Stepping Up with Ryan Tseko

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world. Now here's your host.

Welcome to episode number 160 of the Insider's Edge to Real Estate Investing. This is your host, James Nelson. And today we have with us and this was another one of the in person interviews that I've done here in my office that some of you might have seen live streamed on Instagram with Ryan Zico, who is from Cardone Capital. And wow. I have been watching what Cardone has been doing and it is really unbelievable the type of content opportunities, training that they put out and Ryan is a big part of it. So you're going to definitely follow what he's been doing. Ryan started his career in the Miami metro area and he's completed the acquisitions of over $2.9 billion of properties. He holds a BS in Aviation and Airway Management from Utah Valley State University. So we'll start off talking about his career being a pilot. Growing up, Ryan observed his uncle who was a builder and gave him a job at the age of 13. While Ryan had an interest in real estate from early on, he decided to begin his career as an airline pilot and continue with that trajectory for 10 years. Along the way though, he invested in real estate, building up a portfolio. Then he met Grant, a renowned business expert and real estate investor on YouTube and wanted to get involved with him to pursue his career. And so Ryan called the front desk of the company and asked for an interview and walked in that same day. And from there the rest is history. As they say. He did weekly calls with the properties to track performance, carried out diligence and his quote is partnerships aren't just internal, they're external and they're powerful. Over the next years, Cardone capital expanded from 200 investors to more than 13,000. Amid that growth, Ryan his team wanted to prioritize investor relationships. He says more than 90% of his investors have talked to a live person in the office. Today, Cardone Capital acquires and manages real estate portfolios with a focus on on both near term income generation, long term value creation. Since 2016 has raised more than $1 billion across 22 funds. Its portfolio consists of more than 12,000 multifamily units across 36 multifamily properties with over 500,000ft of commercial space. Ryan cites parallels between aviation real estate, including the value of being trainable, having checklists and following processes and procedures when flying. He says there's a rhyme and a reason for everything and I truly believe the same for real estate. So again, you're going to want but definitely check out the show notes on this episode@james nelson.com where you can also find a lot of useful tools to give you the insider's edge to real estate investing. So if you're not following Grant Cardone or Ryan Zico and Cardone Capital, you can find them on Instagram, YouTube. Again, all the links are there in the show notes. So we're going to have a brief word from our sponsor and I'm going to get right into that interview with Ryan. Zach ZCO.

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Well, welcome. Yeah, thanks for having me number one. And I've heard a lot of great things about you and just looking to add value. So thanks again for having me.

Awesome. So Ryan, first question, I've got to ask how you got up here because I know you're a pilot.

Pilots? Yeah.

Did you fly your own, what Was it, a G550? Is this what you're, you're certified in?

Maybe so, so, so I am certified in the G550. But but for me right now I don't fly like I haven't flown in in and been the lead captain for four years for the, the Cardone Corporation. I just flew American first class. Okay, that works. And we were actually the crazy thing is is you know when we're, we're on the ramp in Miami and these Storms come through. Right. And there's lightning and all this stuff, and the. That the pilot's timed out.

Yeah.

And for me, all I'm thinking is, like, just put me in, coach. Just put me in. I can do this. I can do this. But, no, it's. It's been a great transition for me. I've. I've worked my way up into, you know, EVP and really helping Grant run Cardone Capital. And we started out with our first fund, our first deal, and now we're at Fund 22. We raised over 1.1 billion from retail, which is the crowdfunding, and we have 12,000 multifamily units and also some office. And so it's incredible. And I was telling Christian, I feel like we're just getting started.

Yeah, it's amazing. And I just love watching your stuff and not just watching it putting into practice. And we're a big fan here. And with the program, it's not just the knowledge, but it's putting into action. And I know that's what you all are all about, so.

Yeah.

But, yeah, I want to. I want to go back in your story. I want to get to this incredible platform that you all have built out, but maybe tell us a little bit about yourself, kind of how you maybe found your way into the business. So was it through being a pilot first? And that's. That was your first introduction to Cardone, or how did this all come to be?

Yeah, yeah, yeah. So my uncle was a builder when I was growing up. And so the age of 13 years old, I talked him into giving me a job just picking up nails and, like. Like, really getting around real estate. For me, real estate was always the end goal. I just woke up, I was 17 years old, and I wanted to do my first investment. He looked at me and said, son, you don't have any money.

Right?

And so he was always. My uncle always wanted to be an airline pilot, but he got scared. He took off one day, got terrified. He had a family, and so he quit flying. I was 17 years old, literally 17. I just got my. My. My license, and he bought a little Cessna. And so I started flying this airplane. Looked at him one day. I'm like, man, I could actually get paid to do this. And he's like, yeah, you can get paid 100 grand a year. And I'm like, yes, let's do it. Because 100 grand is a lot of money. Like, especially when you're 17, 18, 19. And so at the age of 21 years old, I got hired on at a commercial airline. It was United Express. I was based out of Chicago O', Hare, flying a 70 passenger jet. And I like, like, I thought that was going to be my career. And I was going to invest in real estate, kind of like part time and, you know, do fix and flips and fourplexes and that kind of thing. 2008, 2009 happened. I started investing in real estate, had 21 units. Thought I was like a real estate mogul, but I hit 30 years old and the rules started changing. Everything started changing. The world started changing. Social media. I'm like, well, what's next? And I literally, I found Grant Cardone on YouTube. This is crazy. Like, this is wild. Like, you can't make this stuff up. It works. And so I called him, right? So here I've, I've built 21 units, doing pretty good, and I've built a career as a commercial airline pilot. So I've got, you know, good seniority, good time off. And I said, what would, what would change? What would happen if I took this leap and said I'm going to give all that up to go and work for Grant Cardone? As we all know, he's, you know, the leading entrepreneur in real estate and, you know, he runs tremendous events and he helps a lot of great people. And I was like, what if I went to go work for him? Because that was actually the ideal scene for me when I started in, in, in, in aviation, the ideal scene was, okay, go put your time at the airline so you can go and work into court. Because as you had mentioned, the G550 is a lot different than flying an Airbus or a Bombardier or something for the airline. It's just different. Like, you fly with one family, you travel around the world, you look at a lot of real estate, but you always come back to the same airplane. In the airlines, you literally don't know what you're going to show up to at. It's dirty. It's, you know, passengers going in and out. Like, it's just a completely different lifestyle. And so when I got onto his team at 30 years old, through a bunch of grit, you know, real estate is really important to me. He realized that very soon after I started and I started doing both. And I was with him. I tell people I've been with Grant for nine years, almost 10, but the first, you know, five years I was with him every day. Amazing. And he's, he, he's like, he's like, you know, from a multifamily standpoint, he already had 3,000 units. He operated a lot like as, like a family office. So it was him and I and we had a management, third party management company that we would manage, but it was literally just him and I and all of his friends started calling me saying, hey, I want in. Hey, I want in, I want in. And that's when the rules changed with the sec, where we can start doing crowdfunding on social media. And that's really where it, it took off. Amazing.

