Cardone Capital Investing

Multi-Family and Apartment Investing
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Cardone Capital Investing

Reid Mathews
Financial Advisor · Myrtle Beach, SC · Member since 2018 · 16 posts · 57 votes

I’m a huge Grant Cardone fan and have been for a long time. I’ve been debating for awhile whether to get into real estate investing on my own or investing in his crowdfunding company Cardone Capital. He sure makes it sound incredible. What are some of yalls opinions?

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Brian BurkePro Member
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
7y

There are two kinds of people in the real estate fundraising/syndication business.  Good operators, and good marketers.  They aren't often found together, most of the time they are one or the other.

If you are fundraising, and you are a good marketer, you are going to make your offering sound amazing.

If you are a good operator, you are going to talk about risk and assumptions and markets and variables...stuff that doesn't sound amazing at all but shows that you are prudently acknowledging those elements of the business and, if you are a really good operator, have a plan to address them.

I guess that's why I suck at marketing...

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  • Jennifer Merrick
    Member since 2018 · 2 posts · 24 votes
    7y

    Reid Matthews - Just FYI - I'm really disgusted at the snarky (if not outright rude) tone in some of the replies you received.  Some of the responders may not have the wherewithal to realize their tone is condescending and rude.  I'm sorry you have to put up with that, considering you asked the "community" a support question.

    To those of you that indulge your ugly sides, please learn the difference between money and class.  Everybody needs to put that "I'm so brilliant" attitude back in their whazoo, or participation will start to decrease.   If your time is so valuable, why would you waste it writing snarky comments?  Being nice is free, doesn't cost you a thing...

    To Bigger Pockets - It won't be much of a community if new people become leary of asking questions in this forum.  

    21Reply
  • Paul B.
    Rental Property Investor · Dallas, TX · Member since 2015 · 503 posts · 504 votes
    7y

    Regardless of whether you like his other work, if you are considering investing with GC, look at him as just another real estate syndicator, and evaluate him against other syndicators. There are numerous articles on this site on how to evaluate a potential passive investment in a syndication. @Alina Trigub posted one already. Then decide whether you like what he is offering better than other offerings you might see.

    I personally like investing in a particular property rather than a fund. It's easier to evaluate the deal itself, and to trace how the money is going in and coming out when there is only one property. I also have developed personal relationships with several syndicators, so I am investing in that person, not just a brand that is well-marketed. 

    5Reply
  • Brandon L.
    Real Estate Agent · Falls Church · Member since 2012 · 2k+ posts · 1k+ votes
    7y

    @Marjeanne Fields you say you have seen better returns so I assume you heard him talking about the returns he is getting. Maybe you can share what you heard with the group, and where you are seeing better returns.

    0Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    7y

    Hi

    @Brandon L. @Shane Clevenger

    The returns are defined by the PPM (private placement memorandum) which is by far the most important document to read when investing in any syndication.  If you look at the other cardone thread you will see my analysis of one of his deals vs typical.  General thought is returns are decent but less than typical.   Fees seem average.   

    https://www.biggerpockets.com/forums/520/topics/479120-cardone-capitalanyone-looked-into-this?page=1

    But remember the PPM defines the payout if things work, so that is ideal, it only goes down from there in real life.    I have not seen anything that implies Cardone is anything but an upright and conscientious sponsor, but keep in mind he has never syndicated through a downturn. 

    You will also see in that thread my suggestion of looking at deals on CrowdStreet  and RealCrowd which lists PPM and analysis of dozens of different sponsors.  There are also education tabs to see some basic theory and terms.   Another good resource is the Origin Capital blog.  They are one of the biggest most successful syndicators and they have a very good blog that looks at the inner workings.

    Good luck

    2Reply
  • Shiva Bhaskar
    Investor · Los Angeles, CA · Member since 2017 · 523 posts · 476 votes
    7y

    I am looking into investing in syndication for bigger deals myself (besides doing my own smaller deals, as I do already), and while I love Grant's motivational spirit, I think the main upside of his fund is the liquidity, and smaller investment amount. There definitely seem to be much better ROI there, but you can't get out in one year, and the minimum investment is much larger (i.e. for accredited folks only).

