Generated Title: Robert Herjavec's Million-Dollar Real Estate Bet: Is It Really That Safe?
Alright, let's dissect this. Robert Herjavec, the Shark Tank guy, recently told Grant Cardone that if he were down to his last million, he'd plow it into real estate. "Build a foundation," he said, get an income stream, and then go do "crazy stuff." Sounds good on paper, right? But let's inject some data-driven skepticism into this scenario.
The "Safety" Myth
The core argument is that real estate provides a safe, stable income. And yes, historically, real estate has been a reliable store of value. JM Financial estimates an average appreciation of 6% to 9% per year. (That's before taxes, maintenance, and the occasional tenant from hell, mind you). But "stable" is relative, especially looking at the current climate.
Herjavec isn't wrong that “desperate people do stupid sh-t.” Taking desperation out of the equation is sound advice. However, the real estate market of 2025 isn’t your grandfather’s market. NAR data shows first-time homebuyers are half the share they were in 2007. Half! That's not just a dip; it's a chasm.
So, who's buying all this real estate? Wealthy individuals and corporations, driving up prices and making it harder for the average Joe (or Josephine) to get in the game. This creates a bifurcated market: luxury properties that appreciate nicely for the already-rich, and a struggling market for everyone else. Is Herjavec suggesting buying a Manhattan Billionaires' Row apartment with his last million? Because that's a very different proposition than a starter home in Detroit.
And here's the part that I find genuinely puzzling. This advice is coming from a guy who's made almost 100 deals on Shark Tank, many of them in tech. Tech is volatile, sure, but it also offers the potential for exponential growth that real estate rarely matches. I've looked at hundreds of these interviews, and this particular endorsement of "safety" feels… out of character. As Shark Tank’s Robert Herjavec shares his take on the AI boom shows, he is usually focused on the future.
The Devil's in the Details (and the Interest Rates)
Let's get granular. Say you do have a million bucks, and you follow Herjavec's advice. What kind of income stream are you realistically looking at in 2025? Interest rates are still elevated, which means mortgage rates are, too. A million-dollar property might net you, what, $4,000-$5,000 a month in rent? After expenses, you're probably looking at closer to $3,000 (to be more exact, maybe $2,800). That's not exactly "go out and do crazy stuff" money, is it? That's "pay the bills and hope the roof doesn't leak" money.
And then there's the question of diversification. Putting all your eggs in one real estate basket is inherently risky. What if there's a local economic downturn? What if a major employer leaves town? What if the property needs major repairs? Suddenly, that "safe" investment looks a lot less secure. Herjavec himself has a diversified portfolio, including properties in Manhattan, Sydney, Los Angeles, and Ontario. He's not relying on a single rental property in a single market.
The argument for real estate often hinges on inflation. As building materials and land costs rise, existing property values go up, as do rental rates. True, but that's a lagging indicator. Rising costs also squeeze renters, increasing the risk of vacancies and rent defaults. It's a balancing act, not a guaranteed win.
Herjavec’s own real estate holdings are impressive, no doubt. From a four-bedroom apartment on Billionaires’ Row to estates in Sydney and lakefront properties in Canada, he's clearly doing well. But that’s the point: he already had the capital to build that kind of portfolio. Starting with a single million in 2025 is a completely different ballgame.
Reality Bites: It's Not That Simple
Herjavec's advice isn't wrong, per se. Real estate can be a solid investment. But it's not a magic bullet, and it's certainly not a guaranteed path to riches, especially in the current economic climate. The idea of a "safe" real estate investment yielding enough passive income to fund entrepreneurial ventures feels… well, a bit naive.
The "Shark Tank" star also invested in a breathalyzer company that went under investigation by the FDA. (All the sharks invested in it). He seems to have a history of failing forward.
Ultimately, Herjavec's strategy works for Herjavec, a multi-millionaire with access to resources and opportunities that most people don't have. For the average person with a million dollars, a more diversified approach is probably a wiser bet.