And I, I want to get to that. But, but I've got to ask. The training that you had as a pilot and what I, I know nothing in it about, it's intense. But I, I've got to imagine the countless hours, the preparation. But if I'm not mistaken, you know the whole idea of a checklist and we all have them now on Microsoft or wherever came from pilots and obviously having that, you know, that list and that game plan, if you will. So how much of your training as a pilot has carried over and has helped given you the edge in real estate investing?

Well, I think it's, it's, it's given me and a lot of other people the edge of. I think there's two parts that I always tell military guys this too. There's a lot of training. Like if you're trainable, you can accomplish anything you want in life. Most people aren't trainable. Most people won't put in the time. When I commit to something, I'm all in. And so literally from 17 to 20, all I did is eat, sleep and you know what? Aviation, that's all I did. Like, like, because I wanted it to be prepped. When you get into the airline, that's actually when the work begins. Same in real estate, right? When you're looking for a deal, when you get actually find a deal, that's when the work begins. When you get into a deal and you're doing due diligence, that's when the work begins. When you buy a deal and close on the deal, that's actually when the work begins. And so all this stuff is translatable because number one, I'm really good at training, number two, I'm really good at following checklists. And number three, like the checklists are there for a reason. Like you are there for, like you follow those because. And also in order to scale, you have to have processes and procedures. That's all it is, it's a process, it's a procedure. And the checklist tells you what time and place to hit the buttons. Like when you walk into a flight deck, you have to have a checklist, because if you hit this button before this button, then the engine will shut down or, you know, this will happen, and the lights will shut off. Like, there. There's. There. There's a rhyme and a reason for everything. And I truly believe the same for real estate.

That makes so much sense. And I would also assume that if you're looking to build something, if you're looking to scale something, you need the playbook, and you need something to replicate. So I. I could see why that perfectly translates. So if you're joining us now on IG Live, I'm here with Ryan Zico, who is the VP at Cardone Capital. Super excited. Flew up from Miami. He's here with us today and bringing value. So, Ryan, I've got to ask. And you talked about seeing that YouTube video 10 years ago and reaching out to Grant Cardone. Now I get maybe a dozen requests a week. Hey, James, you know, do you have a job? Can I come work with you? But, like, I've got to assume Grant gets, like, thousands of requests, so. Yeah, I can't imagine it was as easy as you just lobbying in an email. Hey, Grant, you know, would you take me on? I'm sure that alone probably took a little bit of effort to break in. So any and any words of wisdom, someone who's trying to find. Find their way into your office.

So. So. So now it's completely different, right? Like, it's careers at, you know, Grant cardone dot com. And when. When certain things happen in the economy, whether it's, you know, pilots or tech or something happens, right? Like, during COVID we have a lot of people reaching because they wanted to come to Florida. And so the email, like, thousands of people will now request a job for me. Back then, Grant had probably 20 employees. And I'm always the type of guy where I just pick up the phone and I want to talk to people. I'm like, hey, how do I get an interview? And so I literally called his front desk, and so I just skipped the email. I skipped all that process. I said, when can I get an interview? And who am I going to even interview with? And, like, Jared Glant and Sherry. And I'm like, okay, well, I'll be down there tomorrow, literally, because I used. I use my angles always. Like, if I'm a pilot and I got free jump seat passes, I'm gonna jump seat on that airplane, and I'm gonna be in Miami the next day. And so that's literally what I Did. And Jared and Sherry, they looked at me, they're like, you got real estate, you fly airplanes. Grant doesn't even have an airplane yet. Because when I saw this interview, he's like, you want to be around people who are doing something great. And he's like, in the interview, he had mentioned that he was going to buy a Gulfstream G200. And I'm like, well, how cool would that be? And I told my girlfriend, which, by the way, she thought I was batshit crazy at the time. She's like, you wanna go work for Grant Cardone? You're gonna give up the United. You're gonna give up the 401k, you're gonna give up all this stuff? And I'm like, yeah, yeah, I really am. Because I knew that this real estate, you know, in, in, in, in flying, you can only. There's only so much time you have to trade for money. In real estate, it's infinite. Because if you could put the right deals together, they work for you even while you're sleeping. And that's really how, how we've built this Cardone capital out too, is because a lot of people want to invest in real estate. They just don't have the time, energy, or effort to put the deals together and do all that stuff. So, yeah, I mean, look, I, I, I, I called him, I said, and I didn't even interview with Grant. I just said, hey, look, what position do you have? I'll take it. Yeah. And so two weeks later, I started, I met Grant's wife. So I don't know if you know Elena Cardone. She's incredible. She's no of her, she's a complete badass. And she does the events now and she does a lot of speaking, but her and I connected because, because the, the, the, the, the things that we all want to achieve, like, sometimes it's not just about Grant, it's about his team because Grant's moving at such a fast pace. And so I told Elaine, I'm like, look, I fly airplanes. I've got almost 10,000 hours. I love real estate. And by the way, I love helping people. And she's like, does Grant know about this? I said, no, I need your help with this. And so Elena, I say all this all the time is Elena. His wife actually helped me so much early on in my career, getting in and getting around Grant and really launching us into what we've created now. Wow.