    I would listen to some of the Bigger Pockets podcasts on syndication (the one with Joe Fairless is very good, and he has a great podcast of his own too, as is with Marcus Becker, more recently). They have lots of interesting information, that I found really relevant. Also, check out platforms like Equity Multiple, which let you get access to a range of different syndication deals. I do think if you have the capital and time frame (or your client's do, I see you're a financial adviser), putting more money into a good deal with higher ROI, is a better bet. Also, would rather analyze and invest in specific deals that meet YOUR crtieria, rather than a fund.

    3Reply
  • Philip McCleary
    Rental Property Investor · Houston, TX · Member since 2018 · 44 posts · 31 votes
    7y

    @Reid Mathews

    I am in the same boat but I’m not ready. I have a goal to get 50 SF homes and 10MM in assets (currently at 15). At that point in time I will chunk up my portfolio into a 1031 to pick up a nice MF unit. However, where do you find them? LoopNet has garbage deals

    1Reply
  • Andrew Gingerich
    Rental Property Investor · Wenatchee, WA · Member since 2018 · 99 posts · 103 votes
    7y

    I don't know a thing about Grant's funds. But what I am reading here is you get 6% return. Personally, I would take my investment and go buy a REIT mutual fund. Vanguards REIT has returned 10+% annualized since 1996. It's closed to new investors but there are many other good ones out there. 6% isn't enough for me to get excited. If you like real estate and are ready to settle for 6% I'd suggest going for the REIT and getting 10%.

    I think most buy and hold RE investors are looking for cash on cash returns north of 10% and total unrealized /realized returns, with appreciation of leveraged assets, tenant principal pay down, and monthly cash returns north of 20%. At least that's what attracts me to real estate, not following some famous dude for 6%.  

    4Reply
  • Marjeanne Fields
    Real Estate Agent · Phoenix, AZ · Member since 2016 · 69 posts · 83 votes
    7y

    Responding to:

    Reid Matthews - Just FYI - I'm really disgusted at the snarky (if not outright rude) tone in some of the replies you received. Some of the responders may not have the wherewithal to realize their tone is condescending and rude. I'm sorry you have to put up with that, considering you asked the "community" a support question.

    To those of you that indulge your ugly sides, please learn the difference between money and class. Everybody needs to put that "I'm so brilliant" attitude back in their whazoo, or participation will start to decrease. If your time is so valuable, why would you waste it writing snarky comments? Being nice is free, doesn't cost you a thing...

    To Bigger Pockets - It won't be much of a community if new people become leary of asking questions in this forum.

    @Jennifer Merrick- You are so right. @Reid Mathews should not have to justify his profession just to ask a question. Arent we all on here to learn, help each other, and get better? Keep asking your questions Reid. 

    4Reply
  • Jorge Torres
    Specialist · Miami, FL · Member since 2018 · 22 posts · 18 votes
    7y

    @Reid Mathews

    Best Real estate Fund I have found and invested in is called MIGSIF and they offer a cross collateral against all their assets, (SAFETY), they pay 8% per year as a debt fund (cash flow) and you can cash out within a few months notice (liquidity) - they have been operating for a long time very successfully

    The Fund Manager not only is a principal and a manager of the fund, but he also teaches and partners up on deals with his investors and other funds -

    He has been filed with the SEC for over a decade - he has another fund registered with the SEC - very transparent, his deals are in San Francisco, CA, OH, FL and Puerto Rico

    He also has a structure to reduce his investors’ taxes through a tax incentive structure which is extremely beneficial for people like me with a high income tax bracket

    I have been with him for years and they keep on growing steadily

    1Reply
  • Jorge Torres
    Specialist · Miami, FL · Member since 2018 · 22 posts · 18 votes
    7y

    @Shane Clevenger

    I have been investing with MIGSIF fund and it has a cross collateral for the added safety along with different markets and different type of properties - it also is s debt fund which I prefer because I get 8% with no Mgmt fees, no acquisition fees, no disposition fees and finally it is liquid because they have a mix of commercial mix use that cash flows reliably and they have luxury rehabs in best markets in the US

    The principal and fund manager teaches and involves his investors which is incredibly beneficial

    Good luck

    0Reply
  • Jennifer Merrick
    Member since 2018 · 2 posts · 24 votes
    7y

    @Mark Welp - I just purchased 'Become Your Own Banker'.  What an eye-opener!  Thank you for the recommendation.  I was ambivalent about insurance sales, but it has real value when viewed from this perspective.

