Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
My office received a call from one of his reps today. I thought the pitch was a pie in the sky type of deal. Anyone hear of this guy on Youtube, Grant Cardone? He boasts a half a billion dollar real estate empire in Florida and Texas. I believe he get's around 90% financing, plus he also takes in money from investors. Something doesn't seem 100%. He also does these seminars and other marketing stuff. He seems all over the place and also trying to raise capital from others. Just some basic math, if he's financing 90%, paying out at least 6% to investors, and locking in a 3.5% mortgage from Fannie Mae; because he's a preferred client, there doesn't seem much leeway for him to make money. I understand the cash flow portion of it, as that is what we do. We just do not raise capital or borrow money that much anymore. However, my concern is that when the recession hits and the evictions start, that cash flow will dry up. He seems to be working on extremely thin margins. He's also in very lofty areas of Miami; which were the first to go in the last recession. He reminds me of the Polka King (https://en.wikipedia.org/wiki/Jan_Lewan).
My office received a call from one of his reps today. I thought the pitch was a pie in the sky type of deal. Anyone hear of this guy on Youtube, Grant Cardone? He boasts a half a billion dollar real estate empire in Florida and Texas. I believe he get's around 90% financing, plus he also takes in money from investors. Something doesn't seem 100%. He also does these seminars and other marketing stuff. He seems all over the place and also trying to raise capital from others. Just some basic math, if he's financing 90%, paying out at least 6% to investors, and locking in a 3.5% mortgage from Fannie Mae; because he's a preferred client, there doesn't seem much leeway for him to make money. I understand the cash flow portion of it, as that is what we do. We just do not raise capital or borrow money that much anymore. However, my concern is that when the recession hits and the evictions start, that cash flow will dry up. He seems to be working on extremely thin margins. He's also in very lofty areas of Miami; which were the first to go in the last recession. He reminds me of the Polka King (https://en.wikipedia.org/wiki/Jan_Lewan).
Am I reading into the numbers incorrectly?
I don't want to comment on Cardone one way or the other but I wanted to note this post - everyone always needs to make sure they do their own research and due diligence. BP works hard to have good podcast guests but one should never assume that just because someone was on the radio they're real or worthwhile. Question everything - make no assumptions. Cardone is famous, but Bernie Madoff was famous too.
@Calvin T. He's too cocky for me most of the time but he know his stuff. But he's killing his investors in the fees he collect. The front, back and the middle. But hell if you got it you got it if your doing all the work you might as well get paid for it. I basically listen to him on how to make and keep your money. If I had the money I would do it myself instead of paying somebody to do it for me
Perhaps, no one knows. I am just being devils advocate. Afterall, it's not like he's been around prior to the crash. IIRC correctly, his last two businesses weren't too successful. He has no track record. That is what I am trying to explain. I just say, buyer beware. He's intelligent and has good charisma. Does he really have the success to back up what he says? Maybe, maybe not. Unless he's showing these investors his financials, no one really knows.
@Calvin T. If a person can talk faster than me I usually don't trust them. Ijs. I listen because he has come knowledge but like Jay Morrison and Grant. I will listen to the stuff that interest me but they would never get my money
@Calvin Thomas I checked with accountant and also with GC’s team, they provide a K1 that covers all the deductions and distributions. Also, I checked with attorney, I am an accredited investor and in order to become an accredited investor I had to go through an attorney to start with. GC’s offering is governed under the laws of SEC, it will be very much like going into a syndication with several people who we know and see on various BP podcasts.
@Calvin Thomas I checked with accountant and also with GC’s team, they provide a K1 that covers all the deductions and distributions. Also, I checked with attorney, I am an accredited investor and in order to become an accredited investor I had to go through an attorney to start with. GC’s offering is governed under the laws of SEC, it will be very much like going into a syndication with several people who we know and see on various BP podcasts.
I wish you well then. Let us know how it works out.
anybody that markets mostly to newbie millennials who live in their parents basement should be looked over . anyone who goes everywhere with his shirt off talking like a punk kid with a foul mouth is not the type of person I want to park my money with .but hey if your happy with 6% then go for it .
