Grant Cardone's Solution to the Bank Crisis...

Tell me about what your opinion is on the dollar and why you like hard assets.

I don't think the dollar goes away. The banks are in trouble. Community banks are going to have a lot of trouble lending people money here going forward.

What do I invest in?

I don't want to lose my money. So I think every investor like you would agree they got to come up with what, what fits your investment stuff. When you take your money and you put it in a bank, you are losing money.

All right, welcome everybody to another episode of the Main street business podcast here with the infamous Grant Cardone. Love what he's doing to shake up the financial industry and help owners around the country. I was recently at his 10X event in Vegas. It was phenomenal. His interviews were just life changing. I could, we could talk about that all day long. But appreciate Grant being here now. For those that don't know, Grant, quick introduction. Thanks, Grant, for your patience. Grant, first and foremost, he's real estate investor. He managed a multi unit billion dollars. Now 4 billion. I think it is Grant.

Right.

In assets, under management, 22 funds, looking for 23. Had over 13,000 investors in his funds. We're going to talk about that because that's not common. He's going after the, the, the main street owner. That's what I do. Right. So for those of you that don't know Grant, I really want you to listen in because not only is he out there changing lives, he's got a wealth of knowledge regarding real estate. You need to hear about it with all this bank crap and the dollar. So this, this is going to be good. Grant, thanks for being here.

Hey, thank you so much for having me. I really appreciate it and value your audience and their time and I love that setting that you're in. Scottsdale, one of the great future markets in America. There's going to be a lot of pain over there for a second. Yeah. In Arizona, both in the single family, but especially commercial real estate and even the large 300, 400 unit residential properties. But it's going to create phenomenal opportunities.

Yeah. Phoenix has been up and down on the bubble like California over the years and it's, it's riding high. There's an adjustment coming. I feel you. But everybody, you got to see this right over my shoulder. I want, you know, many of you are used to me in the studio. I got my little mobile studio dad. I said I got to be up on top of Optima, one of the cool apartment buildings here in North Scottsdale. And this is Grant's Building right here, number 22. Let's start there for a minute. Maybe just before we get into kind of the bigger financial concepts. Can you tell us about how you find one of these deals like Promenade?

And there's about six markets that we shop in every day that we want to be invested in. And because I get to travel and work with business owners and do events around the country, anytime we're in town, we also set up meetings to look at real estate. And we were out looking at apartments over there in Kierland, where you are right now. And we were looking at buying apartment complexes. And I heard about the Optima shopping center had just been sold.

100.

It was 100 and $258 million. An individual bought it from a institution. And I said, so he bought all this? They said, no, no, they didn't buy this. This is a big office complex right here. But Goldman owns that and they're going to be selling it. That was 23 months ago that I saw it for the first time. We made a run at it. We didn't get it. Somebody else got it, was awarding the deal for 77 million and then fell out of contract. And about six months ago, maybe five months ago, we were in back in Scottsdale doing an event. I was doing a real estate event there. And we had just opened some offices and had already outgrown the offices. And I get a phone call on a Friday afternoon, hey, the Goldman buildings back for sale, you were interested. They're sellers. They have to get this. Their last deal and a fund they have to get rid of. We went over there. We're $21 million less than the last guy that offered on it. They paid 77 million for it. I think eight years ago, nine years ago, we paid almost a third less than that.

Wow.

And so that's how I found it. You know, we hunt deals, big deals. If I can't get it, I put it on a lost deal sheet. We don't use institutional money. We don't use Goldman, JP Morgan, kk, KKR sovereign funds. We don't use any of these big groups. What we do is I basically buy these deals with my money, as you know, Mark. And then I go to my audience that follows me online. Customers, employees, family, and people that follow me on Instagram and Facebook, tell them about our deal. People invest money with me. They get an opportunity to invest in an institutional quality asset like that one back there. The location. Everything we do is location driven. Never compromise on location. Institutional quality assets that we hold for long periods.

Of time. They're incredible deals. And I. Grant knows I've got personal family in this project. And for those of you that are followers in my ecosystem, we've got hundreds of clients at directed IRA with their IRAs and HSAs and 401ks in this. In this deal and others where our team works with Grant's team. And when any of you want to use your IRA to get into these larger funds, which I think are so powerful, it's just wonderful. Okay, bigger picture. For a minute, you and I are the same. We bleed the same. We fricking hate Wall Street. I'm all about mainstream street as you are.

Tell me.

