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.
it maybe true that he will file for bankruptcy i have no idea. i was just pointing out that alot of people on BP and Youtube are hoping he fails and in the same sentence saying they feel bad for his investors. maybe a change of attitude of hope he doesnt fail, because if he doesnt then you wont have to feel bad for his investors. at the end of the day bankruptcy doesn't mean much for someone like him. how many times has Trump filed for bankruptcy? say he does file, well he will go on and do something else and probably make alot of money again. he is a sales guy and sales people with his talent dont stay down long. my comment also wasn't directed at you so much as it was to others.
Rental Property Investor · Lakewood, OH · Member since 2016 · 119 posts · 156 votes
6y
I just do not understand how a forum full of so many intelligent Investors could be swept up in such ********.
I told my wife 5 months ago when we started our first airbnb that this guy on yt airbnbautomated who sells courses on renting apartments and renting them out as Airbnb's is gonna get smacked... it is so ****ing obvious. Writing is on the wall. Yet people are too greedy I guess.
Hope those who invested get out with just a red ***, not a noose.
Rental Property Investor · Scottsdale, AZ · Member since 2010 · 390 posts · 599 votes
6y
Its a bit premature to write the obituary for Cardone's syndication business. He has a lot of haters but don't forget that Grant has been in the game since the early 2000s. He has bought and sold into this market and had his share of capital gains. He has done significant deals for the last 5+ years as the primary sponsor and purchasing with other people's money. Now I have no clue regarding the reserves, cap rates, and quality of his deals but what I do know is that he has made his in fees and is now staring at potentially 3 years of a buyers market. So save the sorrow, guys like Uncle G. do just fine in times like these. The guys that do not do fine are the posers that set up shop one maybe 2 years ago who instantly became "market experts" and are now in the wrong market and sitting on outrageously overvalued basis and have no strategy but hold and prey.
Its a bit premature to write the obituary for Cardone's syndication business. He has a lot of haters but don't forget that Grant has been in the game since the early 2000s. He has bought and sold into this market and had his share of capital gains. He has done significant deals for the last 5+ years as the primary sponsor and purchasing with other people's money. Now I have no clue regarding the reserves, cap rates, and quality of his deals but what I do know is that he has made his in fees and is now staring at potentially 3 years of a buyers market. So save the sorrow, guys like Uncle G. do just fine in times like these. The guys that do not do fine are the posers that set up shop one maybe 2 years ago who instantly became "market experts" and are now in the wrong market and sitting on outrageously overvalued basis and have no strategy but hold and prey.
He started in 2010 in real estate syndication, but he did buy a personal residence in 2005 I believe which he later sold. Prior to that, he was a car salesman.
Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
6y
Grant personally will do fine and he will get roasted 10X for awhile.
He bought some at the top and it is possible they go down 30% next 18 months. Technically he just devalued part of the groups NOI by 20% perhaps with starting to do pay 12 get 15 month lease, but idk his wiggle room there. I don't think this fund is eligible for gov assistance either. Since he already got paid that part of the story is complete.
Grant personally will do fine and he will get roasted 10X for awhile.
He bought some at the top and it is possible they go down 30% next 18 months. Technically he just devalued part of the groups NOI by 20% perhaps with starting to do pay 12 get 15 month lease, but idk his wiggle room there.
Pretty much. Grant just announced Cardone Capital is also suspending distributions to investors for the next 3 months (April, May and June at a minimum). Economy certainly won't be back to normal in 3 months so probably will see more suspensions or cuts after June.
It looks like most of his large apt purchases happened in the last few years, which he likely overpaid. I believe a good chunk are on 10 yr interest only terms.
San Diego, CA · Member since 2011 · 85 posts · 67 votes
6y
I posted this earlier today on another thread. Probably appropriate for this thread as well:
I have a couple of Grant Cardone books on audible. I like his approach on mindset, sales, etc. I've also watched a couple of Meet Kevin videos 'exposing' cardone's lack of actual real estate background and I wasn't too surprised. He is definitely more carnival barker midwit selling to bozos than harvard mba hedge funder selling to blue bloods.
That said: I know there are discussions about Cardone having stopped paying dividend payments. Again, not too surprising. But I was curious about how his process works, so I watched a few of his videos on the Cardone Capital FAQ page. To see the most interesting video, which I can't link directly to, start here: https://cardonecapital.com/faq... then scroll down underneath to "How Long is the Term of the Fund?
So first, the term of the fund is 10 years! Are you kidding me? This term is for everyone, un-accredited and accredited. But I can't imagine anyone with 200k single/300k joint income or 1 million net worth would wrap up money for 10 years with Grant. But anyway, moving on, it gets better. Start watching again at the 1 minute mark. He actually says it may not be 10 years; at his discretion it might 12, or 14 or 16 years. The way he words it, he doesn't put a cap on the time limit, which may not rule out "forever."
Also, even more interestingly, there are two edits: at just after 1:01 there is an edit, where Grant seems to have added this statement about the ten year term. Then another edit at about 1:06 where Cardone goes into the fact it may be 12, 14, 16 or whatever.
An obvious edit isn't so surprising in general, except for the fact that the content added in the edit is so surprising and Grant is pretty much as smooth as they come, basically he's 'one take Grant' who doesn't need a lot of edits.
So the questions are: 1. Did investors know Grant might keep there money for up to 16 years (or more*)? 2. Most importantly, how long can Cardone keep your money? Is it 16 years, the final number he mentioned, or is it forever? Note at no point did he ever say it 'would be no more than 16,' that is just the last number he tossed out.
