[00:00:02] Speaker A: This is Short Term Rental Management, the show that is all about short term rental property management with your host, yours truly, Luke Karl.
[00:00:16] Speaker B: All right, Short Term Rental Management, I love you.
Got a lot going on, kids are back in school, life is good. The seasons are a changing which we're gonna have a big party about that here pretty soon as well. So be on the lookout on my Instagram, my Facebook groups, etc, we will do a big fall party.
Not sure when this is coming out, may have already happened, but please be on the lookout at Luke Cash Flow Carl on Instagram.
[00:00:45] Speaker A: Today I want to talk about, Speaking
[00:00:47] Speaker B: of Instagram, Mr. Grant Cardone is talking a lot about his class action lawsuit on his social media.
[00:00:55] Speaker A: And I, I hate to bring this
[00:00:57] Speaker B: up, but I, I have to for a couple of reasons. I'm a big fan, I will say I was, I used to be a really big fan of Mr. Cardone and I still am.
[00:01:05] Speaker A: Although I will say, you know, I've
[00:01:06] Speaker B: kind of graduated right. Like I don't really need to be a fan anymore.
But you know, he does talk a lot about polit politics and stuff these days and that's not really my thing. I, I think to each his own. You do you. I'm gonna do me. I don't really want to hear what you're doing as far as that's concerned.
Anyway, Mr. Cardone is, I mean, like
[00:01:26] Speaker A: it or not, he's probably the biggest leader in our space of real estate.
[00:01:31] Speaker B: You know, we used to have Kiyosaki, his books were, you know, the Real Estate Gospel and he's fantastic, but he
[00:01:40] Speaker A: doesn't, he doesn't do it anymore.
And, and, and you know who, we don't really know how much he actually invested in real estate anyway.
[00:01:47] Speaker B: I think it was more of a publication type of a thing.
And now he's moved on to gold.
We don't really hear about it much anymore, at least not in our space.
Obviously rich, that poor dad is the greatest of all time. But other than that, you know, Kiyosaki's not really around in our space anymore. And then you have, you know, Brandon Turner and he's great too, doing his thing on his podcast, great leader.
But you know, Cardone is realistically, he's probably the biggest leader in the real estate space.
[00:02:20] Speaker A: And it does sadden me a little
[00:02:22] Speaker B: bit that this is going on.
[00:02:24] Speaker A: And I'm not going to get into details, to be honest with you. I don't know enough about it. It seems to me like there are
[00:02:29] Speaker B: people that have gotten in on this Class action lawsuit. They're saying they didn't make as much money as they wanted to. This, that and the other on his deal. So let's break that down just a little bit. Just so you. Just so you maybe you're not aware, he does syndicated apartment buildings, buys apartments with other people's money. He takes a cut of the deal to put his management company, theoretically, his management company, who knows who's actually doing the management, is in charge and they deal with the tenants and the toilets and the termites, as he would say.
[00:03:06] Speaker A: So some of the people that invested
[00:03:09] Speaker B: with him especially, I think it's specifically in like one or two different funds from the COVID era are not happy and they want their money back. And they got in on this class action lawsuit and he's posting about it constantly.
[00:03:21] Speaker A: And I, it makes me sad.
[00:03:23] Speaker B: I really, it really does.
[00:03:24] Speaker A: I get it.
[00:03:24] Speaker B: He's, he's a, he's a, he's got a large mouth.
He, he's maybe an acquired taste. He's maybe not for everybody. I'm a, I love him. Other than, you know, again, too much politics lately. But.
[00:03:37] Speaker A: And it's not the politics that he's talking about that I have a problem with. It's the fact that he's talking about
[00:03:42] Speaker B: politics that I have a problem with.
[00:03:43] Speaker A: It's not, it doesn't belong here.
You, you be a politician or you
[00:03:47] Speaker B: do what you're doing, it, it keep. It's like rock stars, you know how these rock stars, eventually they get big enough that they think that they need to tell everybody who they're voting for.
[00:03:56] Speaker A: And I just don't, I don't agree with that.
[00:03:58] Speaker B: And I've been in the rock and roll business for, you know, I mean, my whole life professionally, even for most of my adult life, my early adult life.
[00:04:06] Speaker A: And, and then you see these rock stars all the time start talking about politics and it's a turn off to me. I don't want that. I want, I don't want you to
[00:04:13] Speaker B: sing about sex, drugs, rock and roll. Let's stick to the mission here. And the same thing with, with Mr. Cardone a little bit.
