NEW YORK, NY — Real estate investor Grant Cardone laid out a strategy in a 2023 TikTok clip that he said he would use if he were down to his last $5,000. His plan centered on buying a $100,000 four-unit property, moving into one unit and renting the other three so the building could help cover his housing costs.
Cardone framed the idea as a way to use a small amount of cash to gain control of an income-producing asset. After living there for 12 months, he said he would move out, rent all four units and increase rents by $200. In his telling, the property could become a far more valuable asset over time, with the $5,000 turning into roughly $200,000.
What The Math Requires
The basic concept fits a real estate strategy often called house hacking, where an owner lives in one unit of a multifamily property and uses rent from the others to offset the mortgage and expenses. Financing for owner-occupied two- to four-unit properties does exist, and some eligible buyers can use low-down-payment loans. Fannie Mae also expanded financing options in late 2023 for some owner-occupied two- to four-unit homes, allowing borrowers to finance up to 95% of the property value.
That said, the leap from $5,000 in cash to closing on a $100,000 fourplex is not automatic. Buyers still must qualify for the loan, the property has to meet lender standards, and upfront costs such as closing fees, prepaid expenses, inspections, reserves and repairs can push the needed cash well above the down payment alone.
Why The Deal Is Hard
Cardone’s example also depends on a very specific property being available. Finding a livable, financeable four-unit building at that price can be difficult in many markets, especially where home values have risen sharply. Even if a buyer finds one, the financial results depend on keeping the units filled, collecting rent on time and avoiding large repair bills that can quickly change the numbers.
The plan assumes rents can support the carrying costs and that any later rent increases comply with lease terms and local rules. It also assumes the building can appreciate enough to justify the move. None of that is guaranteed, and a roof leak or broken furnace can erase a lot of paper gains much faster than a rent bump can restore them.
What Buyers Can Check
For readers interested in the general idea, the key questions are local: what small multifamily properties are actually on the market, what lenders will finance, and how much cash is really needed to close. Buyers can check loan programs through mortgage lenders, review property requirements with inspectors and compare rent levels against current listings in their area before assuming a deal will work.
There are also lower-cost ways to get real estate exposure without becoming a landlord. Fractional-investing platforms such as Arrived let investors buy small shares of rental properties starting at $100, while the platform handles management. That approach is very different from Cardone’s leveraged plan, but it gives people another route into the asset class with far less cash and no need to move into a unit themselves.
More on what homes, rents and new builds are doing near you, on RHS Commoner.
