Cardone Capital...anyone looked into this?

133 Replies

Cardone knows how to make money for himself.  He built a cult like following and a lot of excitement around his brand that people are willing to take smaller returns to be in his deals.  There are plenty of other syndicators out there offering better returns then him.  Do your due diligence. 

I’ve been very happy with CC. After looking at other investments on my own I decided to add to my position with Grant and Ryan.  I’ve continued to receive excellent returns on Fund II.  I invested in fund IV last fall and the return is lower, but it’s a brand new property.  Overall I’d highly recommend CC. 

Originally posted by @Brad Park :

I’ve been very happy with CC. After looking at other investments on my own I decided to add to my position with Grant and Ryan.  I’ve continued to receive excellent returns on Fund II.  I invested in fund IV last fall and the return is lower, but it’s a brand new property.  Overall I’d highly recommend CC. 

Brad...could you share some of the preferred equity returns you are seeing on the funds? Also, what hold times are expected on those investments? I’ve been considering other private equity investments myself as a way to diversify my own investments.

Grant is speaking in London UK in a few weeks. I will be attending. Let's see if he shares much. This event is a 2-day event where a number of people I know are speaking or attending. Grant is just one of the speakers.

I am thinking about taking a flyer on Cardone Capital Equity V with a small investment. I like his videos and podcasts about real estate. Seems to be focused on Class A, large properties that could be acquired by REIT's and PE funds. He boasts of a long track record.

The fund holding period is 10 years, so it requires a long-term commitment. This is different from many of the syndications I've seen, where the sponsor tries to give your money back within 5 years.

I am in some syndication deals but due to not being accredited, I don't see many opportunities to invest in Houston, Atlanta, Florida and other areas that GC invests in.

Originally posted by @Nate Reed :

I am thinking about taking a flyer on Cardone Capital Equity V with a small investment. I like his videos and podcasts about real estate. Seems to be focused on Class A, large properties that could be acquired by REIT's and PE funds. He boasts of a long track record.

The fund holding period is 10 years, so it requires a long-term commitment. This is different from many of the syndications I've seen, where the sponsor tries to give your money back within 5 years.

I am in some syndication deals but due to not being accredited, I don't see many opportunities to invest in Houston, Atlanta, Florida and other areas that GC invests in.

Nate, I was just looking up the definition for Accredited Investor. I found the following statement interesting. As it is from Investopedia, I am not sure if the SEC has precisely the same definition. "Also, if a person can demonstrate sufficient education or job experience showing his professional knowledge of unregistered securities, he too can qualify to be considered an accredited investor."

My experience with the concept is more centered around the UK and the FCA (UK's equivalent to the SEC). The FCA definitely has a way for an investor to demonstrated that they are a Sophisticated Investor (UK's label for accredited) if the investor has been active with unregistered securities. 

I wonder what the path is for the SEC and USA opportunities. X deals or Y training?

Originally posted by @John Corey :
Originally posted by @Nate Reed:

I am thinking about taking a flyer on Cardone Capital Equity V with a small investment. I like his videos and podcasts about real estate. Seems to be focused on Class A, large properties that could be acquired by REIT's and PE funds. He boasts of a long track record.

The fund holding period is 10 years, so it requires a long-term commitment. This is different from many of the syndications I've seen, where the sponsor tries to give your money back within 5 years.

I am in some syndication deals but due to not being accredited, I don't see many opportunities to invest in Houston, Atlanta, Florida and other areas that GC invests in.

Nate, I was just looking up the definition for Accredited Investor. I found the following statement interesting. As it is from Investopedia, I am not sure if the SEC has precisely the same definition. "Also, if a person can demonstrate sufficient education or job experience showing his professional knowledge of unregistered securities, he too can qualify to be considered an accredited investor."

My experience with the concept is more centered around the UK and the FCA (UK's equivalent to the SEC). The FCA definitely has a way for an investor to demonstrated that they are a Sophisticated Investor (UK's label for accredited) if the investor has been active with unregistered securities. 

I wonder what the path is for the SEC and USA opportunities. X deals or Y training?

Hi John, there is a specific legal definition of "Accredited Investor" in the US. It defines a minimum net worth or income that investors must meet.

There is a different category called "Sophisticated" for investors with knowledge and experience. I am in the Sophisticated category due to education/training I received from an investor group, and experience as an investor.

Whether a sponsor accepts Accredited, Sophisticated or anyone depends on the offering type. There are a lot of rules about the various offering types and investor accreditation to "protect" investors from fraud or making unsuitable investments.

The JOBS Act is making it easier for companies to raise money from the public and imposes minimal requirements for suitability. Cardone's crowdfunded fund is open to all categories of investors, but the aggregate sales to an individual investor who is not accredited cannot exceed 10% of his/her net worth or income. 