You know, I love the fact that you just were ready to jump in and take the leap, and there's so many. I do a monthly career advice session and so many people, they get discouraged. Oh, I've sent so many emails, I've tried to link in with the person. So look, this is an in person business, right? So if you're afraid to pick up the phone and make the call or just show up at the office, you know, then maybe this isn't the right thing for you. So I love the fact that you just stepped up, you got the opportunity and you went for it. But look, I can also see why your girlfriend was saying, you know, are you sure about this? You got a good paying job. You know, you were willing to take that risk for the long term. So I'd love to hear about those early days because I was very lucky when I got into the business to start my career with two incredible men, mentors who are still my mentors today. And I literally sat five feet from both of them.

Right.

And they did not sit down. Sit me down and say, okay, James, I'm gonna teach you the real estate business.

Let's.

You know, we were. Things were so crazy that I learned by listening and just absorbing. So I, I can't imagine that. Well, I mean, look, you all have a business of training and programs and so maybe just being a fly in the wall and hearing others get trained that maybe you were absorbing. But how much of that learning, your real estate IQ came from just observing what Grant was doing or was he. Was there formal instruction? Tell us about those early days.

I was telling, I was actually telling Christian this yesterday. With Grant, there's there. And really with any high revving entrepreneur, there's not like a formal instruction where it's like, here, I want you to study this and we're going to do this role play tomorrow. Right. It was literally like, here's the wolves and here you are. Welcome to, welcome to real estate. Right. Grant has always put me in, and I always call it the put me in coach moments. Right. And at first it was really awkward. I. I was really. I'm a really awkward guy. Like, I'll be the first to say.

It, you know, when you got me fooled. But.

Okay, no, but, no but, but what I'm saying is like you, like it's awkward when you do something for the first time. Sure. You know, when you have to call somebody and you know, ask for this or do due diligence or set up team. Like, like, like you weren't just born with this. You know, I've done, I've done a lot of buyer interview calls and they don't all start out where you're like, oh, yes, here's the insurance and here's the taxes and here's this, and we can close this. And here's the due diligence time like it is now. Right. Because it gets easier when you're into it for nine and ten and plus years. Like. But when I saw Grant in the real estate game, there was a lot of observing, for sure. Because, you know, Grant leads by example, probably like your mentors. And I'll go back to this, too. Mentors for me have literally propelled me to where I am today in every five to seven to 10 years of my life. Because in aviation, I sat by the top pilots to get really good. Because you don't want to hang out with the okay pilots when you're flying. You want to hang out with the best in real estate. You know, we did a lot of phone calls. We did a lot of. We've done a lot of deals, but it's really just been through. I've learned this game by getting in there and taking on the responsibility. But also taking prime example, when something comes up in a deal, we were doing a multifamily deal and we found, we found some issues with the title and the property and due diligence. Right. Grant doesn't say, here, let me sit you down and I'm going to walk you through how to do this. He's like, okay, here's the three people you need to call. You call them, you come back with three solutions or one solution or two. You go and find the solution, and if you have any issues, we'll sort it out. But it's never been like, okay, here's the playbook. Because as you know, there's no playbook to this game.

I love that. Because clearly he has confidence in his people. Because if you really want to scale a business, you can't micromanage everything. You can kind of point people in the right direction, but you also have confidence that they're going to, you know, go out and try to do the best they can. And look, they'll make mistakes.

Right?

But I'm sure you know those mistakes every time, as long as you don't make the same mistake twice.

Yeah.

So what did he have you doing like, that first year or two? So you show up, you're flying all over the place, you're looking at properties. Are you helping with, you know, diligencing the properties? Are you sourcing deals? Kind of. How did you get your start?

So I've done it all. And I still do it all. What he was doing is, is so initially I was like an asset manager and then in acquisitions, but I was literally going around site to site and figuring out, starting with the. Because when you have a portfolio of 3,000 units, not every deal is performing at 94% and, you know, Mac Max occupancy and pushing rents. So I would literally go, Daphne, Alabama. I went to 344 units, and I was leasing and I was, you know, swapping out the teams. And he really wanted me to get gritty in the business. So that way I knew what everybody was dealing with and what everybody was going through. And so I was doing a lot of these weekly calls with the properties and I was tracking their performance. And then we were buying deals, and I would run due diligence on the deals, and then we would get debt on the deals. And so I was running the debt with the brokers on the deals. And I didn't know, like. Like I knew about real estate, but I didn't know the ins and outs like he did. And so really, he just put me in every vertical one at a time in these cool gradients. And then we got to the point where we're buying, you know, three and four and five deals a year. And, you know, two years ago, before this whole interest rate and, you know, stuff happened, we bought 3,000 units, we closed on four deals. It was like $750 million in one deal. But it's really. It's really been a combination. You know, he's really entrusted me and put a lot of responsibility in my back because I want it. And I always tell these folks, like, I want more. Like, I'm bored right now. I want more. You know, at 12,000 units, I feel like we're just getting started. But I. I work through all the verticals, and what happened was we actually built a really good team. And some of them are in house and some of them are third party. Actually, the majority of of. And I've got a great team. It's 30 in Miami. And then we have like 350 over the properties because we partner with RPM, the third party management. And then we have the 10x umbrella underneath that. And so we have a lot of cool employees and they're 10x. But what I found is that we built a really, really cool team of attorneys, whether they're third party and team members, to really help us with these deals to keep them moving even faster. I think a lot of people get hung up because they're like, oh, I don't know how to do this great. You got to find a really good person. And if you don't work well with that attorney, you got to call who's the next attorney? Like, who's the next. Like I've done with this one attorney. His name is Tony. I've done over $3 billion worth of transactions. And when he calls me, he doesn't call me and say, hey, Ryan, we got seven issues. He calls me and says, hey, Ryan, here's seven solutions. What are your thoughts? And I'm like, go get the deal done and let's move on. Like, like that's the type of thing that people need to understand. Like, this is not just Grant Cardone and Ryan Secko and the team. It's like it's outside third parties. Like, our biggest partner is the bank. One of our biggest partners is the bank. I've done a lot of deals with New York Community Bank, Fannie, Freddie, Tiaa. We have great deals. And so you realize that partnerships just aren't internal, they're actually external. And those are the most powerful.

