The Science of Flipping - "We're In a Recession!"- Grant Cardone | You Need To Do THIS

Episode Date: January 9, 2023

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What do you think about real estate in 2023? Where's your head at with? I think the real estate business industry, investing, the biggest opportunity in my lifetime will happen in the next 18 months. all right guys listen i got uncle g here i appreciate you coming to this uh we need to be talking about what's about to happen in 2023 the recession building a business that's going to last that's what we got to be focusing on. There's not a lot of people out there that know where this is going. I don't have a crystal ball. I know you don't, but you have built something incredible over your business career. You've seen two full-blown recessions just going into your third. Is that right? Well, I've probably been through four of these little nasty things. The first three, I was not, like, I didn't even know what was happening. The first not like i didn't even know what was happening i

didn't the first one i didn't know what a recession was yep so i just started getting like i didn't really understand what was happening second one i'm like oh this this is not good bad news everywhere third one was 2008. and then um 2008 was like okay i'm getting my freaking i'm getting clocked here teeth kicked in right yeah we had three businesses, two got destroyed. And, you know, when it rains, it pours. So other stuff started happening at the same time because everybody starts freaking out around the world. So that's when the lawsuits increase.

That's when people are desperate. I got to have this and I need that. They're looking for people to blame. And it doesn't really matter whether you're on the right or the wrong. There's just collateral damage. That's right. And so I couldn't take advantage of the third one the fourth one people don't count as a recession but it definitely happened yeah it's coveted yeah and kovid man i i i flipped this thing and clocked code so this is exactly what i would say i crushed

covid yeah because i moved fast. I think a lot of people wanted to do this. Let me go sit on the sidelines and see how it shakes out. I think you and I are built from the same cloth. The second it hit, I dove into my business. I made very quick decisions and changes. And I made the same way you did. You're on a bigger level, but the same thing. I made it through great. But I think what happened in COVID is you were forced to, you didn't have choices in, in regular recessions. Even 2008,

you go through all these periods, you go through, okay, uh, it's not going to be that bad denial. And then it's like, Oh shit, blame.

And then it's anger. Okay. So there's a lot of resistance stages, like any loss you would have. A hundred percent. And COVID, bro, it was like 40 million people out of work in one day. It was wild. It was like violent.

It was the most violent thing that's ever happened in America, economics. Yeah. And so it forced everybody. Anybody that wanted to survive made moves immediately. And I think that's the difference. And there was no lying about it. Right. You know, everybody was clear. It was all over the media.

There's a virus and there's mask on and six feet and go get your shot. And everything was like that. So in 2008, it wasn't that. It was like, oh my God, this thing's happened. Then Lehman collapsed. And then it took time. It took like two years for the truth to come out. That's happening right now. So this year they they said we're not in recession. We're in a recession right now. 100% we are. Unemployment numbers came out today. They said they're not bad.

That's bullshit. Complete bullshit. I agree 100%. Right. They're lying to us. Inflation, we're probably already over inflation. They're not telling you that right now. We'll probably end up with more.

The supply chain thing is going to hit at the same time where people are going to be scared. We're going to end up with too much inventory, lower prices, blah, blah, blah. Anyway, that'll roll over next year. It's going to affect people greatly, but you're not going to be told the truth. So people are not going to be urgent to act. That's why we want to do this thing in January and wake people up and say, no, no, they're going to take your business from you. Immediately, we knew this to launch. And so thank you for getting this whole thing started, because this is super, super important. If you have like the first piece of advice going into a recession where do we focus like what is the focus for any entrepreneur or aspiring entrepreneur that might be thinking this is now

just assume that 40 million people are going to be put out of work dude i would act like i'm gonna 40 million people are gonna be put out of work in one weekend that's what i would go into january saying the entire world's going to shut down. You're not going to be able to get anything. You won't be able to get anybody on the phone. You won't be able to use your internet. Like just go violent, paranoid. Yeah.

And that way you're going to be right. Because even if none of that happens, you're going to act appropriately. That's right. Which is how people should act all the time. That's how I act all the time. I'm always acting like. Like you're broke. I'm always broke.

Yeah. But I'm always broke. Yeah. No, I like that a lot. You know, because no matter how much success I achieve today, no matter what happens today, I'm going to wake up Saturday morning and I'll be like, I'm starting over from zero again. Right.

I'm not starting from where I'm, where yesterday ended. I'm starting from zero. That's right. And so I keep accumulating like that. I't mean money I mean customer success and that becomes the unbreakable business that we talk about so let's talk about that because I think I'm a firm believer you have fully changed my mind and my business since San Diego when we were hanging out in San Diego about marketing being a hundred percent of it it is not just your lifeblood, it is your oxygen, it is absolutely everything in your business, right? Yeah.

