Cardone Capital and your thoughts?

Rental Property Investor · Phoenix, AZ · Member since 2018 · 31 posts · 30 votes

Hi I'm currently looking to invest with Cardone Capital and I'm wondering if anyone here has ever invested with him or any other similar syndicators. My ultimate goal is to build up my passive income to replace my job income, and when he (Also Origin Investments) talks about the stability of investing into large multifamily funds rather than individual deals, it makes sense.

There are also a few others I've looked into such as Rod Khleiff's, Sunrise Capital Investors (Mobil Home Parks), Origin Investments, and Western Wealth Capital. You are required to be an accredited investor with all of these vehicles.

Thanks for everyone's insight

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Brenda Wright

Flipper · Brooklyn, NY · Member since 2017 · 55 posts · 43 votes

Hi Michael,

The 6% is actually 3% (minus 1% management fee annually, 1% disposition and 1% acquisition fee).

So my opinion: $3,000 is so small when rehabbers (in your network) are searching for any kind of loan amount below 15% from hard money lenders.

Plus you still own the property is something goes wrong (if you're in first position).

Invest in yourself and things you can control.

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Michael Wang
OP
Rental Property Investor · Phoenix, AZ · Member since 2018 · 31 posts · 30 votes
8y
Hi guys thank you everyone for your advice/responses! I've taken the action of diversifying into several syndicators and your help has definitely assisted in making that decision. Cheers!
1 Reply
Calvin Liang
San Francisco, CA · Member since 2017 · 29 posts · 9 votes
8y
@Michael Wang Would like to hear your update on your experience with those different syndicators in the future.
0 Reply
Michael Wang
OP
Rental Property Investor · Phoenix, AZ · Member since 2018 · 31 posts · 30 votes
8y
@Calvin Liang
Will do! Just recently made an investment with REM/Penn Capital on their Dayton Ohio deal. Also have made an investment with the latest Westernwealthcapital.com deal in Mesa Arizona. Looking to participate the min with Cardone Capital possibly in the next month or so. Will keep you updated :) Thanks
1 Reply
Todd Dexheimer
Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
8y
Originally posted by @Brenda Wright:

Hi Michael,
The 6% is actually 3% (minus 1% management fee annually, 1% disposition and 1% acquisition fee).
So my opinion: $3,000 is so small when rehabbers (in your network) are searching for any kind of loan amount below 15% from hard money lenders.
Plus you still own the property is something goes wrong (if you're in first position).
Invest in yourself and things you can control.
That's not how it works. When I offer a preferred return, that means that I give my investors the first 6% (or 8% in my case). Then we split the profits once they achieve the preferred return. the management fees, acquisition fees and any disposition fees are not taken out of the preferred return.
You mention that hat you're in first position if something goes wrong, I would argue that, that is a bad thing. If something goes wrong in a syndication and you are a limited partner you are not personally on the hook (in both cases your money is still on the line)
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
8y
Not every syndicator matches up well with every investor.
An investor might feel their capital is worth X while the syndicator might see their time and work into a project worth Y.
If the 2 parties cannot come to an agreement then no investment happens.
On Class A apartments the pref is not 8%. Lucky if it is 5% because property trades at 5 cap to 6 cap at highest. The goal is then make money off of the fees as a syndicator and hopefully through cost savings and rent growth blend the cap rate up over a 5 to 7 year horizon then exit.
I syndicate but retail properties. I like smaller deals with faster turn around times and less intensive management. I can move with the market better if there is a shift. Lot's of these multifamily syndicators are hyping things up based on buying 3 to 6 years ago at market cycle bottoms. Do investors really think the same returns will be there when the they start the projects today at the top of the cycle and go 5 years out?
It could happen but margins on a larger apartment building exiting for sale in a downward cycle versus coming off of a bottom in a upward cycle makes a big difference.
Many MF syndications these days being passed off as great deals are questionable at best. I have seen some sold in Atlanta in areas that are really trashy that I would never touch for investment. Those areas are high crime and tenant base is very shaky.
Just be careful out there WHO you invest with.
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Lane Kawaoka
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
8y
Someone made a comment about the 6 percent going down to 3% which is interpreted incorrectly. It’s a 6 pref after the fees. If that is confusing I would suggest having a short 10 minute conversation with someone who is in syndications as it’s very common lingo. Paul B. Is right for hustlers you can network and find good partners to work with. For the rest there is crowdfunding sites that take about 20% of the returns.
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Mark RobertsonPro Member
Investor · Salisbury, NC · Member since 2014 · 313 posts · 385 votes
8y
I would run and not walk away. There is plenty of deal flow available to the accredited investor. There is no reason to accept a 6% 65/35 split. If its not at least 8% 70/30, I want even bother looking at the fees and the rest of the due diligence. The ultimate goal is to get terms similar to family offices, ie 10% 80/20. 6% - 65/35 is just pure greed on the part of the sponsor.
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Steve B.
Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
8y
How does this compare with tony Robbins syndication and Nick Vee partners. Inspirational speakers must be magically qualified as the best investors
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Jillian Sidoti
Professional · Murrieta, CA · Member since 2013 · 405 posts · 458 votes
8y
Here is the filing for your review. Not an endorsement to invest: https://www.sec.gov/Archives/edgar/data/1741665/000147793218003316/cardone_1a.htm
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Omar Khan
Rental Property Investor · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
8y
Originally posted by @Steve B.:

