Why Grant Cardone would put your $50K into real estate before anything else — and how everyday investors can do the same

His first piece of advice? Don’t be reckless with it.

“Don’t invest it in something you don’t know, because it could go to zero. Definitely don’t bet it on one of these cryptos,” he said.

Then he goes straight to the point.

“What you want to do is multiply the money first. You want to put it in something where you immediately get a multiplier. The only thing that does that on the planet is real estate.”

The multiplier effect

Cardone’s logic centres on leverage — the ability to use a small amount of your own money to control a much larger asset.

“When I take 50 grand and I put it in a real estate deal, it immediately becomes $200,000 or $250,000 because of leverage — and I have positive cash flow. The chances of that going to zero is nilch. You’re not going to go from a $250,000 investment to zero in 15 minutes.”

In practice, this means using your $50K as a down payment on a property worth several times that amount, then using rental income to help cover the mortgage and other costs. A minimum down payment on an investment property is typically 20%, meaning $50,000 could theoretically get you into a $250,000 property.

It’s a compelling idea, but it’s worth noting that leverage cuts both ways. If property values drop, interest rates climb or the building sits empty for months at a time, your losses are magnified in the same way your gains would be. Location, financing terms and local market conditions all play a big role in whether real estate delivers the returns Cardone describes.

His advice on that is straightforward: “Pick the right market — a solid market, positive job growth and one that has occupancy,” he said. “Have your cash flow be positive from day one and buy a great asset and you’ll never go to zero.”

Why real estate has such a strong track record

Cardone isn’t alone in his enthusiasm for real estate as a powerful wealth-building tool. Investing legend Warren Buffett has described real estate in similar terms. In 2022, the Oracle of Omaha said that if you offered him “1% of all the apartment houses in the country” for $25 billion, he would “write you a cheque (2).”

Part of real estate’s appeal is its relationship with inflation. When the cost of living rises, property values and rents tend to go along with it — giving real estate investors a natural hedge against the eroding power of inflation. This is especially relevant for Canadians right now, as everyday costs have climbed over the past few years, and may continue to do so amid global tensions.

You don’t need to buy a whole property

Here’s the part Cardone doesn’t always mention: you don’t need to be a property owner to invest in real estate. In fact, there are more ways than ever to get real estate exposure — for almost every budget in today’s market.

Real estate crowdfunding is one of the most accessible. The idea is simple: a group of investors pool their money to buy properties they couldn’t afford individually. Online platforms handle the property management and logistics, while investors earn a share of the rental income and any appreciation in the property’s value. Some crowdfunding platforms let you start investing in real estate with as little as $100.

The main downside to real estate investment is liquidity. Unlike stocks, crowdfunding investments can be hard to exit quickly. Your money may be tied up longer than you expect. And because it’s still a relatively new way of investing, the number of available platforms and projects is more limited in Canada than in the U.S. market. Do your homework on fees, project selection and track record before making a commitment.

Other ways to invest in real estate

Crowdfunding is just one option for getting a piece of the pie. Here’s a list of the most common ways investors can get in on real estate, from fully hands-on to completely hands-off:

Rental properties. This is the most direct route: You buy a property, rent it out and collect income while building equity over time. Properties near job centres, universities or transit hubs tend to attract more reliable tenants and lower vacancy rates. You can manage it yourself or hire a property manager to handle the day-to-day responsibilities.

House flipping. This means buying a property, renovating it and selling it for a profit. It can generate strong returns when done well, but it requires a sharp eye for renovation costs, a good read on the local market and solid financial backing when things don’t go exactly as planned.

Real Estate Investment Trusts (REITs). Invest in real estate the same way you’d buy a stock. REITs are companies that own and operate income-generating properties — apartment buildings, shopping centres, hospitals, industrial plazas and more. REITs trade on the Toronto Stock Exchange (TSX) and are required to distribute most of their taxable income to shareholders as dividends, making them popular with income-focused investors.

REIT Exchange-Traded Funds (ETFs). Take REIT investment one step further and bundle multiple REITs into a single, low-cost investment. ETFs offer broad diversification across property types and regions — all without the need to pick individual REITs yourself. Like REITs, ETFs earn income primarily through regular dividend payments and capital appreciation.

Earn passive income in real estate

One of the biggest draws to real estate in any form is its potential to generate passive income. And you don’t have to own a rental property outright to benefit.