No doubt. And this is definitely. I learned from the first podcast interview that I ever did with Bruce Ratner, prolific developer here in New York, has done over 50 projects, built the Barclays arena, where was a part owner in the Nets.

Nice.

And I asked Bruce, like, how did you do it? How did you scale up this business? James, it was about the people, right. And getting the right people who had the expertise.

Yeah.

Went back and counted. He said the word people OR team over 50 times in an hour long interview. And I'm thinking, you know, maybe this business has something to do about the people and the team and the specialization. And that's something that I address right at the beginning of this book, is you need to have your deal team, but it's a deal team of specialist. So, like, don't go to the, your family's generalist attorney who did your estate, you know, planning. You want someone who is a transactional real estate attorney. And if you have questions about, you know, landlord tenant issues, you're going to need to get a specialist or a zoning attorney. But, you know, that being said, not all our attorneys are alike. So I think the network that you have created, you know, is very vital to your success. So, Ryan, I want to ask you because I've spent my entire career here in New York City, which is, it's a huge market. Even with, we've had our share of challenges, but again, still a lot of opportunity. But for me to track the Market. I don't want to say it's easy, but I have an understanding of the playing field when you go into these new markets. And at this point your portfolio is all across the country. So you go into a market in, you know, wherever it is, Oklahoma or.

It'S West Coast, Scottsdale, you know. Yes, Houston.

So how to first of all understand the landscape, Right, because here you are an outsider, right? If you're new to that market, how do you figure out that market? Okay. And then how do you actually get the inside edge and the advantage? Because I would think that the local players are always going to hear about the deals first. They're going to have their local team. So you not only have to get in and understand the market, you have to convince people and tell them why they should consider you as a buyer as opposed to their, you know, their best friend or their client that they've done dozens of deals with. And then you also have to assemble a team. So maybe tell us how you tackle that.

So, so I think the brokers are really important and we always talk about like on market versus off market deals. We buy a lot of on market deals because there's actually a broker involved. I think brokers had a lot of value. And I think that's one thing that's overlooked in this marketplace. Like the relationships and the people. You just mentioned it. Yeah, it's the people you know. So what I'll do is like, I'm going to Scottsdale, Arizona. I'm gonna go buy a deal from Goldman Sachs. We just closed on an office building out there six months ago. I literally called Robert Given, who is down in South Florida, and he made the introduction to, you know, Barry and his whole team. And so it's literally if I know you and you know somebody in that new market, I literally want this warm introduction because I, I do do cold calls and I do do cold, like, like, like intros. So. But it's really a relationship building thing. Early on, when we first started Cardinal Capital, it was a lot more difficult because not as many people knew who we were. Now when we call out and reach out, you know, it's like an email chain. And I also use my debt guys too. So like, I've done a lot of deals with Trevor and Troy from cbre. I've done a lot of deals with Cush Wake. I've done a lot of deals with like, you go down the whole list. And I keep brokers, whether it's on the debt and also on the deal side, I keep them all involved with the deal because they all know those people in the marketplaces. So I always go to my power base first and then really we partner with a group called rpm. They have a even wider net because right now my key markets in, you know, Cardone Capital, it's, it's, it's Florida, we have Georgia, we have Texas, we now are starting to move into Arizona. But we really focus on economies of scale. And so we don't go and just go and buy anywhere and everywhere. We're like, okay, let's get hyper focused. Because I used to think that it was like a thousand units or 2,000 units. You see, started getting economies of scale. Same thing in flying 10,000 units, 10,000 hours. You really don't start getting good until you start hitting that, that, that critical mass. And so we partner with them. They have 120,000 units. So we take our 12 and 15,000 units and bunch them with theirs. And so we're literally able to grow and scale with other groups and other partners. I think partnerships are way overlooked too. I think partnerships, by the way, people are like, oh, I want to do this myself, I want to do great. But it's going to be small. Whatever you do, if you don't have partners, it's going to be small.

Yeah. I'm smiling because you're speaking to every piece of the book here and I.

Haven'T even read it yet.

Yes. So you'll see that we're literally on the same page. But I was smiling before. Not just because I'm a broker and you're talking about you to rely on the brokers, but I have a section in this book here about how to create really form relationships with brokers. Because, and if you. I've got my friend Bo Barry who dominates down in Gainesville, Florida. If you haven't connected with him, I'll make sure and connect you guys because he, he wrote a book on multifamily investors who dominate and in his market, he said that 93% of the deals are brokered. Now that doesn't mean that they're all on market because as you well know, an off market deal can also come from a broker. So only occasionally do you have owners who are actually reaching out directly, investors who are directly reaching out to sellers. So the point is, if a broker is typically going to be involved in the transaction and they're going to have that opportunity teed up, don't you think you'd want to cultivate that relationship? Because it still amazes me that 25 years in. I still do. Like, 90% of my phone calls are outgoing, where I'm actually reaching out. Hey, do you want to buy this property? Right? And you say, well, James, you're a broker. That's your job. But let me tell you, those 10% of buyers who actually call me every other week and say, hey, James, what do you got? What do you have in the pipeline? Or, let me stop by your office, let me get you a cup of coffee. Let's. Inevitably, that buyer who is really forming that relationship, and they're, you know, they're looking for more than just what's on, you know, on market that everybody can see. So it's really critical. So I think it's amazing that we're, you know, we're, we're, we're have so much of the same experience.