It increased my marketing spend 40% overnight. And so- And you feel more confident about doing it now, right? Because you have permission now not to actually have to make money on it today. That's right. And to be able to have runway, so you taught me in San Diego,

if you do that spend, give yourself some runway so you can make the money over time in san diego if you do that spend give yourself some runway so you can make the money over time it doesn't have to be overnight yeah does that right yeah so let's talk marketing because i think that is a major thing that going into 2023 people are going to get tight on marketing that's what i believe they're going to cut off right it's already nationally it's already fell off 50 you know i was talking to you guys a couple days ago about the twitter thing about elon like he's losing all his um advertisers the truth is that's a red herring because everybody's lost all their half of their advertising advertising dollars are already off you're not going to see it in the headline anyway right right so what they're going to do is they're

going to everything's going to be a headline on housing it's gonna be uh you know employment numbers are good the cpi numbers all this government garble and and then um but what you guys should be doing is you should be doing exactly what other people are not doing you should be marketing and that doesn't always mean money right the first um from 2010 to 2000 probably 19 i didn't spend any money in marketing We've only started spending money in the last three years the first eight or nine years of it was organic complete And I mean that's it's a lot easier to buy an ad then to do what I did That's right, and but I wasn't quite sure that the marketing would work now. I know for sure it will so now I'm like okay Keeps keep spending the money long term all marketing works as long as you don't give up on it.

And that could be an Instagram post. It could be a story. It could be a short on YouTube. It could be something on TikTok or all of them, Snapchat. Like they all work. They all will sooner or later produce income as long as you have the third thing, which is do you have a way to monetize any of these activities? Yep.

We're going to spend an entire day just on how any person anywhere in the world, no matter where you are, you could be a waiter, a waitress, bartender. You could have a second hustle. You could literally produce more money from your home with a landing page, not a website. Um, then, then you could from your main business with no ad dollars. Isn't that incredible? Incredible world, bro. I mean it is. And so I would bring that into sales. What's more important, sales or marketing? Marketing.

All day, right? Marketing is, and if you'd asked me this 10 years ago, I'd say, oh sales, sales is senior. It's not true. Marketing, the sleep pillow guy, what's his name? Or MyPillow or whatever? MyPillow. Yeah, yeah. That ain't a better pillow. What's his name? Or MyPillow or whatever. MyPillow. Yeah, yeah.

That ain't a better pillow. It's marketing. I ordered two of them, got them, and threw them away. I'm like, this is garbage. I didn't know you had to put them in the dryer first. I think you've got to do something

to them to make them fluff. Yeah, yeah. And he said, you can return them. I said, dude, I ain't even gonna spend any time to return these. But I got to admire the guy for advertising.

That's it. It's the best pill. It's the best pill. It's the best pill. Coca-Cola, Wendy's, McDonald's, these companies, Disney, they're the best. They're the best. You know, these are just ad campaigns. It's marketing.

It's marketing. Higher education, colleges. It's a marketing program. Yeah. It's not better education or higher education. It's a longer education that costs a lot of money is what it is. It's marketing. Interestingly enough, I think you can always find a good salesperson

as long as you have leads, right? I mean, you know, every really good salesperson wants to. Find a crummy salesperson. And build them. No, and just take an order. Oh, sure. That's what I'd rather do that's it that's what amazon does there's no there's nobody taking there's nobody there's no sales guy there's no

jordan belfort right right uh at the other end supposedly the greatest salesman in the world like i don't need a line if you if you could do new marketing you don't need a line you don't need a special some kind of special trick or gimmick. Then they're going to buy your product from you. That's it. Now, let's spin that into real estate. You and I are big real estate guys. You are in the very big 200-door space.

I'm in the single-family, 4-door, 5-door, 20-door space. I was just talking to Ryan about how the three of us have to talk about how to do something with that. Because there's a bridge there between your world and my world. I don't think anyone's hitting it. You and I probably could hit that well. So we should offline talk about that. But what do you think about real estate in 2023? Where's your head at with? I think the real estate business industry investing, the biggest opportunity in my lifetime will happen in the next 18 months. Bro, that just gave me chills because I'm on the same page. I'll buy more real estate in the next year, 12 to 18 months,

than I bought in my entire career. Maybe times two. At a fraction of the cost. And the reason being is you actually think based around the recession... No, I know, 1,000%. It'll be on sale. It's not really even about a recession.

The real estate, what's going to happen when real estate has nothing to do with the recession? It has something to do with the Fed. Okay. The Fed is raising interest rates because they raised interest rates two years ago, a bunch of... This isn't single-family home problems.