And, and you've been interviewing some really influential smart people. And I'm just wondering if you could tell me about what your opinion is on the dollar and also the SPV closure Wall street, and why you like hard assets.

Yeah. So look, hard assets are about to suffer just to get this off. Everybody understands I'm obviously going to pitch my book and I'm biased towards real estate because I'm heavily invested there. I need it to be right just to. To be completely frank and honest with everybody. But it has been right for a thousand years. You go back. You go back as long as you want to go back through any cycle, including the Great Depression. When you come through these cycles, real estate explodes. So I am a contrarian buyer. I do. I hate the stock market. I hate the idea of trading paper for paper, including my retirement money. I have my 401ks, my IRAs that I have set up. I like that. But I have them reinforced with real estate. So currently, the dollar, I don't think we de$ize. That's not real to me. We represent 75% of all the trade on planet Earth. Almost all the black money on planet Earth, slave money, drug money and guns, is traded in dollars. Okay? There's countries out there that have a shortage of dollars. They want more of them. I don't know how you're going to get rid of it. We have the strongest military in the world. That's ultimately what backs the dollar, by the way, is a goddamn military like none other on the planet. So. But if I look at some things that are happening with the banking business, right, Banks are in trouble. I've been saying for years, I don't want to keep my money at a bank because the bank can't pay you anything. Community banks are going to have a lot of trouble lending people money here going forward, which means we're going to probably end up At a very, very, very long and ugly recession. If I look at treasury bills today, the three month is paying 5% right now I'm looking at it six month is paying 4.9. But when you get to a three year it drops to 3.6, a five year to 3.4 and a ten year drops even more. So if you look at the ten year man, the curve is going like this, the five years going like this like literally predict Covid. If you go back to your, your audience goes back and looks at September 2019 and you watch the, the 5 year and the 10 year treasury, they're falling off a cliff, almost like they knew Covid was coming. So those to me indicate something's coming. I'm not a three month investor. So a three month treasury bill, I don't even know what that means.

I agree, I agree.

I'm not interested. I'm not worried about my money for three months. I'm worried about my money for 10 years, 20 years and 30 years when I can't work anymore. I don't think the dollar goes away. Ok, we're a long way from that happening. Number two, the banks are in trouble. Community banks are in trouble. That's not good for you guys. Okay? That doesn't mean your deposits are in trouble. They'll, they'll bail out every depositor in this country, which means we will print money, which means interest rates are going to come down. That's what that three and that three year treasury right now shows me that we're going to end up at probably 1% treasury rates again. I know nobody believes this. I think the Fed probably raises the quarter this month but they won't want to and they're only doing it for optics. If they don't, they're going to be telegraphing to the world they were in more trouble than anybody knows.

Well, I echo your hard asset perspective. I mean that's what we're doing at Directed now. And this, this year we'll hit 2 billion in, in self directed funds, number one in the country in customer ratings. And, and again we see your name and your funds come across our table every week, hopefully every day. I know you're looking for that next deal. I wanted to hit just a couple more points. Thanks for being with us for a few minutes and so shifting and I, and I'm grateful you talked about the dollar and investing in hard assets. So many people are scared. They need to know what to invest. I get that question every day as you do. You know, what do I invest in hard assets.

You know, for me, this is what I do. I don't want to lose my money. So every, every. I think every investor like you would agree, and you know this better than I do, they got to come up with what, what fits your investment stuff. Okay, My style is this. I work my ass off. I don't want to lose the money. So what does that mean? Okay, if I, If I go, if I go make a million dollars in my business, or 100 grand, whatever the number is, I don't, particularly in the beginning, I don't want to lose what I just earned. Everybody's like, yeah, I don't want to lose my money either. Yeah, but you, when, when you take your money and you put it in a bank, you are losing money. Money's being depreciated, so that's a loss. Number two, you gave it to a bank. You lent your money to the bank. They don't even keep it. They lend it out. So number one, I want to protect my capital. How do I do that? First, I got to get it in something where you can't steal it from me. And that's a building. That's a hard asset. You cannot steal a hard asset. It's easier to steal Bitcoin out of a, out of a cold storage than it is to steal that building behind it. Just can't do it. It's impossible. Okay? It's too big deal. Okay, so number one, I don't want to lose my money, too. I need cash flow. I need a drip. And that's why I need even my retirement accounts. They should get a drip, right? The flowers need a little bit of. A little bit of moisture to grow. Third thing I want is tax write offs. And that's why I love the ira. Even for my hard assets, for real estate. I like it because it protects my, my, my, my retirement. When I go into retirement at 6, what is it, 65 or 63? What is it?