So it's a people. Everything's about the people, the relationships. Like, because you're not going to give me a deal if, you know, I can't close on the deal.

That's right. That's right.

And that's, that's, that's the short. Like, like you, if you don't know who I am, you don't know where my equity's coming from. You don't know who the decision maker is. Do I have a board? Do I not have a board? Like, you don't get paid until we close on that deal.

That's right. And for the broker also, if they have secured that exclusive and they are taking a risk on a new buyer and it doesn't happen.

Right.

That can be bad for them as well.

So clearly by now that could be the good old false start. And then it never looks good with egg on your face. You go back to the seller and say, oh, and by the way, I got to go back to the number two guy.

So I, I'm pretty sure, and I've heard Grant say before that you just, you don't retrade and that, hey, this is our handshake, this is our number, and this is the deal. And so, you know, look, that, that definitely speaks volumes and it certainly leads to more deals. So, Ryan, I want to now talk about this, this incredible network that you all have created and kind of maybe first to tell a little bit of the Cardone story as far as. Because my understanding was he was a business coach before he was a real estate investor. He built up this incredible program, network coaching, and then suddenly has these, you know, massive fans who are showing up. And then he said, okay, I got this real estate thing going. Why Don't I parlay this? And. And so hopefully I did justice and explaining on how this came to be. But he. Grant kind of came into this with a network and then kind of pivoted into the real estate. Is that kind of fair on how this all got started?

Yeah. Yeah. So look, Grant. Grant Cardone is a absolute grinder, and he has built tremendous companies and businesses throughout his. His, his career and his. He's 65 years old, so a lot of people are like, oh, well, Grant just, you know, went on YouTube and social media one day and he had 16 million followers just appear.

Overnight success.

Overnight success. I've literally watched Grant because when I was flying and we were doing deals, I literally watched him go from podcast to speaking to podcast to speaking to podcast, to speaking like he is. He outworks everybody in our shop. The really cool thing about what we have is that Grant has this company over here called 10X and it's for all the events, whether it's the 10X Growth Con or whether it's the 10X Boot Camps and all this money that it takes to promote that brand. The face of it is Grant Cardone. And so I'm saying all this because I think a lot of people are catching on and doing the same thing. Like when you start a real estate company or when you start another business where you have to spend marketing dollars, it takes a lot of money to promote and push. Over here on the training side, there's actually money to be made because people want to learn. Like we have a real estate club. People want to learn about real estate. So if we can go and monetize this side and he's still able to push marketing dollars, I think our first year at Cardone Capital, we probably spent it was, you know, 20 grand or 25 grand. The year one, we probably didn't spend anything. But as we started gearing up, we spent very low budgets because, as you know, when you do your first fund, it's not like a get rich quick. Like you do your first fund, you buy your first deal. That's great. You buy, you got your acquisition fee and you're getting your little promote, but you're literally trying to hire new executives and building out a team so that way the properties are managed the correct way. And so now we're on Fund 22. And now Cardone Capital is really starting to pick up a lot more steam. Like, it's already, you know, like. Like we've built a great company, but I honestly feel like we're just getting started. Yeah, and so they really complement each other. We have Cardone Ventures and we have all these, you know, 10x health. And so now that, now the octopus, the tentacles are actually starting to sprawl out even more. And all of these companies interchangeably feed each other because when you, if you're a business owner and you have make money, you want to invest in real estate. If you're a real. If you want to invest in real estate and you're a business owner, then you want to get better at your business. And if you, if, if you make a lot of money, most of us, you know, we, we grind our whole lives to make a bunch of money. And then we look up, we're 50, 60 years old, and we're like, oh, my health sucks. And so now I want to go do this else. So, like, if you've noticed, Grant and what we're doing, they actually all run parallel because, you know, our, our ideal client over here is actually our ideal client over here, and the ideal client over here is actually the ideal client for over here. And so they all really were great, you know, with.

I have no doubt that Grant is putting in the most hours. Although when I've heard him speak, he says, this not work for me. Like, this is what I love doing. And I could just. And I'm definitely looking forward to meeting him one day. You know, I've got to believe. And, you know, for those listening. And one of the number one things that I think hold people back from investing is that fear, that lack of capital where, you know, James Ryan, this sounds great. You know, I love real estate. I understand it. I don't have the capital. I don't have millions of dollars saved up. How do I get into this now? On one hand, you could say, well, you know, Cardone had a head start because you had this investor base that you had been cultivating. So where I'm going with this is, you know, you kind of created this loyal base of investors, right? And so, and I can't imagine he just, you know, that just appeared, emerged out of nowhere. I mean, it took time to, to get that credibility. And then when you had that first fund and when you launched, says, yeah, I want to become a part of this. So what would you say to, you know, the young aspiring or younger, the new aspiring investor who doesn't have that investor base, who is looking to go and build a brand? Is it. I guess the question is, what comes first? Is it building the brand? And this is who I am. So you can attract those followers or does it start with the deal and you go try to find them.

Everything always starts with the deal, the brand. And I tell this to everybody. So, like, the most important thing in real estate is the deal, because if you have a really good deal, you're going to find investors. There's people who don't want to do the training, they don't want to do the social media, they don't want to do the person who's always out there. Right. You actually don't have to do that in real estate because you can start with your power base. So again, you go and find a really good deal that has some good cash flow. You know, it's got some good appreciation in the investor base that you're going to go to, which is your power base. You always have to go to your power base. People want to see. I personally believe Cardone Capital is really successful because we actually had a platform before we started Cardone capital. We had 3,000 units that were already working that were already cash flowing that Grant had already invested in. So we literally would show people what we've already done. And then the first deal, our first deal was $20 million in Port St. Lucie. We bought it from a group called Waypoint. You probably know them. $20 million debt was 14. And this was like, I don't know, seven years ago. And I still know these numbers. Like, it's crazy.