How does this compare with tony Robbins syndication and Nick Vee partners. Inspirational speakers must be magically qualified as the best investors
Tony Robbins is doing real estate syndications? You've got to be kidding me! Must become a motivational "coach" to improve my investing prowess.
1 Reply
Billie Young
Member since 2019 · 27 posts · 10 votes
7y
@Michael Wang, any more updates on your experience thus far? I discovered CC via the BP interview with Cardone and it feels safe. I’m a newbie so a familiar name lends the “like, know and trust” factor for people like me who are hesitant to invest with faceless large investors. I don’t say that to be rude. But intuition goes a long way and I somehow just feel good about CC. Would love to know how you feel about your three investments.
Excited to hear your feedback, thank you!
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Bill F.
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
7y
Originally posted by @Billie Young:

@Michael Wang, any more updates on your experience thus far? I discovered CC via the BP interview with Cardone and it feels safe. I’m a newbie so a familiar name lends the “like, know and trust” factor for people like me who are hesitant to invest with faceless large investors. I don’t say that to be rude. But intuition goes a long way and I somehow just feel good about CC. Would love to know how you feel about your three investments.
Excited to hear your feedback, thank you!
Not trying to be rude, but investing with a sponsor because they were on a podcast, have a book, or are a pseudo-celebrity is a terrible idea.
Check out this thread detailing Clayton Morris, of Fox and Friends fame, exploits.
There is no substituent for doing the work yourself. Underwrite their offerings based on your investment criteria. If you don't know how to underwrite a PPM offering or don't have an investment criteria, then you shouldn't be investing in the deal.
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Billie Young
Member since 2019 · 27 posts · 10 votes
7y
That’s not rude, I agree. I don’t follow many people. GC is one of the few. Every person is unique so based on my situation I don’t know if I have time on my side so trying to find ways to quantum leap in this arena. I cannot underwrite today. I will be able to in some time so meanwhile looking for a good place to put a little bit of cash that sitting in savings not earning. I have other investments none of which are real estate.
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Michael Wang
OP
Rental Property Investor · Phoenix, AZ · Member since 2018 · 31 posts · 30 votes
7y
a
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Michael Wang
OP
Rental Property Investor · Phoenix, AZ · Member since 2018 · 31 posts · 30 votes
7y
Originally posted by @Billie Young:
That’s not rude, I agree. I don’t follow many people. GC is one of the few. Every person is unique so based on my situation I don’t know if I have time on my side so trying to find ways to quantum leap in this arena. I cannot underwrite today. I will be able to in some time so meanwhile looking for a good place to put a little bit of cash that sitting in savings not earning. I have other investments none of which are real estate.

Hey Billie,

Sorry for not responding earlier have not been back to this site for awhile. But yes I invested in Cardone Capital fund IV and yes so far it seems to be ok. I initially invested December 31st 2018 but my funds were not utilized until January 28th 2019 which I was a little upset about. I assumed that investing into a fund meant that the money would immediately start working for you but apparently that’s not the case. So my advice there is to ask when the funds that you invest will immediately be used/invested into a deal so that the funds won’t be sitting around dormant in their bank.

I believe I’ve been getting a little over 4% return not quite the 6% preferred, but that maybe the case at the end of the year. I also do like the fact that the distributions are monthly. I have 4 other syndications I’m invested in which 1 of those are annual distributions and 3 are quarterly. Most syndications are quarterly so Cardone does have a unique advantage there.

Another point with Cardone Capital that I do not particularly like is that they do not update you on your investments as far as how the investments are doing or why you are receiving this 4% return. Other syndications I’m in are direct investments into single apartments so there are updated webinars/newsletters on how the properties are performing. You can learn alot through these webinars as well.

So ultimately I believe it comes down to whether you just want something passive or if you want to learn and perhaps get into the space yourself (which then I can refer you to other syndications I’m in). But I do want to make the point that the operator is the most important factor of choosing your investments.

Let me know if you have any other questions :).

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Slade DiChiaro
Member since 2019 · 6 posts · 1 vote
6y
Hi Michael,
Where did you find these other syndicator funds to invest in, did you find a meeting or something where people make sales pitches for investments?
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