For most people, owning a home is the definition of financial security. Grant Cardone thinks that’s backwards. In this clip from his 2018 London Real interview, the real estate investor tells Brian Rose that nobody should buy a home, and explains why he thinks the “American Dream” was really a product designed for banks.
It’s four minutes long, deliberately provocative, and one of Cardone’s most-watched moments on the channel.
▶ Watch the full episode: Grant Cardone – The 10X Rule
A business that doesn’t need him
The clip starts with Cardone explaining why he got into real estate. He wanted a third business that didn’t depend on his personality or “genius”, one that could run by itself. His choice was apartments: not single flats in a tower, but entire apartment complexes of 50, 100, 300 or 500 units where people rent.
He’s clear about the model. He doesn’t want to sell units. “I want the renter,” he says. What he’s after is the cash flow.
Why property
Brian notes that Cardone only invests in things he can see. Cardone says he has always loved real estate, and that real property resonates with most people. The problem, he says, is that most people buy the wrong kind.
“Homes were built for banks”
Then comes the line the clip is named after. Most people shouldn’t buy a home, Brian suggests. Cardone goes further: “No one should buy a home.”
His argument is about lending. Banks make money by lending, he says, but they can’t lend money for nothing; they need a product in between. Lending to businesses is risky. So, as he tells it, in the 1950s the idea that everyone should own a home was promoted, branded as the American Dream and backed by politicians. In his telling, the people who made the most money from homes weren’t the builders or the owners, but the banks.
He applies the same logic to university. Everyone should have an education, the message went, and as cheap loans became available, he argues, tuition fees rose. “We’ve been sold a big old fat lie,” he says.
Learned the hard way
Brian points out that Cardone had a bad experience with his own first single-family home, and that it pushed him towards large rental properties. Cardone jokes that Brian has done more research on him than anyone. He adds that people usually react with disbelief, and that many will write to him asking him to explain it all again.
What to take from it
Cardone’s view is deliberately extreme, and owning a home can still make sense for many people, depending on where they live, their plans and their finances. But his underlying question is a useful one: is this purchase an asset that pays you, or a liability that someone else profits from? It’s worth asking before any big financial decision.
This clip reflects Grant Cardone’s opinions and is not financial or investment advice. Speak to a qualified adviser before making property decisions.
Who is Grant Cardone?
Grant Cardone is an American entrepreneur, real estate investor, sales trainer and author from Louisiana. He runs Cardone Capital, which invests in large apartment communities, and has written several books, including The 10X Rule and Sell or Be Sold.
In this full 2018 episode, he talks with Brian Rose about the 10X Rule, sales, real estate and building wealth. You can also watch his later interview: Grant Cardone – 10X Your Business And Life.
See everything Grant Cardone has done with London Real on his guest page: Grant Cardone on London Real.
More on London Real
Transcript
Transcript: Grant Cardone – “Don’t Ever Buy A Home”: His Case Against The American Dream
0:00 Grant Cardone: I needed a third business that wasn’t dependent on my genius, my personality, and this was the first business that could run by itself. It was real estate. It was apartments. Not what you have here in the UK; you don’t really have what I buy. These are large apartment complexes, 50 units, 100, 300, 500 units, where people rent, where they live.
0:25 Brian Rose: Not the tall skyscrapers, where most people buy individual units?
0:28 Grant Cardone: No, those are single units in a big building that a bunch of people share. I want the renter. I don’t want to sell the unit. I want the income, I want the cash flow. That was the third business.
0:40 Brian Rose: And why real estate? Why that asset class for you? You said before you only invest in things you can see.
0:45 Grant Cardone: I’ve just always loved real estate. I think real property resonates with most people. Unfortunately, most people buy the wrong kind of real estate. Again, it’s a selfish decision to have a home.
1:03 Brian Rose: Most people shouldn’t buy a home.
1:04 Grant Cardone: No one should buy a home.
1:06 Brian Rose: Interesting. Which is the opposite of the American…
1:07 Grant Cardone: Homes were not built for people. Homes were built for banks. The bank created that product. To sell money, you can’t just loan people money; you need a product in between. When people really start understanding what I’m telling them, they’re like, “Wait, what did you say?” The bank can’t lend money just for money. You need a reason to borrow money. “Oh, you’re starting a business, that’s a reason.” But that’s really risky for the bank.
1:36 Grant Cardone: So imagine a bunch of bankers sitting around drinking bourbon: “We need to lend more money, that’s how we make money. We get people to give us a dollar and we lend it out nine times.” I read that book when I was 16 years old. “We need something to lend the money on.” So back in the 50s they’re like, “Everybody should have a home! We should call it something like the American Dream.” You can’t just call it a house. Everyone should have one. They got the politicians on it. And basically those homes were built for banks, because who made all the money on the homes? It wasn’t even the builder. Certainly not the homeowner. It was always the banks.
2:31 Grant Cardone: Colleges were another scheme by the banks. Everyone should have a proper education, but they don’t have the money for it. So as they offered debt, as they offered loans to college students and families, those tuitions went up. So we’ve been sold a big old fat lie.
2:55 Brian Rose: And what do people say when you tell them that? You’re crushing everything they’ve been told their whole life.
2:59 Grant Cardone: They’re like, “No, Grant, that’s not true, I want to own my home.” Most people are going to write me after this interview and say, “Can you explain that again?” You should never own one door.
3:09 Brian Rose: And you had a horrible experience with your first single-family home.
3:12 Grant Cardone: Boy, what have you done, man? Nobody’s done their research as closely as you.
3:16 Brian Rose: You’ve been hanging out with the wrong people, Grant. So that taught you a lesson: stay away from single-family homes.
3:27 Grant Cardone: Look, I could come here and we could do four hours on real estate.
3:32 Brian Rose: No, I just wanted to cover it, because I don’t think most people know you do this. Most people have never heard a real estate guy, which you’re not, say “don’t buy a home”. That’s a fascinating statement.