@Dennis M. I want a higher return but almost all syndicators I talked to offer around that much for accredited investors, whether it is apartments or mobile home parks, etc. but you share in the upside also, I am looking for infinite returns once I get all my invested capital out, that was the main selling point for me. My other option was to go out on my own and buy a 20 to 40 unit complex which would have resulted in similar ROI and much more time consuming activities to run it myself or through property manager which would not scale as fast as a 400 unit complex. May be the next one I invest in will be on my own once I learn some more about the intricacies of this field.
anybody that markets mostly to newbie millennials who live in their parents basement should be looked over . anyone who goes everywhere with his shirt off talking like a punk kid with a foul mouth is not the type of person I want to park my money with .but hey if your happy with 6% then go for it .
Good point Denny.
Bottomline: do your due diligence and be very, very careful before you invest.
@Dennis M. I want a higher return but almost all syndicators I talked to offer around that much for accredited investors, whether it is apartments or mobile home parks, etc. but you share in the upside also, I am looking for infinite returns once I get all my invested capital out, that was the main selling point for me. My other option was to go out on my own and buy a 20 to 40 unit complex which would have resulted in similar ROI and much more time consuming activities to run it myself or through property manager which would not scale as fast as a 400 unit complex. May be the next one I invest in will be on my own once I learn some more about the intricacies of this field.
Read the PPM. Personally, it fails my criteria on the first or 2nd page. I don't invest in someone because they talk a good talk on YouTube. I say this as a huge fan of Grant. You could tell he is using his fanbase to get investors, who will invest in deals with crappy terms and heavily in favor of the sponsor. Out of the 50 or so PPMs I've read, Cardone Capital was the easiest decision. Classic red flags all over.
@Dennis M. I want a higher return but almost all syndicators I talked to offer around that much for accredited investors, whether it is apartments or mobile home parks, etc. but you share in the upside also, I am looking for infinite returns once I get all my invested capital out, that was the main selling point for me. My other option was to go out on my own and buy a 20 to 40 unit complex which would have resulted in similar ROI and much more time consuming activities to run it myself or through property manager which would not scale as fast as a 400 unit complex. May be the next one I invest in will be on my own once I learn some more about the intricacies of this field.
I see your point ..Well the good news is your in a great position to be in and you have plenty of choices here
Its still cash flows no matter what the market is doing. When the market crashes. Hold on to your properties keep the cash flow going. Buy after it crashes and sell when its high. Think long term. Property value always goes up if you think and do things on a long term spectrum.
@Andrey Y. thanks for your feedback Andrey. I looked at a few PPMs. In my experience so far, I have not had issues with GC, but I am new at this type of investment, will share with everyone if I see problems later but I think GC is an honest man. GC has been very responsive, he gave very good advice to me as I presented him the other options I was looking at. Plus Ryan who works for him was very responsive and explained everything in detail plus shared his personal experiences as an investor on how he started and grew his investments. Plus his other team members were very helpful also. I think GC has built a good team around him and I can tell the way he talks and the way he responds to emails, etc. that he himself works very hard, let’s see how things progress. I will continue to look for other avenues where I can get direct exposure to deals that I can do myself and learn that aspect of this field as well.
Its still cash flows no matter what the market is doing. When the market crashes. Hold on to your properties keep the cash flow going. Buy after it crashes and sell when its high. Think long term. Property value always goes up if you think and do things on a long term spectrum.
Sorry, real estate (nor business) does not work that way. The only thing that always goes up are taxes.
@Calvin T. I’d rather not have someone else invest my money
Smart man. I fully agree in using OPM. However, there is one caveat. I keep control. As long as you are in control, you are golden. In this instance, Mr. Cardone is using the OPM and has 100% control. Not an good strategy for an active investment in my opinion.
I really enjoy reading all the comments that talk down about Grant and Cardone Capital, especially the ones that have no facts to them.
I referenced my facts as per his perspectus. However, I never talked down about anything in regard to Mr. Cardone or Cardone Capital. Just breaking it down in lamens terms for all to understand. However, people are welcomed to use my references as they wish. It's not my money. Just remember, advice is usually worth what a person pays for it. Take all advice with a grain of salt and do your own due diligence.
@Dennis M. I want a higher return but almost all syndicators I talked to offer around that much for accredited investors, whether it is apartments or mobile home parks, etc. but you share in the upside also, I am looking for infinite returns once I get all my invested capital out, that was the main selling point for me. My other option was to go out on my own and buy a 20 to 40 unit complex which would have resulted in similar ROI and much more time consuming activities to run it myself or through property manager which would not scale as fast as a 400 unit complex. May be the next one I invest in will be on my own once I learn some more about the intricacies of this field.