69?

Half. I mean, it's 69.

Well, sorry, 59 and a half on the RO IRAs. And that's when they open up and the Social Security number keeps changing. That's what throws me off. Yeah. Our IRAs are accessible at 59 and a half.

So let's say it's a Roth, okay? Yeah. I don't want a lump sum when I'm 59. I want cash flow when I'm 59. I don't know why Wall street, how they convinced all of us, or you'll have a lump sum when you're 50. I don't want to lump sum. I want cash flow. Yeah, I got dementia at 70. I don't need freaking money. I don't forget where I put it. What I need is income coming in to pay the bill for where I stay, right? So capital preservation, real estate, cash flow, real estate, tax advantages. There are no other vehicles on the planet that could take cash converted into real asset and avoid big tax benefits.

Yeah, yeah. You're speaking my language. And as you know in my books and when you and I met 10 years ago working with Entrepreneur magazine, I headed off in the tax legal direction. You're running with real estate. It's been a wonderful ride for bucks, both of us. And that tax issue is so huge. And so this was the second point. This is what people want to do, but they feel like sometimes there's barriers, like I don't have enough money. I can't get there. I love what you did with the reggae. Many people don't understand that Wall street works against a little guy. And you've been fighting against the SEC from day one, saying, I want little people to invest in a building like this. Can you explain that? Just your perspective on the Main street business owner, investor.

Yeah, well, I didn't. Look, I didn't know this. You and I talked about this before. I didn't know this. When we started raising money, we were raising money, put a fund together. It was approved by the. Took like 15 minutes, but. But it had a limitation. I could only raise money from people that make 200 grand a year. And I'm like, why? Why? Why is it 200 grand a year? Oh, because they're sophisticated. Yeah, I don't think so, bro. I remember when I made 200 grand.

I know a lot of dumb rich people. Yeah, I mean, like now.

Now I said, you're telling me if they make 197,000 a year, they can't invest with me, but if they make $3,000 more, suddenly they went to the genius meter. They did. Yeah. I said, but that's ridicul. Completely ridiculous. Well, Grant, they don't have to make 200 grand a year, but if they're worth a million dollars. That's the other thing. If they're worth a million dollars, they can invest with you. Okay, what if they're worth $989,000? No, they can't invest. I said, look, man, I know some people that they're worth nothing and they're super, super smart. I know people worth tens of millions of dollars that are idiots. So so when I started digging into this, I'm like, what are they trying to do by having these, these, these stops? Okay. Oh, they're trying to protect the little guy. I said, who is the sec? That's their job. So they're not, they're trying to protect Wall Street. So I started looking into it, Mark. I'm like, who created the sec? Who funded the sec?

It drives you crazy. It's, it's government feeding government. It's like the ex government guys are feeding the, the new government guys waiting at an office, waiting in the corner for them. When they get done, just pat on their wallets.

Jamie Dimon, bank of America. The four, the top four banks that are benefiting from all this. These community banks dying. By the way, I was on, I was on a one of the big four the other day. They had 12 million new accounts, what, $18 billion in new money in seven days.

Wow. Wow. So, yeah. So big banks are loving it.

Oh, they're loving this, dude. This is what happens. This is destruction that happens every 10 or 12 years. And we're going through the cycle we're about to see in commercial real estate and residential real estate. I'm not single family. I do not believe this affects single family. But in those other two sectors, big apartment complexes and office and hotels, retail, we are going to see devastation like we have never seen on this planet. And it is going to be unbelievable opportunity for those people out there that can push through the noise and see on the other side of this. We just need about 18 months to two years and you're going to see probably the greatest real estate cycle in the history of the world.

It's going to be amazing. I now let's finish on that. You've already spent so you're so much your valuable time here, but I, I want everybody. You got to check out cardonecapital.com look at some of the projects Grant's done in the past. He does a monthly call. I have family and friends that they're like Grant's calls tonight. There's like thousand people, thousand investors on there and they're just drilling Grant and he'll freaking stay. I don't know what you're doing till 2 in the morning, man. I'm, I'm an old guy. And you're. Well, I'm doing 10x.

How old are you? How old are you?

54.

Dude, I hope I look as good as you when I'm your age.