[00:04:19] Speaker A: So, you know, past few years I
[00:04:21] Speaker B: haven't paid much attention, to be honest. But huge fan of his books.
[00:04:25] Speaker A: Life changing.
[00:04:27] Speaker B: His books have been life changing for me. I will say his book, I mean, all of them were great. I remember years ago I discovered him and I said, what order should I read these books in? And it was way before, you know, AI, etc. So I found an old tweet that he had made. And he said, if you're looking to read my books in a particular order, this is the order to do it in.
[00:04:47] Speaker A: And that's the order I did it in. And very fond memories.
[00:04:52] Speaker B: I remember exactly where I was.
[00:04:55] Speaker A: Matter of fact, I wrote most of
[00:04:56] Speaker B: them, you know, back to back. And I was in the same place in the little town we lived in in Tennessee and I was running. I always listen to books when I'm running.
Anyway, not that you care about any of that, but my point is, is that his books did change my life. You know, he's got this book you can.
He's got book called Be Obsessed or Be Average.
[00:05:23] Speaker A: And I will tell you that that
[00:05:25] Speaker B: book really did change my life in a good way.
And I'm sorry about all the clutter in my office. I'm getting ready to move to a new office here very soon. So if you're on YouTube, sorry about that. Looks terrible.
But somewhere underneath all that pile of junk, I've got my dog Chainsaw.
He's going to be 14 in a couple of weeks, bless his heart.
Still, still doing just fine.
Anyway, yes, my dog's name is Chainsaw.
[00:05:56] Speaker A: This program has been brought to you by the Short Term Shop.
The Short Term Shop is the premier residential vacation home agency.
[00:06:06] Speaker B: We have a large following and we
[00:06:07] Speaker A: work hard to ensure our clients happiness.
[00:06:12] Speaker B: If this sounds like a good fit
[00:06:13] Speaker A: for you, we are hiring real estate agents.
We are currently hiring in Outer Banks, Shenandoah, Virginia, Galveston, Crystal Beach, Texas and the East Tennessee Smoky Mountains.
Email us.
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be obsessed or be Average.
[00:06:43] Speaker B: Let's get back to that.
[00:06:44] Speaker A: This book
[00:06:47] Speaker B: was absolutely pivotal in my life because until I read this book I didn't re.
[00:06:54] Speaker A: You know, I just thought there was
[00:06:55] Speaker B: something wrong with me because I was constantly obsessed.
[00:06:59] Speaker A: Now I've gotten older and more mature
[00:07:01] Speaker B: and found things I was looking for that I didn't know I was looking for etc in life. So, you know, I've mellowed out a little bit in some regards. But I am definitely an obsessor.
[00:07:15] Speaker A: And until I read that book, I
[00:07:17] Speaker B: didn't realize that it was a good thing. I thought that there was maybe something wrong with me. People couldn't understand me, people couldn't keep up with me and I had a hard time communicating with people because I was obsessing and didn't even realize I was obsessing and it was affecting my relationships and things like that. And that book really opened my eyes
[00:07:40] Speaker A: to the fact that it's not bad. We just need to understand what we're doing, understand what, you know, what this means in my life, and that it can be used for good.
So thank you, Mr. Cardone, for, for making me, I'd be honest with you, like, into a better person with that book. And all of his books I loved. Obviously 10x is the big one.
[00:08:03] Speaker B: He still pushes that book today, but
[00:08:07] Speaker A: I mean, all of them are, are
[00:08:08] Speaker B: really, he's just extremely motivating
[00:08:13] Speaker A: if you
[00:08:13] Speaker B: like him and I understand if you don't. Totally understand if you don't.
He's not for everybody.
[00:08:21] Speaker A: But anyway, he's got this class action lawsuit and it does bring me some sadness to think that people are preying on him. Again, I don't know the details, maybe
[00:08:30] Speaker B: he did do something wrong, but I
[00:08:32] Speaker A: just, I hate it. I hate that the biggest leader, in
[00:08:38] Speaker B: my opinion, in our space is, is now being looked at in a bad situation, bad light here, you know, so that's kind of how I feel about it. And I completely understand that he, what he does is go out there and tout his money, talks about his money, showing off his money.
And when you do such a thing,
[00:09:01] Speaker A: there are probably some people out there that are going to be interested in
[00:09:05] Speaker B: taking it from you.
[00:09:07] Speaker A: This is the ric Flair effect.