Obviously this is point is moot if Cardone goes bust in the upcoming multifamily crash. But it probably is important to see if unsaavy, un-accredited investors were roped into something they didn't understand.
Rental Property Investor · San Francisco, CA · Member since 2013 · 1k+ posts · 1k+ votes
6y
Is he really already bankrupt?!? There is a short self shot video Posted 4/15 on YouTube (just google it) Cardone bankruptcy. It’s either 1- a deep fake, 2- a slimy marketing prank by him, 3- the sad truth
Not sure which is reality, but at any rate I’m sure Grant is already on to his latest and greatest marketing ploy. Given the times, perhaps extreme contrition can yield him books/seminars/coaching/etc., aptly titled: Failing 10X!
Is he really already bankrupt?!? There is a short self shot video Posted 4/15 on YouTube (just google it) Cardone bankruptcy. It’s either 1- a deep fake, 2- a slimy marketing prank by him, 3- the sad truth
Not sure which is reality, but at any rate I’m sure Grant is already on to his latest and greatest marketing ploy. Given the times, perhaps extreme contrition can yield him books/seminars/coaching/etc., aptly titled: Failing 10X!
probably a stunt, but, apparently, his plane is up for grabs, according to this thread:
Ive just read his REI book that cost 8 bucks from a facebook add. It left me a bit uncertain about my current plan of finding a 2-4 unit building for my first deal. He sais that deals dont make sense under 16 units. Partly i think becouse a deal smaller than that would be managed by someone that doesent get paid enough of the income to do a good job? But than he sais never leverage more than 70% on a deal, which leaves someone in my position one option which is to invest in his $10000 minimum moneypool kind of thing. Becouse apparently he has access to the deals only the big guys can get.
Makes me wonder, is it really worth it to start small?
Always start small, not big. Always start with a reserve for when the what if scenarios happen. And trust me, they will. Just remember, if you invest with Cardone, or any other guru, you have little recourse. However, if you buy a property, at least you have a real asset. His investments are paper and not backed by anything real. I am not saying anything is wrong with him or his organization. Hey, I agree, he's a great showman. You know who else were great showmen? B.T. Barnum, Bernie Madoff, and Mark Sanford. One got away with it, the other two are in jail for life. If something tends too seem too good to be true, it usually is.
As for holding out for a 16+ unit building? Hmm, that seems expensive. If you have the bread to put down 20% - 30%, go for it. However, most starting out do not. Nothing wrong with starting off with a flipper, small multi-family, build up reserves and slowly trade up to bigger and better units. When I started out, I started in the urban areas of New York City and New Jersey. Now they are sky high, 40 years ago, they were giving them away. Though, in the C areas of Newark you can find some deals, but it's dangerous down there. They are not rosy or pretty, but you know what, everyone in a metro area needs to live somewhere, because that is where the jobs are. Start small and grow slowly. Cardone, IMHO, is mainly a showman with some really good luck (and timing) in real estate, and that's fine. I am happy to see another success story. I get the same rates he does, so they are not only open to him. I am sure many people here who are seasoned in the industry can get the same rates too. It's based on the property, location, cash flow and price. You can still get 3m+ buildings on LIBOR or agency rates, but you will not get them for under 2m.
I like this guy @Calvin Thomas it is so easy to loose your focus in the Youtube TicTok mind numbing nonsense social media area. Learn the basics and keep it simple.
Ive just read his REI book that cost 8 bucks from a facebook add. It left me a bit uncertain about my current plan of finding a 2-4 unit building for my first deal. He sais that deals dont make sense under 16 units. Partly i think becouse a deal smaller than that would be managed by someone that doesent get paid enough of the income to do a good job? But than he sais never leverage more than 70% on a deal, which leaves someone in my position one option which is to invest in his $10000 minimum moneypool kind of thing. Becouse apparently he has access to the deals only the big guys can get.
Makes me wonder, is it really worth it to start small?
Always start small, not big. Always start with a reserve for when the what if scenarios happen. And trust me, they will. Just remember, if you invest with Cardone, or any other guru, you have little recourse. However, if you buy a property, at least you have a real asset. His investments are paper and not backed by anything real. I am not saying anything is wrong with him or his organization. Hey, I agree, he's a great showman. You know who else were great showmen? B.T. Barnum, Bernie Madoff, and Mark Sanford. One got away with it, the other two are in jail for life. If something tends too seem too good to be true, it usually is.
As for holding out for a 16+ unit building? Hmm, that seems expensive. If you have the bread to put down 20% - 30%, go for it. However, most starting out do not. Nothing wrong with starting off with a flipper, small multi-family, build up reserves and slowly trade up to bigger and better units. When I started out, I started in the urban areas of New York City and New Jersey. Now they are sky high, 40 years ago, they were giving them away. Though, in the C areas of Newark you can find some deals, but it's dangerous down there. They are not rosy or pretty, but you know what, everyone in a metro area needs to live somewhere, because that is where the jobs are. Start small and grow slowly. Cardone, IMHO, is mainly a showman with some really good luck (and timing) in real estate, and that's fine. I am happy to see another success story. I get the same rates he does, so they are not only open to him. I am sure many people here who are seasoned in the industry can get the same rates too. It's based on the property, location, cash flow and price. You can still get 3m+ buildings on LIBOR or agency rates, but you will not get them for under 2m.
I like this guy @Calvin Thomas it is so easy to loose your focus in the Youtube TicTok mind numbing nonsense social media area. Learn the basics and keep it simple.
Just offering some common sense from a guy who's seen a lot.