This is helpful too, for the audience.

So our first deal was 192 units, was reserve at Port St. Lucie. 14 million in debt from Fannie. $6 million from equity raised from the investors. Right. We did the accredited fund, which is the 506C. The C is the crowdfunding. It's the Charlie. And we actually raised money from. We went on social media with Grant because he built up the audience. And all these people started calling me and they're like, hey, you know, I want to invest with Grant. I want to invest with Grant. And we raised $6 million in a little over a week.

From how many investors?

Do you remember that?

Or what the. What was the average ticket size?

The average ticket size at that time was probably 150. Now it's like 450, 400 grand. Okay, so it's big. From the accredited. Yeah.

Okay.

But this. Were. These were all accredited investors. So, you know, it was probably. It was probably under 200. It was a smaller fund, $6 million. But that was our first deal. And Grant looked at me, he's like, well, look, I've got another deal. You think we could do it again? And I said, absolutely, we could do it again. Because what I found was that the investors who were investing in the first fund, they knew Grant, the majority of them. Again, it was the power base. It was the people from the car dealerships, those people from the businesses, people he was already doing deals with. It wasn't all the social media just ringing me up saying, I trust Grant. And so once we did our first deal, we did the second deal, which was 40 million. So it was 2. It was 2x bigger. And we raised, you know, it was like 12, 13 million bucks. And we raised that in, you know, three weeks. And so once we started doing this and getting these investors, what I noticed was that Fund one actually wanted to do in fund two. And I. I remember one of our investors, his name is Jamie, he's invested in Fund one. He's invested in pretty much all the funds. His biggest regret, he called me, he's like, man, I just wish I would have invested more right sooner. Because he's like, I've got almost 5 million with you guys now, you know, but he's like, he's like, man, some of these earlier deals, because I always say this in real estate, deals do take time. You know, they don't just start out as, like, 10% cash on cash. I mean, you and me both know if a cap rates 5, they've moved to a 5. But if a cap rates a 5 and your debts a 5, then you're like, you know, you're at 4 to 5% cash on cash, year one. But as the rents go up, you know, you're the beautiful model about multifamily real estate is as the rents go up, you collect rents on the 1st, you pay out distribution on the 15th. And so as the rents go up, the actual cash flow goes up as well. And that's what we've seen on, you know, on our earlier funds, and we're starting to see it across the whole portfolio now.

So I hope you all really listen to what Ryan just said about how Cardone was able to originally cultivate that investor base, because I think sometimes there might be that perception that you just post a video on YouTube or you, you know, you post on social media, and then all of a sudden the dollars start flowing in, starts raining. Yeah, it came from those original relationships. And I find the same thing in my business, if I'm out posting, putting out good content, not just, you know, hey, James Nelson is great, you know, really putting good content out there. And then what that's doing is my existing relationships, you Know, it's all about staying top of mind. Right. So that person from the car dealership or wherever who keeps seeing your stuff when it, when you have an offering and then they start telling their friends.

Right, right.

And, you know, the power of that referral is so much stronger from, you know, someone. And not to say that investors, I'm sure, have come in who have never spoken to you all, they didn't see a post, they listened to a podcast like this and they said, hey, I'm sold. Let me get in. It happens. It's just I probably wouldn't bank your entire, you know, investment raise on that hope.

And I think that's where a lot of people get a little bit confused. You know, our biggest competitors, if we even have any competitors, are probably like fundrise or crowdstreet or there's a few others. Right? But what happens is we, we took pride in saying we want to build out an investor relations team where people can call. We don't even have. We, we have a landing page. So we, when people go to cardonecapital.com they can see the deal and they can see invest now and they can do all this stuff, but we actually have our phone number on the front page because as Grant and, and I'm a true believer in this as well. We, we, we took a lot of what Grant had already done in the past and said, people want to talk to other people, especially when they're investing. Right. And so we built out a team of 15 investor relations where literally we went, we started with 200 investors. We now have 13,000 investors. 90 plus percent have talking to a real life person inside of our office. And people like that, people want to know, hey, if I'm sending 50 grand or 100 grand or 200, we have guys doing millions of dollars. They want to talk to somebody. I still personally, and I hope people, you know, if they're in my position, in my role and Grant's role and you FaceTime people. You know, I still FaceTime people. If somebody calls in and says, hey, I want to do $5 million, I will FaceTime them. They will come into the office. I will like, like, we make sure that this personal touch is still there. Because social media is not the end all, be all. It's just a way for the intro. And then you have to build real relationships with these folks.

You know, it's so interesting, first of all, so true. But that approach is so counter to what a lot of people might be thinking about crowdfunding. And I don't want to speak negatively about other platforms but I know for a fact that some of these platforms say don't worry, we are the wall essentially where we will handle any inquiries that are all done by email. You can't call or talk to anybody. You're certainly not speaking to the sponsor. And you're right, I mean Even if it's 10,000, 50,000, I mean that's real money where someone wants to know that they are dealing with a human being as opposed to, you know, so look it's, I, I do believe that crowdfunding has done some incredible things to open up real estate investing to a lot more people. I mean certainly the Even think back 10 years ago this was a very quiet industry. Everything was quiet. Private placement. No one knew about these opportunities. So I think you know these blue sky laws that to open it up and let people know about have been good. But I think there's still no substitute for that old school, picking up the phone and having a conversation and talking someone through it.

