit of asking people hey how can I
help you with your business right now and eventually as I began to have more
and more conversations I started having people say well I've got a lot of
capital right now and I want in Vettes and I want invested into real estate I
just don't know how right and I would set up one-on-one meetings with these
individuals and I would ask questions and get more in depth on what they were
exactly looking to do with that capital I say hey how can I be of service to you
right instead of thinking about you and yourself you know try making it about
other people and their needs right at the end of the day that's what
entrepreneurs and business owners do they make it about them you know about
other people instead of themselves right even the best entrepreneurs they create
a product or service that serves everybody so that's what I do guys I go
to these networking events and if I'm a beginner and I were to start off all
over again and I and I didn't know any of my investors that's what I would do I
would go to networking events ask you know how can I add value to them
I would partner with somebody who has already done a lot of deals who has
experienced and provide the value of bringing the cash flow of bringing I'm
sorry the capital not cashflow right you can bring that to I guess in some ways
but bringing the capital all right that's gonna put you in a position where
you're actually able to learn how to do deals by actually doing it by being a
partner and by seeing real-life scenarios and for me guys that's
personally how I got started in the world of real estate investing and so
that's what I recommend to you guys so again get nothing against Grant Cardone
and I'm sure he means well but that's just what I would have to risk
we disagree with in terms of what he's telling everybody to do so again guys
hope you enjoyed this video give us a thumbs up guys it would really help and
guys let's imagine that for every thumbs up this video gets that's how many
millions of dollars you're gonna make this year you guys like that cheesy line
but thanks again guys for watching this video I'll see you guys in the next one