There's some of that there, but the bigger opportunity is going to be in the stuff I'm doing 200 300 400 unit deals yeah and by the way those deals are easier to buy than your deals are believe it or not we need to know more about that I can accumulate more property in one transaction than you that's right and there's some 100% and it's worth cheaper costs per door per door that's right and there's some 100 and it's one cheaper cost per door per door that's right legal's lower uh closing costs are lower the debt's better yeah and and i don't need it i need a lower credit score will buy my 300 than by your single family yeah yeah no i'm

not even arguing the point yeah no i can't but yeah i did your deal i did that i that. And I'm not saying there's not going to be opportunities there because there will be opportunities there. But it's not going to be as a bloodbath, bro, because the bloodbath, like if I had my little board right now, I would show you in the last 24 months, there was a bunch of groups like me, like, like like bigger than me, guys that have 10,000, 50,000, 100,000 units. Well in the last two years they acquired another 2,000 units. So let's say they bought 2,000 units in the last couple years and they took out on those 2,000 units, not to be too complicated, but they took out, let's say, I don't know, $2 billion worth of debt. Could have. Yeah, that's right. Well, that debt, their business plan was to trade these in three years.

That's right. Next year. 2024, they were going to trade them. They were going to go through 2023. They were going to add kitchens and floors and do this to have this business plan and but the problem what happened was and they need a new loan okay well that loan's going to be coming due right now and they're going to go into what's called a technical default it's a little complicated not really but because we're not educated on this all that's going to come available for sale yeah and it's not gonna be whether it sells or not it's gonna be oh it's gonna sell period

because the bank's gonna be like you have to readjust that loan this stuff is gonna be like everywhere best opportunity you you you you could you could go into this start next year somebody with nothing and it could become worth a tens of millions or hundreds of millions of dollars if they have the right business plan and by the way this involves marketing it involves sales because when I'm buying a deal like this I have to be I have to be more salesman than buyer that's right I can convince them to pick me that's right because it'll be 20 of you so you got yeah I'm the right buyer for you yeah

same thing in single-family right yeah yeah I mean listen my world I have guys that aren't your competition but I have the Blackstone's who's buying a bunch of single-family that's right I just saw I think it's I ll is that the right name they just they want to have a billion single-family residents JP Morgan's didn't do a billion Goldman Sachs once a bit put a single family rent single family and those single families the benefit of yours over what I do is your rents are going to be higher long term than my rents will ever be. So that's what they're targeting. Higher rents per door. But I need your rents to be higher because they're going to pull mine up.

That's right. So we both win. So both angles can be great. 1,000. In a recession, look, if Fed rates stay high where they are, housing in America is done forever. And you'll go from a 60% ownership of homes in this country, and it'll flip. It's a 60-40 right now, and it's going to flip over to where the greatest economic opportunity in America today is rental properties, like what you're doing.

That's it. And listen, we're going to have plenty of conversations off camera about how I get into the space that you're in, because what you're doing. That's it. And I'm going, and listen, we're gonna have plenty of conversations off camera about how I get into the space that you're in, because I love that space. Barrier of entry is the biggest challenge, right? When I was broke sleeping on a couch, all I knew is how do I get an $80,000 house in Phoenix, Arizona?

Yeah, for three grand, yeah. So it's like, that's all, and for most of the people, they're thinking that way. It's hard to compare how do I get 200 doors. You do it one time, I'll show you how to do it one time yep and then you'll do it ten times I've got 2,000 doors you you could accumulate to how many doors you have right now 14 14 doors 14 you could have 2,000 doors at the end of next year oh by the way that's my goal I want to tell you how to do it you need 10 deals

200 units 10 deals bank boom boom done maybe maybe we got to do it all the way into 2024 and it takes half the year of 2024 sure but you know you'll be set bro you'll be set for life those units in the next in 2032 let's say we get you 2 000 units okay in 2032 those rents are going to be 2 000 units times let's get 2 000. three grand your the rents will be to be 2,000 units times. Let's get 2,000. Three grand. The rents will be 3,000. Medium rent. That'll be $6 million a month.

I could live off that. Yeah. I mean, you'll probably net, you'll probably net, you know. A third of it. No, maybe, maybe, maybe 10%, 8%, 10%. But still 240,000 bucks a month. Net, net, net. I love it.

Yeah. Give me, give me that blueprint. But this is what we need to be talking about an unbreakable challenge bro so that's what we're going to do in january we're going to we're going to do a five-day event the first day is like how do i shift his decision making from what he's doing successfully how do i shift your decision making from whatever you're doing right now whatever you're comfortable doing i'm gonna shift it to something bigger like i know you guys got excited when I started talking to him about okay yeah that's cool that's cool what you're doing you can keep doing that but bro what if I could show you this one time you do it one time and it works I

promise you you're gonna do it ten times yeah so that's what I'm gonna do with you guys you want you got a million dollar business I'm gonna show you how to turn it into a ten million dollar business next year twelve months I mean I'm not playing with you I'm not this isn't over promotion it's completely free yeah just come for five days if it doesn't work it didn't cost you anything but the five days you don't have to go anyplace I'm gonna send it to your phone your tablet your computer he's coming that's it I'll be there I would tell you this even if you're not really going in business you need to be here to get going in business yeah the

same thing whether you're in business and this is where I get to. Unless you want to be a waiter forever. Okay. If you want to be an Uber driver forever, cool. That's it. Probably don't need to come to this. Yeah. But if you think maybe that someday in the future you want to do something different for your family, for your dreams, for your charities that you want to help for whatever. Even if you just think that maybe you have more potential than you're using.

