Grant Cardone Says If He Had $1 Million To Invest, He’d Get Rid of It Immediately and Take Out a $3M Loan — Here’s Why

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A $1 million investment portfolio sounds like the finish line. For real estate entrepreneur Grant Cardone , it's apparently the starting gun.

In a recent TikTok video , Cardone explained how he would deploy his first $1 million, saying he'd put the money into a single investment rather than spread it across multiple assets.

"I would take $1 million, figure out how do I first improve the value of the $1 million," he said. "No. 1, get rid of it. No. 2, how do I improve the value of it?"

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Cardone's strategy revolves around leverage . Rather than putting the entire $1 million into a property, he says he'd use it as the equity for a $4 million real estate purchase and borrow the remaining $3 million.

"There's only one asset class that you can do that with. It's real estate," Cardone said. "I would take the $1 million and I would immediately put it into a $4-million real estate purchase and get a $3 million loan."

The math behind his example is straightforward. If the $4 million property appreciates 10%, the gain would be $400,000. Cardone points out that $400,000 represents 40% of the original $1 million equity.

That's the power of leverage in a nutshell. The investor controls a larger asset with less of their own money, so gains on the full property can translate into a much larger percentage return on the initial equity.

But the same math works in reverse. A 10% decline on a $4 million property would mean a $400,000 drop in value, while the $3 million loan would still have to be repaid.

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Real Estate Can Bring More Than Appreciation

Cardone also points to cash flow and tax benefits as part of the appeal.

The IRS allows owners of qualifying rental property to deduct certain expenses, including mortgage interest, property taxes, insurance, repairs and depreciation. Those deductions can reduce the amount of rental income subject to tax, although various rules and limitations apply.

That doesn't mean a $4 million property automatically produces a massive tax deduction. The actual tax treatment depends on the property, how it's used, the owner's situation and applicable tax rules.