In episode #562, Eric and Neil discuss why you should probably not buy an expensive home. Tune in to hear on what you should actually be spending your money on.
TIME-STAMPED SHOW NOTES:
- [00:27] Today’s Topic: Should You Ever Buy a Multimillion Dollar Home?
- [00:34] The home Eric just sold was worth close to a million.
- [00:43] Neil has lived in some big homes.
- [00:55] Neil had an expensive condo on the Las Vegas Strip because the builder was selling them for less than their value.
- [01:20] Neil doesn’t think homes are valuable and a waste of money.
- [01:34] Neil’s friend has a two-bedroom condo and believes real estate is one of the worst investments.
- [01:52] You could make more money investing in Tech.
- [02:00] If you are interested in real estate, look up Grant Cardone, who has a funny YouTube channel all about it.
- [02:09] Eric’s mom is a real estate agent and she is always pushing him to buy a home.
- [02:31] Eric and Neil would rather invest in businesses and themselves.
- [03:19] All the homes Neil has ever purchased were for investments. He believes in staying in hotels and dumping money back into tech.
- [04:00] Instead of wasting money on a down payment, put it back into your business.
- [04:13] You are better off renting.
- [04:54] Warren Buffett talks about staying in your lane.
- [05:10] Eric and Neil focus on investing in what they are good at or that they understand.
- [05:38] If you choose to have a big home, use it to have dinners for entrepreneurs.
- [05:57] Dinners led to $200,000 in deals for Eric’s company.
- [06:15] Eric originally paid for dinners, but then found a way for his guests to pay for it.
- [06:23] He used Eventbrite and put a price on the ticket to dinner.
- [06:37] That’s all for today!
- [06:39] Go to Singlegrain.com/Giveway for a special marketing goodies giveaway!
Leave some feedback:
- What should we talk about next? Please let us know in the comments below.
- Did you enjoy this episode? If so, please leave a short review.
Connect with us:
The post Should You Ever Buy a Multimillion Dollar Home? | Ep. #562 appeared first on Marketing School Podcast.
Full Transcript of The Episode
Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu.
Neil Patel: And I'm Neil Patel.
Eric Siu: And today we're going to talk about if you should ever buy a multimillion dollar home. So I have some thoughts around this. I mean, the home that I just sold is close to a million dollars. It's not a multimillion dollar home, so I'm going to-
Neil Patel: And you made money. Good job. Congratulations. Yay.
Eric Siu: Thank you. But I'm going to pass this over to you because you have actually lived at some pretty big homes.
Neil Patel: Size-wise I don't think they're too big.
Eric Siu: Talking money-wise.
Neil Patel: Yeah. So my problem is I end up liking living in cities, so it's quite costly, and I had a condo in Las Vegas strip that was expensive, but only-
Eric Siu: Where was it at?
Neil Patel: The Mandarin Oriental. But the cool part about it is I only bought it because the builder needed new bank financing so they were just giving really good deals, and I ended up selling it for a million more than what I ended up putting into it and what I ended up purchasing it for. It wasn't bad overall. I don't really think homes are valuable, I think they're a waste. I don't recommend ever spending millions of dollars on homes. You look at people like Warren Buffett, he barely spends money on a home. He has the same one he's been in forever. Here's another thing I've learned. One of my buddies has like $6, $7 billion. He has a small, two bedroom condo, and he was just like, "Real estate's one of the worst investments." And yeah, people always say there's ... a lot of the billionaires are real estate people, but he's just like, "I can easily make 30%, 40% all my money each year in tech." He's like, "Why would I want to own assets like real estate when I'm not going to make 30% to 40% of my money from them."
Eric Siu: Exactly. The way I see it, and I highly recommend anybody that's interested in real estate look at how Grant Cardone does things. He has a really good YouTube channel, just really funny guy, and he's got over $350 million in real estate. And my mom's a real estate agent and she's always pressing me all the time, "You got to buy more real estate." Especially in the Asian-American community that I come from everybody just ... The goal is to get a home, but to me it's a huge pain in the ass. Okay, if I'm going to rent out a bunch of places, I'm going to buy and rent it out, I've got to deal with tenants, or I got to deal with people managing it, all these problems.