Here's what I know to be true. You and I have one thing heavily, heavily in common. That's going to be the real estate. Everyone wants to be in real estate. It doesn't matter. There's too many shows out there. Everyone wants to flip these house. Everyone wants to be the next Grant Cardone and buy 200 units at a time.

Real estate is the game in my world. That is all I really care about in terms of business. I know you have multiple. Well, those other businesses, okay? We have a business called Cardone Ventures. We probably have 400 companies that pay us every month to work with them on their operations, their expansion,

their plans, execution, et cetera. I don't know of anybody in those 400 companies that is not interested in real estate. That's it? These are plumbers, HVAC, dentists, chiropractor. Like every single business owner I know has some interest in this passive income, tax depreciation, the tax loophole industry

called real estate. Wouldn't you even tell a freakingicking accountant, go buy one. If the best you can do is buy one single hand family home. I mean, it is the best. There's no, you buy one a year. You got 10, 10 and 10 years. You're just going to look back in the 10th year and say, damn, I should have done all 10 in the first year. That's it.

That's it. But you got to start somewhere. That's the point. Exactly. And you're going to spend money on real estate no matter what. It's like food, water, housing. Right? Yeah. You know. You've got to be in the game.

Maybe a car. Like a car. Somebody said, why do you lease your cars? I said, dude, when I buy a car, it's going to be a whole car dealership. I want to make money on the things I buy. I love that. I've subscribed to that until recently. My Cuban wife wanted a house in Miami.

So I said, all right. I respect it. We'll do that. You've got to get till recently. My Cuban wife wanted a house in Miami. So I said, all right, I respect it. We'll do that. You've got to get her something in Hallelujah. Guys, this Unbreakable Business Challenge is something that I am so fired up to be a part of. I'm so thankful for Grant to invite me to help change your guys' lives.

He is the guy I look up to. He's someone that I admire. And not only admire, follow his blueprint. I'm literally talking to him about how can he get me to this next level? If you want to be in my circle, this is my circle. Get next to me, be a part of this challenge. This is what's going to be happening for 2023, 2024, 2025 and beyond. It's a blueprint that will last in any business cycle.

That's what we're going to be going over. It's the 24th to the 28th. We actually planned it to be right around the third week of January because that's the time when people are now starting to give up on their New Year's resolutions. It's also going to be the time, I believe, that when the real news of what's going on is going to start coming out. And so, you know, if you're concerned about your family, concerned about your business, concerned about your job, you're being lied to by the government every single day.

This is, and nobody ever says, oh, Grant, how do you know that? But everybody knows you're being lied to by the government. CPI numbers, the unemployment numbers, inflation numbers. They literally lied about us being in a recession because they changed the definition of it. Like, it's crazy. Well, you can't have Facebook and Amazon, I believe, as those two. Facebook, Amazon, Twitter, Google. They all let people go, bro.

Mass layoffs. And the unemployment numbers didn't go. How is that possible? By the way, we lost a million people in the mortgage industry in 2022, and nobody's talking about it blackrock wrote off 1.7 trillion dollars in march you can't even find it on the internet now isn't that crazy so uh biggest single write-off in the history of planet earth and nobody knows this even happened of course and it doesn't hit a headline and everything's just fine and and our stock market keeps going up it's it's insanity and you guys know that to be true so the the shoe's gonna fall it's gonna fall it's gonna

fall in 2023 and we we are spending our time and energy a million people get access to this you need to be one of those people bring your family like you're bringing your family that's it bring your employees it costs the same nothing okay and there a guarantee. If you feel like it's a waste of time, I will give you 100% of your money back. Yep. Done. I mean, how much better can you be of that? So guys, you need to be there. You need to bring all of the people you care about there. Again, like I said, I'm heavy in real estate. He's heavy in real estate. We both believe real estate is the game, regardless of great economy, poor economy. Real estate's the number one game. But building a true business that will last all economies, that's what you're there for. That's how you

fund your real estate. That's it. That first business, that thing you're doing right now, whatever it is, you're waiting tables. Waiting the tables is what's going to buy that real estate. That's 100% right. Yeah, man. Appreciate you, brother. Appreciate you, bro. Absolutely. See you guys there. Peace.