And dude, I did my 10x health blood work. I'm, I'm doing Peptides. I' doing it all man. So that's the whole thing. Yeah, that's a whole topic people, but we're taking care of ourselves. Grant looks great for his age by the way. I, you know, I'm not gonna tell his age but, but moving forward people, there, there's opportunities there in this big swap you want to be looking at as I've sold said all my clients every year, buy one rental a year, buy into real estate every year. Find something, God will bring it to you. Just open up that your heart and mind and it'll come and this today's call may be a wake up call for many of you listening or watching. So can you just tell what, what are you looking at? Where said number 23. Number 24. You don cities or whatever. What are we looking at?

We're again we're looking at institutional quality assets. Texas, Florida, Utah, Nevada, Colorado, but mostly in the southeast. Anything Florida. Tampa, Orlando, Miami, Destin, Panama City, the, the, the, the Astronaut coast. What's that called?

Oh, I know what you're saying.

Anyway. Cape canaveral, Cape Canaveral, St. Lucie, the Carolinas, Savannah, Atlanta. I expect we're going to buy 12 to 20,000 units in this cycle. In the next 18 months I'll double, maybe, maybe a little more than double my portfolio. And we're going to be buying from the biggest institutions in the world, Blackstones, Starwoods. These guys own hundreds of thousands of units. The money the deals are sitting on adjustable loans and those loans are coming due. We know the list, we know the owners, we know people should be looking for you guys. You guys want to go out and do it on your own. What you, what you're looking for is somebody that bought an asset two to three years ago and they have it on an adjustable loan and that loan is coming due and it needs to be recapitalized.

Grant, you know you remind me of. You freaking love this. Maybe, I don't know, you remind me of Chris Baio in the Big Short. Dude, you're that you're in there with your headphones on just looking at all the shiz no one else looks at.

Like, I mean, I know, I know the deal. I mean it's all public data. That's the thing about real estate. I would also tell everybody that's got your money in the stock market. I expect the stock market will roll over by almost 40% and that could happen this year. It's going to be devastating. The capitulation will be phenomenal. It will drag bitcoin with it. I own bitcoin, by the way. I like bitcoin. I like bitcoin better than gold, But I like. There's nothing I like better than a real business. Do you guys own a real business? You own a dentistry? Go buy 10 dentistries in this cycle. You don't try to just grow yours. Go buy 10 more. We do that right now of Phoenix. We. We help companies figure out how they can have 10 chiropractors rather than one or 10 H vac companies or 10 roofing companies. You're going to have a chance to buy companies for nothing. The second thing I would do is I would definitely be out in the stock market in this cycle. Invest in your business and get your money out of the market, away from the market. Invest in your business and anything left over. Invest in real hard assets that will benefit from long term appreciation and cash flow.

I love it. And I didn't close the loop earlier on this, folks. When I was saying reggae and then Grant talked about this accredited investor crap that Wall street protects. I forgot to close the loop. With the type of funds that Grant's created, a non accredited investor can get involved with very low money. Involved. 5,000 bucks, right?

5,000. I had a guy put 5 million in this week. He's like, how's my deal different than the guy that puts in 5,000? So there ain't no. There's no difference. Same asset.

I get emotional when you say it. I really do because I'm so passionate about the little guy. And I know that's one way you str. And it takes more work to people to do what Grant did. But when he holds these investor calls, they're calling kids on there that invested five grand and they feel like they're a part of something. And it's just so inspiring. Grant, I just love it.

Well, thanks, man. I'm trying to do something that had been done.

And.

And you know, I was on the phone like with one of these big banks. I said, how much money guys do I need to get you guys to call me? And they're like, well, you got enough? You're qualified? I said, yep. What's the number? What's the number for the next guy? Okay, 400 million. What you need 400 million? He's like, round. We got. We got almost 18, 12. 12 million accounts or something. We. We can't even. We can't even manage it. We're probably going to throw away 11, 11.9 million of them. We can't even. Or we can't even board.

They call it onboarding onboard and maintain them and all that.

Only thing we're looking at, this guy's worth 3 and $400 million. That's who our priority is right now.

Well, people here, we're going to wrap this up. That. That's my priority. As a little guy, I know that's yours, Grant. You've been a great example of that, and I'm so grateful you've been here with us. God bless you. Keep up the great work. And we got. You got to come down to Scottsdale more often. You know, folks, he's got a jet, he's legit. Grant's actually pilot. We could talk about so many cool things.

No, I'm not a pilot. I'm not a pilot. I pilot in the back.

Well, you got. You got right sea hours. You got some right seat hours, man.

Well, I could definitely sit up to there anytime I want, dude.

You're awesome. Well, Grant, thanks for being with us and we'll hopefully have you back again and working together, and we really appreciate you.

Thanks, Mark. Appreciate you.

Thank you.