Investing in Real Estate like Warren Buffett – Grant Cardone




Homes can’t scale. If you want to build BIG wealth, you need real estate that CAN scale. That’s why I only do deals with MULTIPLE doors. I show you more of this over at https://cardonecapital.com/

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Grant Cardone Career and Bio
TV Undercover Billionaire
CEO –  CardoneCapital.com Real Estate Holdings 2.2B AUM
Founder –  10X Movement Business Conferences Worldwide
Author –  The 10X Rule. (Plus eight more biz books)
Philanthropy Grant Cardone Foundation – Support kids without fathers.
Raised Over 100M for Charites Apple Podcasts‎The Cardone Zone on Apple Podcasts‎Careers · 2020 (420 kB)https://is4-ssl.mzstatic.com/image/thumb/Podcasts113/v4/05/a6/8e/05a68ef2-1385-5ce9-8e93-186f282aed1b/mza_716329887123094509.jpg/1200x630wp.png YouTubeGrant CardoneGrant Cardone is the author of eight business books, thirteen business programs, and is the CEO of seven privately held companies. Forbes calls him one of the top social media business influencers in the world. Cardone founded and manages a real estate investment firm, Cardone Capital, with $1Billion assets under management. He also travels the world consulting Fortune 500 companies, small business owners, startups and governments on business expansion. One of his enterprises recently hosted The 10X Growth Conference at Miami Marlins Park in Miami, Florida with over 34,000 business people and entrepreneurs in attendance from over fifty countries. Mr. Cardone resides in Miami with his wife, Elena Cardone and their two children, Sabrina and Scarlett. Visit https://grantcardone.com for his latest blogs, news, tips, training, and where to catch him LIVE!
The information provided is for convenience only. It is not investment advice or a recommendation, it does not constitute a solicitation to buy or sell securities, and it may not be relied upon in considering an investment in a Cardone fund. Past performance is no guarantee of future results. Any historical returns expected returns or probability projections may not reflect actual future performance. All securities involve risk and may result in partial or total loss. Investment in Cardone funds is available only to independently verified “accredited investors” through an offering made in accordance with Rule 506(c) under Regulation D of the Securities Act of 1933. Before investing in any Cardone fund, prospective investors should consider carefully the investment objective(s), risks, arches, and expenses. While the data we use from third parties is believed to be reliable, we cannot ensure the accuracy or completeness of the data provided. Cardone Capital does not provide legal or tax advice. Prospective investors should consult with a tax or legal adviser before making any investment decision.

7 thoughts on “Investing in Real Estate like Warren Buffett – Grant Cardone

  1. Warren Buffett accelerates the depreciation of PP&E for tax purposes. This creates a deferred tax liability on the balance sheet of Berkshire Hathaway, and it acts as a 0% loan against Berkshire Hathaways tax bill with no traditional loan covenants.

    Buffett takes the insurance premiums from GEICO and invests them. This is called insurance float investing. From 1976-2011, Buffets costs of insurance float was 2.2% per year, a rate that was lower than the average treasury rate over the period.

    Berkshire Hathaway issues convertible bonds and enjoyed an AAA credit rating from 1989 to 2009. In the early 2000s Berkshire Hathaway issued a negative coupon security, a senior note with a warrant attached.

    Buffett writes long term out of the money put options on several equity indices. These are called long term equity anticipation securities (LEAPS). With limited exceptions, these securities have no collateral posting requirements. Buffett writes out of the money put LEAPS with high implied volatility due to the term structure of volatility, the steep volatility skew, and the nature of the implied volatility surface.

    Buffett uses those 4 forms of leverage to invest.

    Buffett invests in low beta companies, and he takes advantage of the Ex-post anomaly that low beta securities slightly outperform their risk levels relative to what a capital asset pricing model would predict.

    Buffett invests in value companies, which are companies with low P/E, EV/EBITDA, and low P/B ratios.

    Buffett invests in robustly profitable companies, with high ROA and high ROE percentages.

    Buffett invests in conservative companies with a fair amount of cash on their balance sheets.

    Buffett invested in small companies early in his career, but he now manages such large sums that small companies don’t make a meaningful impact on Berkshire Hathaways balance sheet.

    Berkshire Hathaway invests in dozens of companies, and so the R^2 test statistic of Berkshire Hathaways portfolio is very high, somewhere between 0.97 and 0.999. This means that Buffetts track record is due to systematic risk more so than idiosyncratic risk.

    Buffett has built his extraordinary track record as an investor and professional capitalist within the context of an efficient market framework.

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