I don't know which syndicators you have talked to, but all the ones I have seen offer higher projected returns than GC is offering, and have more experience than he does. and some of them have refinancing in mind when they start out...
He started with RE about 25 years ago. I am assuming you are referring to the crash near 2008. So, Cardone was investing prior.
Sort of similar to you in some sense. You were around for about 40 years. Until this thread, I had not heard of you. Without doing any DD to check your track record, I take it at face value and figure you have been operating for 40 years. That you would have seen ups and down. Unless I was looking to invest with you, I would not dig further.
As Cardone is making a public offer to retail investors (Reg A), there is a lot of information out there. Registrations with the SEC and other info. He shares more info that many other RE investors.
How well any one project goes in the future is to be seen. Still, if he has been operating RE investments for 25 or more years, something is working. The past is not a predictor of the future no matter how many years the past has run.
Having other businesses that had bad patches is something worth checking if someone was investing. That said, I come from Silicon Valley and investment banking besides being a RE investor. Stuff happens. You dust yourself off and fix it. If there were no failed businesses we would not be living in the USA.
He started with RE about 25 years ago. I am assuming you are referring to the crash near 2008. So, Cardone was investing prior.
Sort of similar to you in some sense. You were around for about 40 years. Until this thread, I had not heard of you. Without doing any DD to check your track record, I take it at face value and figure you have been operating for 40 years. That you would have seen ups and down. Unless I was looking to invest with you, I would not dig further.
As Cardone is making a public offer to retail investors (Reg A), there is a lot of information out there. Registrations with the SEC and other info. He shares more info that many other RE investors.
How well any one project goes in the future is to be seen. Still, if he has been operating RE investments for 25 or more years, something is working. The past is not a predictor of the future no matter how many years the past has run.
Having other businesses that had bad patches is something worth checking if someone was investing. That said, I come from Silicon Valley and investment banking besides being a RE investor. Stuff happens. You dust yourself off and fix it. If there were no failed businesses we would not be living in the USA.
Perhaps, but there are a few differences here.
1) My ego is no where in the realm of his.
2) I am not raising capital from outside investors
3) I am not promising dreams that, for most, are highly unrealistic and unobtainable without hard work, common sense, dedication and a little bit of luck.
4) The propspectus is very shady. Two, it's highly speculative (junk status) and is not rated by a 3rd party. The only two parties that always make money are CC and legal team (you?).
5) Come to New York. I visit the Bigger Pockets events and meetups from time to time. Again, I do not need to show my success or boast about my lifestyle. Some people do, and that is perfectly fine. I am an old man and I like my privacy. However, happy to advise others; should they want to listen.
6) We are not alike; me and Mr. Cardone. Completely different. I started in the 70s, according to what research I've done, he's not been that successful (by his own accord) in "Hollywood" or in the business world until he got into real estate at the end of the crash. I believe he had a drug problem in the 70's or 80s which he admitted. He also admitted that most of his businesses have failed prior to his real estate empire. I believe he or his prior businesses had also circled bankruptcy and, again by his own accord, undercapitalized and mismanaged. Again, mistakes happen, but his track record doesn't impress me. Me? I do not have to impress anyone, I do not need to raise money from outside investors.
Again, if it's all 100% legit, I'm cool with it. However, the guy has little creditibility in terms of a track record for my taste. He's a good showman, and he lives the Ric Flair lifestyle (didn't he go bankrupt too), but the prospectus has more red flags the a Red China communist day parade. I just hope that when the party ends, the little guys who are investing with him do not end upstream without a paddle. I broke down my issues with the prospectus, and that was not all of them. There are about 2 dozen more. But hey, what do I know... I am not a lawyer.
I enjoy watching Ben Mallah and GC. I get different things from each. I learn from everyone, but I do my own deals. My background is in sales/marketing and there’s a reason why Fortune500 companies have insane marketing budgets and armies of sales staff. Largest share of voice/mind wins. Always. Not even close.
Ben Mallah and GC are playing the game in different ways, but both can teach something to everybody on BP, regardless of how we feel about them
