Billionaire Warren Buffett has famously said the first rule of investing is, “Never lose money.” Apartments definitely have the possibility to provide you and your family with this assured profitability and pass the ‘Buffet Test’. 

However, not all assets are equal. I look over hundreds of deals to only buy two or three. With that in mind, I’m going to outline how you can determine if multifamily real estate passes this test. 

Don’t have faith, know

First of all, if you’re not willing to shop and do the homework, don’t get into this space. The only way you can be sure apartments you’re looking at will pass the “Buffett Test” is through discipline and comparison. 

At the same time, this is where multifamily real estate also has an advantage. If you want to hear how I’ve been making the most of multifamily for over 30 years, check out my Real Estate Training.

All of the information you need to ensure a deal will make money is readily available. 

Multifamily assets have history and records you can review. Everything from the rents the property collected to the debt on it are right there. 

What to do once apartments pass the ‘Buffett Test’

I’m not going to go into great detail about cap rates and what debt you should look for here. I have many more articles that answer specific questions better on the real estate section of this website

Nonetheless, you absolutely need to learn about the market you want to buy in. Then, be sure you do all the math multiple times before you go buying a deal. 

Be Great,

Grant Cardone

Disclosure: This content is intended to be used for educational and informational purposes only. Before investing, you should always do your own analysis based on your own financial and personal circumstances before making any investment. Grant Cardone is an industry expert who has been investing for over 30 years and his opinion is based solely on his own personal experience and circumstances. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment. Investment involves great risk and there is no guarantee of performance or results.

We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice.  We recommend seeking the advice of financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.

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Star of Discovery Channel’s “Undercover Billionaire,” Grant Cardone owns and operates seven privately held companies and a private equity real estate firm, Cardone Capital, with a multifamily portfolio of assets under management valued at over $4 billion. He is the Top Crowdfunder in the world, raising over $900 million in equity via social media. Known internationally as the leading expert on sales, marketing, and scaling businesses, Cardone is a New York Times bestselling author of 11 business books, including “The 10X Rule,” which led to Cardone establishing the 10X Global Movement and the 10X Growth Conference, now the largest business and entrepreneur conference in the world. The online business and sales educational platform he created, Cardone University, serves over 411,000 individuals and Forbes 100 corporate clients throughout the world. Voted the top Marketing Influencer to watch by Forbes, Cardone uses his massive 15 million plus following to give back via his Grant Cardone Foundation, a non-profit organization dedicated to mentoring underserved, at-risk adolescents in financial literacy, especially those without father figures.


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