Mr. Ric Flair made a living off of telling people how much money he had, how much he actually had. I mean, the guy was a professional
[00:09:16] Speaker B: wrestler that worked for some other organization. You know, he was, most of his money was coming from, from these, winning these wrestling matches and endorsements and such.
[00:09:25] Speaker A: And I'll be honest with you, I
[00:09:26] Speaker B: don't know that there was a tremendous amount of money involved there. I think there was a lot of money in that business back in the day. Maybe again, maybe similar to being on par with the rock star and the record labels, making all the money, you know, that kind of a thing.
But it's the ric Flair effect.
[00:09:41] Speaker A: Mr. Ric Flair.
[00:09:41] Speaker B: I'm a huge fan of him as well. I follow him still today. He's still on Instagram posting hilarious reels. I'm a, I just love that. I love the let's be, let's be a pompous jerk and show off attitude
[00:09:55] Speaker A: that if it's done correctly, I just
[00:09:57] Speaker B: find it extremely humorous. I do, and I love it.
And Ric Flair is the greatest of all time at that. And if you're familiar with him, you're screaming at your, your headphones right now saying, oh, yeah, Dude, I love it. Ric Flair rules. And if not familiar with it, it's absolutely ridiculous. And you probably have no idea what I'm talking about.
And it is. It's ridiculous either way. It is.
[00:10:21] Speaker A: But Grant Cardone does this.
[00:10:23] Speaker B: Does the Ric Flair thing. You know, let me show off my $200,000 watch. I own four jets.
This, that, and the other.
And who knows how much of it is even real?
You know, I mean, what are you going to go. You're going to go verify. You're going to go search the. The.
I don't know, the state that he lives in to make sure that those jets are actually registered or however you would even check such a thing? I. I don't think so.
[00:10:52] Speaker A: Why would a person. He. I saw it recently.
[00:10:54] Speaker B: He said something about four. Because they were in the court case. They were harassing him about his jet. And she said he. She said something about his jet, and he goes, no, no, I have four jets.
[00:11:06] Speaker A: Why. Why would we even need four jets?
[00:11:11] Speaker B: Just. We're collecting them. I mean, we just. Like this. Like, it's like an antique car. We've got to have a Mustang and
[00:11:18] Speaker A: a Corvette and a Barracuda.
[00:11:22] Speaker B: I don't see that happening. I don't. I don't see why anybody would need four jets. But it is hilarious when he says such things. You know what I mean?
[00:11:30] Speaker A: So now my point is, is that
[00:11:32] Speaker B: when these types of things happen, the Ric Flair effect, I could see why there would be people out there that are going to prey on this and say, oh, this guy's gonna show off his money. I'm gonna take it from him.
[00:11:44] Speaker A: And maybe that's what's going on here. I don't know.
[00:11:49] Speaker B: I don't know. Maybe they looked at his social media and said, this guy's gonna be easy to sue.
I don't know. But it makes me sad. And here's what I want to hit.
Let me get.
[00:11:58] Speaker A: Let me get to.
[00:11:58] Speaker B: If I have an actual point today,
[00:12:02] Speaker A: my actual point is that in real estate, you have no idea what it's going to make. And, and if he made promises, that's his fault.
[00:12:10] Speaker B: He probably shouldn't be doing that. Just give a ballpark or something like that. I don't know. You know, with. With.
[00:12:15] Speaker A: With apartment apartments, it is a lot
[00:12:17] Speaker B: easier to nail down what's going on financially than it is with an overnight rental.
[00:12:25] Speaker A: But still, there are no guarantees. You have no idea when the meteor is going to hit the roof of that apartment building. You have no idea when the tree is going to fall. You have no idea if and when the termites are going to eat half of the building.
And these things do happen. You have no idea when the fire, because the fires, I've had fires, had to rebuild the whole building. Terrible.
And I think in this case, more importantly, more, more pressing is you have no idea when there's going to be a global pandemic that will shoot real estate popularity through the roof and millions of people want to get involved and then all of a sudden the interest rates are way higher and now the asset is lucky to break even. That is going on in every city in America.
[00:13:23] Speaker B: Right now. I'm doing refis on apartment buildings and
[00:13:26] Speaker A: if you haven't been conservative with your money, you're gonna get hit with now these, I mean you could have been paying off, You could have been paying off your mortgage for the past five years on a five year note. The note is now due and now your new mortgage after paying off five years, a 20 year RAM and not do taking cash out or refiing in any way, just resetting the loan exactly where it is right now. And your payment goes up owing five years of payments less than you did
[00:13:59] Speaker B: when you bought it, if you bought it five years ago.