    3Reply
  • John Nachtigall
    Santa Rosa, CA · Member since 2017 · 325 posts · 701 votes
    7y
    Originally posted by @Jorge Torres:

    @Reid Mathews

    Best Real estate Fund I have found and invested in is called MIGSIF and they offer a cross collateral against all their assets, (SAFETY), 

    I think cross colaterilzation is less safe.   That is how you lose the entire portfolio.   If the dominos start to fall you can’t stop them and you lose everything.   There is no  legal stop.   So if they can’t recover money from the 1st property they go after the 2nd and then they are short so after the 3rd and so on.  See savings ans loan crisis in 80s, 2008 crisis, etc.   Why do you think cross colaterlization is safer?

    0Reply
  • Steven Jenner
    Member since 2018 · 1 post · 1 vote
    7y
    @Reid Mathews I too have listened to Grant Cardone quite a bit myself over the last year. And from all I am getting from different people is they have had great success! Apparently he runs Cardone Capital in a very Ethical and Responsible manner!
    1Reply
  • Mark Welp
    Investor/Agent/CPA · Columbus, OH · Member since 2015 · 249 posts · 207 votes
    7y
    @Jennifer Merrick Yes it was a life changer for me. Let me know if you have any questions about it. I am surprised that no one has really mentioned it on the podcast. Thx!
    0Reply
  • Philip McCleary
    Rental Property Investor · Houston, TX · Member since 2018 · 44 posts · 31 votes
    7y
    Originally posted by @Andrew Gingerich:

    I don't know a thing about Grant's funds. But what I am reading here is you get 6% return. Personally, I would take my investment and go buy a REIT mutual fund. Vanguards REIT has returned 10+% annualized since 1996. It's closed to new investors but there are many other good ones out there. 6% isn't enough for me to get excited. If you like real estate and are ready to settle for 6% I'd suggest going for the REIT and getting 10%.

    I think most buy and hold RE investors are looking for cash on cash returns north of 10% and total unrealized /realized returns, with appreciation of leveraged assets, tenant principal pay down, and monthly cash returns north of 20%. At least that's what attracts me to real estate, not following some famous dude for 6%.  

    I’m not in grants deals but what I have seen is he starts at 6% but his goal is to get the return up to 15% so he can plan for his exit. Also, when you exit the deal you get a proportionate amount of the profits so you get cashflow every month and your capital investment or a % of it back. On paper it sounds good, however, I have no actual knowledge of the deals

    1Reply
  • Jess White
    Rental Property Investor · San Jose, CA · Member since 2018 · 152 posts · 159 votes
    7y
    @Jay Hinrichs Hi Jay. it seems like every time I see your name come up, you mention not buying cash flowing real estate. To say most people are better off buying REIT’s is silly. Theres nothing wrong with that thought, I just find it interesting that you really don’t like rentals. The majority of people on BP are here because they want, or are already Real Estate Investors in income producing Rental Property. These readers arent like the mindless masses. Funds and REIT’s to me are hardly different than stocks and don’t offer myself near the benefit. The “headache” of owning tangible income producing real estate is forgotten with the right systems in place. Never create yourself another job, create a fortune.
    2Reply
  • CP Chou
    Real Estate Agent · Austin, TX · Member since 2008 · 58 posts · 26 votes
    7y

    @Reid Mathews Kudos to your curiosity for REI and not letting your domain expertise limit your learning. Of course ignore the unnecessary noise from certain folks!

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Jess White:
    @Jay Hinrichs Hi Jay. it seems like every time I see your name come up, you mention not buying cash flowing real estate. To say most people are better off buying REIT’s is silly. Theres nothing wrong with that thought, I just find it interesting that you really don’t like rentals.