For me, and I think this is the same case for Neil as well, I rather just invest in myself or invest in things that I understand whether it's technology, upcoming trends, things like that. Things that I actually get and things that I can actually impact. It's the same thing as what Neil's buddy said, where the stuff that you can impact you're going to gain a 30% to 40% return, and certainly I'm not saying, "Don't diversify." I think it's good to diversify, have some real estate, but for me, I think if I'm ever going to buy some additional real estate, and I will in the future, I would probably just buy it and rent it out, and I just live in the same typical apartment I'm in right now.
Neil Patel: Yeah, it's so much easier. If I had to do it ... I have a home in Los Angeles currently. I have one more left in Vegas, which closes in February sometime. Now I'll be stuck with just one home. Most of the homes almost ... actually, all the homes I've ever bought are for investment purposes. Every once in a while I end up living at them in a short run for a few months. In general, I'm a big believer in just staying in hotels, on the road, do whatever it takes to succeed with the business, and dump all my money back into what I know, which is tech. And even marketing. I have a much higher ROI on my money if I just throw it into Facebook ads or Google ads than I do popping it into real estate.
If you're truly trying to grow, especially with marketing, you got to build a brand, you got to go after all the channels, YouTube, Facebook, Twitter, Instagram, SEO, social media, whatever it may be. All this stuff costs money, and instead of putting a down payment like a few hundred thousand dollars or a million dollars on a home, why not put that money into your business and your marketing and grow faster. Sure, if you have a family you're still going to need a home and you can have a running one, but you're still better off paying for the rental income and then dumping the money back into your business or the marketing to grow faster.
Eric Siu: Yeah, and the way Grant Cardone does it is he has all these real estate ... he does a lot of multi-family, and you can look on the internet on your own, but he is constantly on the move. He might rent a cool place where you pay 15, 20 grand a month, or something like that, like a mansion in Malibu, for example, and then he'll move around. The thing is he's very flexible. You're not just tied down to one area. I think tying up a lot of your capital in just one home and just waiting years and years for it to grow is not ... To me, I think if you're listening to this, you are equipped with all this other stuff to grow your business faster if after return you're going to grow better that way.
The other thing I'll add is if you look at Warren Buffett, he talks about staying in your lane and staying within the things that you understand. His thesis right now is he thinks Bitcoin is going to go to nothing, or he said something around that, but he really focuses on the investments that he understands. So for Neil and I, we focus on the things that we understand, and when you hear us talking about how we're looking for convenience, whether it's living at a hotel or living in a simple apartment, that's only because we just want to focus on the things that we're good at. Just because it's good for us doesn't necessarily mean it's good for you. We're just giving you our feedback.
Yeah, and if you want a big home, and it makes you happy, great, go for it. If you're going to do that make sure you have dinners with other entrepreneurs, other people in the marketing industry who can help you out. By throwing these dinners you'll learn a lot and people will help you grow, and that's great because as they help you grow at least you have a nice home and you're making use of it to grow your business versus just living in it and not using it as something as a "marketing tool."
Yeah, if you want to some ROI numbers on dinners, I mean here ... Yeah, and if you want more ROI on dinners where you want me to quantify it for you, I mean, in 2017 alone, and I'm not trying to make money off dinners per se, it's just about connecting great people, what Neil's mentioning. I actually ... It led to $200,000 in deals. So [crosstalk 00:06:12].
Neil Patel: But wait, what'd you spend on the dinners?
Eric Siu: So in the beginning I was initially paying for it because I just didn't wan to make it difficult for people, but what I found was I could actually just get people to pay for it and I would break even on the dinner.
Neil Patel: How'd you get people to pay for them?
Eric Siu: You use Event [inaudible 00:06:26], so you just connect everyone in there and then you put a price on the ticket, it could a 150 bucks, 200 bucks, and that's how you do it.
Neil Patel: And that's it. And you break even, and then funny enough now you're making money even though that's not your goal.
Eric Siu: There you go. So before we go, we have a bunch of marketing goodies for you. Just go to singlegrain.com/giveaway to learn more and we'll see you tomorrow.
Speaker 1: This session of Marketing School has come to a close. Be sure to subscribe for more daily marketing strategies and tactics to help you find the success you've always dreamed of. And don't forget to rate and review so we can continue to bring you the best daily content possible. We'll see you in class tomorrow right here on Marketing School.
We help great companies grow their revenuesGet Your Free Marketing Consultation
Check Your Growth Score!
Type your domain below and see a report about your website.