[00:14:01] Speaker A: And that is happening to everybody, tapping into me
[00:14:06] Speaker B: and we're having to take a deep look, figure out how to make this work. Luckily I have in most cases, some I'm doing okay. I do have one building that's stressing me out as far as like, you know, it's not with the new interest
[00:14:19] Speaker A: rate, it's, it's not going to be making any money.
[00:14:23] Speaker B: So I have to raise rents and hope that people stay. And the good news is the rents are too low on that building and it's my fault for not paying enough attention.
[00:14:31] Speaker A: I'm busy, I'm busy.
[00:14:33] Speaker B: But now we're going to have a
[00:14:34] Speaker A: meeting with the management and sit down and say, okay, we're gonna have to
[00:14:37] Speaker B: increase these rents this much and we've got plenty of wiggle room there. Because then the brand new units, and
[00:14:41] Speaker A: that's another problem, brand new apartment units are in every town. People built like crazy.
[00:14:47] Speaker B: They're still building, which is stupid because
[00:14:49] Speaker A: the economy is not what it was.
[00:14:50] Speaker B: But builders are always two or three years behind, you know.
[00:14:54] Speaker A: But anyway, I, I've got in that same town, it's a little tiny town
[00:14:58] Speaker B: outside of a major metro and I got a brand new 95 unit or whatever 90 unit apartment building right down the street. And they're beautiful, beautiful two Bed, two bath, the fireplace. Gorgeous facility.
My place is from the 70s and it's, you know, it's been remodeled.
[00:15:17] Speaker A: It's very nice, but it's nothing fancy,
[00:15:19] Speaker B: it's nothing to write home about. It's a great place to raise your kids if you need to, you know. But.
Now, luckily, the new buildings charging 1400 bucks and a lot of my rents are in the 800 range, 900 range, so I've got plenty of wiggle room there.
[00:15:36] Speaker A: Hell, I had a couple of them in the 600s.
[00:15:38] Speaker B: So I, I do apologize here, but the rents are gonna have to go up, you know.
[00:15:43] Speaker A: So anyway, I feel, I'm sure he's feeling the same pinch, you know.
And again, he's operating. I'm nowhere near.
[00:15:50] Speaker B: This gentleman is operating at a massive scale. I'm talking compared to me, I am an absolute.
It's absolute kid stuff.
It's beyond kid stuff, what I've got going on, you know, I'm the smallest of small baked potatoes compared to Mr. Cardone, at least compared to what he says he is.
Which again, do we really need? Four jets, you know, who knows what's going on there?
Steak half, by the way, I drink decaf.
Very rare for me to have sometimes. Occasionally I'll have a two thirds decaf. Not that you care, but people do caffeinate too much. They do. Everywhere you go, everybody's sucking on these caffeine, these drinks, these Alanis, etc, It's not healthy, it's not good for you. Be careful with that. Anyway, So who knows what's actually going on? And I do feel bad for him. I understand, Covid.
[00:16:54] Speaker A: Every time, every city block had somebody
[00:16:57] Speaker B: syndicating apartments in 2020, 2021, you know what I mean? It was just everywhere.
Everybody you talk to, remember the bigger pockets days. Everybody you talked to was raising money, had a fund, ba ba ba.
[00:17:16] Speaker A: And he was the biggest in that space. The guy is, I mean, I'm gonna,
[00:17:19] Speaker B: I'm gonna give him this for real.
[00:17:20] Speaker A: To me, he is likely the greatest
[00:17:24] Speaker B: salesman of all time.
The guy is a hell of a salesman.
[00:17:29] Speaker A: Now, Zig Ziglar, obviously somebody like that that's not as abrasive as Mr. Cardone,
[00:17:34] Speaker B: I think, is going to appeal more to the masses. So maybe he, you know, Zig Ziglar or somebody like that is going to be a better salesman. Maybe.
Totally understand that, because Cardone is not.
[00:17:46] Speaker A: Again, he's an acquired taste.
[00:17:47] Speaker B: You know, you got to be a Ric Flair fan to be into it, and I very much am.
[00:17:53] Speaker A: So anyway, I just. I want to hit home that.
First of all, let me tell you this. The short term shop. Luke, Carl, Avery, Carl. We will never tell you how much a house will make.
We never have, never will. And I'm making that statement right now.