Well and they work, they work parallel with each other, right. I think when we first started out we had the accredited fund which is, you know, means they make 200 grand or more or their net worth is over a million excluding their primary. And then you also have the new one which is the regulation A which is the, it's not new but it's newer. You know the reg D from accredited investors actually pretty straightforward. You know, you raise capital and you register with the sec. The reg A which is the non accredited, you actually have to get approval from the sec. And so it's a lot more time, it's a lot more money, it's a lot more energy and people now have the ability to invest five grand, ten grand, that's our minimum five grand. So we've done both. And where I was going with this is I think it's important for people to understand, you know, if you're going to do a regulation A fund which is for non accredited, I prefer running them both parallel. Meaning in order to do a bigger deal you can't raise money at 5 and 10 and 20,000 a slug. You have to have these guys. Especially on a 20 million, 50 million. Our average deal size is between 75 and $150 million now. And so in order to put 30, 40% down, you got to have the accredited and the non accredited in order to hit the timing. Right. I mean when you get a deal under contract you got 30 day. Look 30 day close. Maybe you have an extension, maybe not, but you can't raise money quick enough in my experience. And this is just me telling people like, hey, I would actually do both. I wouldn't just focus on non accredited, I wouldn't focus on accredited. If you were going to start anywhere, you'd focus on accredited and you'd go non accredited. Because you have to run these parallels. So that way the people have the same opportunity for the investment. It's just able to become a bigger, better investment because you have more money that you're able to raise. It's hard as hell raising money. 20 grand at a slug.

No, that, that makes a ton of sense and, but it's good to open that up because I'm sure that when you look at the, the universe of investors, there's obviously a lot more of them out there who can write smaller checks. But it's great that you have access to both those pools.

And it's where we all start too. Yes, yes, we all start. 95 of the population is non accredited. Why are we leaving them out of great investments?

Love that.

That's the question.

Yeah.

Because, because you don't do it just for fun like, you don't do it like you gotta, you have to have the offering circular, you have to submit, you have to get comments from the sec. You got to spend a bunch of money on attorneys. Like you don't just do it because it's fun, you do it because it serves a purpose. Where if you're sick and tired of your 401k or IR, you know, like the IRA accounts, like when I worked at United, number one, I was not accredited. Number two, the only option was a 401k. So the people who need it the most actually don't get access to these alternative investments.

So I'd love if they were listening right now for you to make the pitch on why real estate and not any real estate facts. I've heard Grant say don't buy a home because a lot of people think, okay, that's my first move is go buy a home, get that security.

Right.

But I know Grant's got very strong, you know, it's a liability on how to get rolling.

So.

Why would you tell someone to invest in real estate, say over the stock market?

Most people who invest in the stock market, whether it's through a 401k or a company program, don't even really know what they're investing in. If you're really good at the stock market and you're really good, like long term investor, just keep doing that. Right? Like I'm not You know, for me, I'm not here to say, hey, you're doing something wrong. Like if you're really good at doing something, invest in that. What I found, and for me personally, I want to know exactly what I'm investing in. And so I also, even taking it a step further, I want to see exactly what I'm investing in with real estate. What I found is that when there's an address attached to it, when I was growing up, I'm not the sharpest individual. But when I get something, I am really, really good. And so for real estate, it was simple. Okay, I want to know what I'm investing in, I want to drive out, I want to touch, I want to feel it. And then what are the benefits? Right? The benefits for me on real estate are number one, you do it because it's the deal. In 10 years, do we think it's going to be worth more? Right? But even before you get to the appreciation, what is the deal? Cash flowing? If I've got a million bucks, I'd much rather have five grand per month than the million in principal that I'm spending every single month on my bills, right? So literally that's been my investment thesis. And what I'm finding is that other people are gripping into buying the deal, getting the cash flow, waiting for the appreciation. If you go to bank of America though, and you say, hey, I want to invest in your stock, they're not going to give you leverage, right? Leverage is important in real estate because I can go and control a hundred million dollar deal for 25 million, 30 million, depending on how much you put down, and you're controlling a hundred million. So even if you kept that deal for 10 or 20 or 30 years, you're banking all of that pay down. You're banking all of that appreciation in that building to wait for the upside, the potential, right? And then last but not least, I have guys calling me. And for me personally, since I'm a real estate professional, depreciation when I get the K1 at the end of the year. So I've received cash flow from the deal. I received depreciation, which shows a negative number on my K1, especially year one with the bonus. I'm like, how is this even possible? How did the IRS make the code for this? So I take the cash flow, I don't pay tax on it, and I'm able to offset some of my other stuff with the depreciation. So for me, it's a combination of all the above. It's the cash flow Appreciation, the leverage, and then also the tax benefits. I mean, for me, it's a pretty common, clear path for net worth.

You got me sold.

I know, I know. And, and I got to get you reg. On, on, on. On the platform. I want you to invest with us. No, I'll. I'm in. I'm in. All joking aside, though, I, I really think, you know, a lot of people can understand real estate and, and not everybody understands. Okay, I'm going into a stock. Like, why trade? And this is Grant 101, right? Why were you trading paper for paper when I can take paper, get other paper, and then control a real asset?

You know, one of the reasons why I named this book the Insider's Edge to Real Estate Investing is inside Trading. You end up in jail in the stock market, Right? The stock market is designed where everybody has the exact same information, right? So if I have the same information to everybody else, and then I assume worse, I'm probably the last person to know, right? Because I'm just a retail investor. So with real estate, you really can gain the advantage by having the right opportunities, having the right team. So to me, it's, it's a no brainer. But, you know, look, I like what you also said, don't stop if you're doing well at it, but this is definitely something you need to think about. So, Ryan, with only a couple minutes left, I want to ask because so much of what your company is about is not just, you know, the financial potential of real estate investing, but, you know, really the mindset that goes with this. So can you talk a little bit about mindset? What have you learned from Grant? How do you approach the day? Whether it's, you know, a routine or how you go about things. But what have you learned from Grant? And, and how has that helped propel you in your daily life?