    The majority of people on BP are here because they want, or are already Real Estate Investors in income producing Rental Property. These readers arent like the mindless masses. Funds and REIT's to me are hardly different than stocks and don't offer myself near the benefit.

    The “headache” of owning tangible income producing real estate is forgotten with the right systems in place. Never create yourself another job, create a fortune.

     well i think you misunderstand my position.. rental game is fine and i understand that most that is what they can do given the way our financial system is here in the US.

    My caution is for those thinking they can buy rentals in high risk areas and think they are going to have some great financial freedom.

    the issue being is most never get past one 2 or 3 rentals. and with out signficant scale then yes i think there are better investments than rentals at that small scale. and or certianly less risk.. but I firmly understand i am in the minority thought process here on BP.. :) 

    So for someone with 20 to 30k I see being profesionally managed interest in a reit as far less risk than buying a low end rental half awya across the US..

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  • Richard Sherman
    Rental Property Investor · Salem, OR · Member since 2017 · 696 posts · 660 votes
    7y

    @Jay Hinrichs but would they be better using it as a downpayment on a nice 4 plex owner occupied 1 unit near where they live....haha...  Devil really is in the details.  

    I agree that for many people, they think they are the first one to figure out that D areas of (insert several midwestern cities) pay 12 caps...and that they are going there and going to scale...those rates are there for a reason...no one buys them, even people who live there don't want them.   Doable and easy are two very different things and I firmly believe that most people getting started are best off, even in an expensive market, doing some kind of a small multi-unit live in rental to cut their teeth.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Richard Sherman:

    @Jay Hinrichs but would they be better using it as a downpayment on a nice 4 plex owner occupied 1 unit near where they live....haha...  Devil really is in the details.  

    I agree that for many people, they think they are the first one to figure out that D areas of (insert several midwestern cities) pay 12 caps...and that they are going there and going to scale...those rates are there for a reason...no one buys them, even people who live there don't want them.   Doable and easy are two very different things and I firmly believe that most people getting started are best off, even in an expensive market, doing some kind of a small multi-unit live in rental to cut their teeth.

    100% agree I feel that most folks when starting house hacking a 4 plex if they can handle living with their tennats is the absolute best way to start in real estate.. FHA loan best rates and live for free or near free.

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    2Reply
  • Taylor Smith
    Rental Property Investor · Seattle, WA · Member since 2018 · 51 posts · 9 votes
    7y
    @Reid Mathews so do you understand the infinite banking concept?
    1Reply
  • Jon Allen
    Rental Property Investor · Bloomington, IL · Member since 2018 · 55 posts · 90 votes
    7y

    @Andrew Gingerich 6% is the preferred return. Above that there’s a split with the manager. But it’s still not something I’d be interested in.

    0Reply
  • David Campbell
    Investor · San Diego, CA · Member since 2017 · 190 posts · 117 votes
    7y

    He is guaranteeing 5% annual return. I like Grant a lot, but I think other members on this forum would be able to beat those numbers.

    0Reply
  • Cliff Graham
    Rental Property Investor · Jacksonville / Neptune Beach, FL · Member since 2015 · 14 posts · 5 votes
    7y

    @Reid Mathews

    Just know people and understand that pride and arrogance comes just before the fall.

    0Reply
  • Paul B.
    Rental Property Investor · Dallas, TX · Member since 2015 · 503 posts · 504 votes
    7y
    Originally posted by @David Campbell:

    He is guaranteeing 5% annual return. I like Grant a lot, but I think other members on this forum would be able to beat those numbers.

     Guaranteeing? No way is that "g" word anywhere in the documents. I mean, I haven't read them, but nobody above-board ever guarantees anything. Unless you are saying that if the investment fails he is still going to make his investors whole, plus 5% annually? Nobody is dumb enough to offer that. Now, if there is a preferred return of 5 or 6% (I have seen others say 6), then that means you make 6% before he gets his cut. If the investment doesn't make enough money to pay you 6% then you get whatever is available, but that's different from a guarantee. 

    2Reply
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