[00:18:09] Speaker B: And I make it all the time
[00:18:12] Speaker A: because people constantly want us to do that.
[00:18:15] Speaker B: You know, how much is he going
[00:18:16] Speaker A: to make that does. That's not real. There are places you can pay thousands and thousands of dollars to tell you that. And I'm not even saying you shouldn't contact them.
[00:18:26] Speaker B: Some of them have decent reputations.
[00:18:27] Speaker A: It's not something I'm going to do,
[00:18:33] Speaker B: Especially in this world, the short term. And of course, this is a podcast called Short Term Rental Management. So let me talk about it.
[00:18:44] Speaker A: There is no way to know how
[00:18:46] Speaker B: much that house is going to make before you buy it.
[00:18:49] Speaker A: It's not possible.
[00:18:51] Speaker B: So do not look to me or my wife or anybody at my company
[00:18:54] Speaker A: to tell you that. We're not going to tell you that.
Plenty data companies out there will do
[00:19:00] Speaker B: their best to tell you that.
[00:19:01] Speaker A: Lean on them.
[00:19:03] Speaker B: You know, air DNA, obviously the biggest one. There's tons of them out there. It's ridiculous at this point how many there are.
[00:19:09] Speaker A: But you have no way of knowing
[00:19:14] Speaker B: exactly how much that thing's going to make after. Until you've owned it for a year.
[00:19:17] Speaker A: After you've owned it for a year and your tax return is done.
[00:19:20] Speaker B: Now you know what it made.
And again, preaching to the choir here. 90% of it is you.
How hard are you going to work? How hard? How much rear ends are you going to kiss? How many rear ends?
So I don't know.
[00:19:43] Speaker A: To me, it's like
[00:19:46] Speaker B: you literally just looked at a sheet of paper, gave this guy a hundred thousand dollars, and didn't get exactly what was on that sheet of paper. So now you're suing him. Is that. Is that what's going on here? I don't know, but if it is, it seems a little unfair to me. Like maybe you should done more research or something.
[00:20:05] Speaker A: I don't know. I don't know the details of this, guys, but I don't like it.
[00:20:10] Speaker B: And I hope he comes out the other end smelling like roses.
[00:20:13] Speaker A: I do. Because we need a leader around here.
[00:20:18] Speaker B: All right, I said too much.
[00:20:21] Speaker A: You do not know how much a
[00:20:23] Speaker B: piece of real estate is actually going to make until you've owned it for a period of time.
So you just do your best, work
[00:20:31] Speaker A: hard, sit there with a pen and a paper. That's how I do it. The old fashioned way and scribble out notes and figure it out.
I do like aerobatics, I like price labs, etc.
[00:20:43] Speaker B: For short terms, of course.
[00:20:46] Speaker A: For apartments, you know what the rents are.
[00:20:47] Speaker B: In apartments that's a little, a little
[00:20:49] Speaker A: more cut and dry. You look at the rents, you look at the expenses, you figure it out. And if the rents are too low and the expenses are too high, then you stop paying somebody or cut off something and raise the rents.
[00:21:00] Speaker B: Pretty simple stuff.
[00:21:03] Speaker A: Anyway, I felt like it needed to be talked about. The short term shop will never tell
[00:21:08] Speaker B: you exactly how much a house is going to make.
[00:21:10] Speaker A: That it's not possible
[00:21:15] Speaker B: and it's a huge liability that I don't want.
[00:21:18] Speaker A: Sorry, but it's not possible.
[00:21:21] Speaker B: You will not know exactly how much it's going to make.
You can make a somewhat of an educated guess, but until you own it for 20 for 12 months, you have no idea.
[00:21:33] Speaker A: All right, tell me I'm wrong.
Somebody out there is going to say I'm wrong.
[00:21:38] Speaker B: I could tell you exactly how much this thing is going to make.
Ask them how many properties they own. Probably don't know more than one, two, you know.
[00:21:48] Speaker A: Anyway, makes me sad. I hope Uncle G comes out the other side of this thing. And in the meantime, it's some seriously
[00:21:54] Speaker B: funny stuff going on on his Instagram. So I'm, I'm back following him on Instagram again because it was getting too political for me and now it's fun again. So he's a funny guy if. If nothing else. So anyway, do your research.
[00:22:09] Speaker A: Don't.
Don't let anybody tell you how much the damn property is going to make.
[00:22:15] Speaker B: Do your own homework. I love you. Don't overthink it.