Well, so it's helped me tremendous. And, and there's a lot of key takeaways that I have taken from Grant because he is a doer. Like even one example on social media. You know, Grant doesn't ran around. He doesn't run around with a bunch of filters and a bunch of stops like, like the majority of us have, including myself, right? Like, oh, do I post this? Do I do this? Do I do this? I think mindset's really important. If, even if you go back to the investing what you're just talking about, mindset's really important because you have to pick something a lot of, lot of, A lot of times we all get confused on. Well, I Want to do this. I want to have a balanced portfolio. I want to do this. Like, the mindset really comes into play where you have to have the confidence where you're going to invest in something and you're going to hold it for a very long period of time. I was always under the impression, like, oh, I want to buy something, I want to fix it, I want to flip it. I don't, you know, like. Like, how long am I really going to hold it? With Grant, the mindset has always been, how do you buy something and create real wealth? I think for me, I always wanted to get rich. It wasn't necessarily that I had a wealth program. And I think the wealth program is you buy an asset and once you do due diligence, you're like, why do you sell this piece of real estate if you know it? The hardest thing in the world is when you sell something, you gotta go and find a better asset. And so if you keep it, you do your job, and in year 6, 7, 8, 9 or 10, you could actually do what's called the exit. No exit. And what that means is that you refinance in your 7, 8 or 9, and you keep the asset. If you pull money out, you pull money out. The IRS looks at that as debt, so you don't get taxed on that money. And eventually, if you own a bunch of real estate and you take all your money out, eventually you end up with the 8 flipped on its side, which is infinite returns. And so you get all the benefits. You don't sell it, you take your money, you reinvest it in another deal, you end up with an awesome portfolio, which the number one thing that people need when they retire is cash flow. So again, this isn't a pitch. This is my mindset. I always said, hey, I'm going to do a 401k, I'm going to do the stocks, I'm going to do the bonds, because I, one day I want to retire. My mindset has now shifted where I never want to retire. I don't work ever in my life. Like, I'm literally here having a great time with you. And I do deals, and I'm on my way over here talking deals, and, like, this is what really fuels me. But I know if I can get enough cash flow, which I already have a substantial amount of, I invest in all these deals with the investors. I think that's where the real breakthrough is. I think the real breakthrough is when you don't have to trade your time for money and you have these assets working for you, even if you're still working. Like you, I see you're. You're in here working in the office. Is it really work? You know, if you've invested in the right things, is it really work? And the answer is no. Because when you can walk away from this, that's actually when the mind shifts and you're like, this is what I actually enjoy doing.

That's it. So with one. If you were to say one piece of advice to someone listening who's looking to get into the business, what would that be?

You had mentioned it at the very beginning. For me, it's been important to have the right mentors in the business. And so instead of going out and starting it yourself and, you know, listening to these headlines saying entrepreneurship is the best thing, what happens is it's not really about entrepreneurship because most entrepreneurs are solopreneurs. I am an entrepreneur working next to one of the biggest, baddest entrepreneurs in the world. And I've actually found a lot of great value in that because I would be doing something a lot smaller, whereas now I'm doing something a lot bigger because I partnered with somebody who has a big think, but he also has more time in the game. So my recommendation is get around somebody who already has and is already doing what you want to do and added value to their team so that way, one day you can become a partner and it's much bigger than you. Like, this to me, is a lot bigger than I ever even imagined. But I honestly, truly look at you today and say, we are just getting started because it's hard to dream by yourself. Life is much more fun with other people. So you have to look at partnerships in a different way, in a different light, and you have to go out and get around the people who are already doing it.

It's such incredible advice and such a great perspective because so many of us think, okay, I have to do this on my own and it's me, and if I keep more for myself, you know, but quite the opposite, I found. I mean, here we have a team of three dozen people, and I can do infinitely more because I have an incredible team that complements, you know, where I don't have strength. So I, I think it's fabulous advice. Ryan, just for our audience, what is the best way to connect with you, to find. I mean, if you, if someone wanted to plug into Cardone, would it be your university? What. What you tell them to. To best consume all the. The content and the value that you all are putting out there, we have.

So much free content. I mean, YouTube, Grant, Cardone, Cardone University. I mean, a lot of the videos are on YouTube. My personal. Like, I'm on Instagram, I'm on YouTube. It's just Ryan Seco. So R Y a n T S e k o cardonecapital.com It's a, it's a. It's a website that's not built there to make people get confused. It actually has our number on there. So if they want to reach out, they could, you know, call me. If it's deals, if people have deals, they could just send me an email. It's simple. It's not. It's. It's ryan@cardonecapital.com like that, you guessed it. You know, again, we're very simple people. I give people my cell phone number all the time. Like, I want people to be able to open, to have an open door, not just in the office, but in society and in the world. Because I think that's truly how you do bigger and better deals.

That's amazing. And I'm laughing because we were just having this conversation before where, you know, sometimes people are so difficult to track down and get a hold of. Like, I mean, you could go, you can Google my name right now and you'll get my cell phone, right? And it out there. And I tell people, hey, you want to talk, text? I mean, yeah.

So they look at their teams. Like, how do people. How do people contact me? Like, how do people. Like, like, what can I give them? Like, I literally give people my cell number and my number's on Twitter. Like, it's just. It's just such an open world. So awesome.

It's been a ton of fun. Thank you so much for coming up and sharing. I mean, you guys put so much value out there. You've inspired so many people. So this was really a treat.

Yeah. You're awesome. Thank you, man.

Thanks again to everyone. Thank you as always for joining. If you have not done so already, definitely subscribe, add some comments. That's the way that we share what we're doing out here. We are here to give you the inside edge to real estate investing so you can outperform the market until next week. Thanks again for joining.

Thank you for listening to the Insider's edge to real estate investing. We appreciate your subscribers and sharing with your friends. If you haven't already, please connect with James AmesnelsonNYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show notes and other episodes, along with an exclusive video series and other helpful resources so you can gain the insider's edge to real estate investing. Until next week.