Thanks, Nate.

On the 10% threshold, the UK uses the same figure.

What I do not understand is how any sponsor or platform will know what 10% of my net worth is. Self-reporting is fine. Just not very accurate. I assume they want something there and the party making the offer has to do some simple algebra to check what I said I am worth vs what I invested with them.

Originally posted by @Jade S. :
Originally posted by @Meghan McCallum:

I was in his mentorship program last year. I paid attention. If anyone is thinking about investing w GC passively...you just need some better exposure to deals. I have a large number of friends and high level business partners that would NEVER go a quarter without an investor update. A conscientious operator will often give monthly updates...even if its just pics, plans, or promises. It's an investors kind of HGTV...we want to see our beautification. It also help comfort people. If I took 100K off your hands wouldn't you be just slightly uncomfortable...just a little? 

It seems like he let his plan slip and another friend of mine who is syndicator caught it too. He bought a property with HIS cash then sold it for a $25M premium to his investors. He DID not disclose this...when I realized what he did...and yes...gave 7% with his 35/65 split I was floored. 

He broke his word throughout the program, when things would fail he'd laugh it off and make another rule like, "No Negativity". Well, that good and all...but...then anyone who expresses any discord with his message he'd put down. Never engaged in conversation. Controlled every second he could. It was sad that by day two of his conference I realized that he had been near me so many times and I didn't care to turn around. 

His conference did have value...but not in his conference, or message, or investment ploys.

The people that follow him are passionate! Many have become great friends of mine. But, if you love being sold constantly, then being high pressured into EVERYTHING. 

After studying him it was often that I saw him do and say things that lead me to seeing that he has a scarcity mindset. The same for the guys who talks about all the units he controls (when its really a company you work for...owned by a number of people you've never met). 

We are about to see a **** show in multifamily investing. I know people who are COACHING syndications and have never done one. They are speaking at conferences. People are also investing in their projects. 

Grant is opening up his investments to non-accredited investors because (I'm hoping) the accredited AND sophisticated investors are the ones are walking away. People trust what they know. But, the trend is personalization, connection, and balance. This is where business is going in the next 3-5 years. If you are looking to invest, find someone who will allow you to get to know them, who communicates with you (I raised a measly $45k and the borrower was instructed to give us monthly reports because we know what our investors want, he almost ruined the relationship when he didn't follow through and raised his voice at me telling me that my investors don't know what he knows). My investors are normally other real estate investors who want a better deal, with better treatment, cause no one should be reduced to being a faceless number unless they want to be. Some syndicators are inviting the investors to learn along their investment.

Moral of the story, take your time finding the right operator. The right team can raise a diamond from the dirt, a **** team could ruin Rodeo Drive. 

Note the factual number of posts removed. Most likely inappropriate, but NUMEROUS. That's not normally a good sign. Maybe, just maybe...they were expressing...negativity?

Unless you like NLP being used on you.

 Interesting perspective, Meghan.  Although I have felt that the equity return on investment from GC’s offerings seemed a bit more “thin” compared to several deals I’ve been looking at via my wealth advisor, the angle of basically selling an investment he had to investors at a large premium is rather interesting! Opening up to non accredited investors is another interesting move.  He makes it sound like he is “helping the average Joe” get into deals previously only available to accredited investors, and I think that could have resonance with many who want to get into multi family investing.  After all...it’s the “sexy” asset class everyone wants, yes? (Another reason I have moved into investing in flex industrial properties)

 Flex-industrial eh? Please, do tell more.

Originally posted by @Nate Reed :

I am thinking about taking a flyer on Cardone Capital Equity V with a small investment. I like his videos and podcasts about real estate. Seems to be focused on Class A, large properties that could be acquired by REIT's and PE funds. He boasts of a long track record.

The fund holding period is 10 years, so it requires a long-term commitment. This is different from many of the syndications I've seen, where the sponsor tries to give your money back within 5 years.

I am in some syndication deals but due to not being accredited, I don't see many opportunities to invest in Houston, Atlanta, Florida and other areas that GC invests in.

 Please do keep us posted. The idea of him letting in non-accredited investors is very telling. If the DEAL is good enough, you wouldn't need non-accredited investors. The requisite funds would be swiftly raised from accredited investors if the deal is good. Same goes for needing a massive brand and marketing campaign. I was debating throwing in $25K, but his PPM has classic red flags/stay away when I read one of the earlier funds' PPM 1 year ago.

Grants job is and he'll tell you this, "promote, promote, promote" and he can structure how he wants because of the following.

There are operators out there offering better terms. At the end of the day, you invest with who you feel comfortable with. The details come after the fact. 

Great points by @Omar Khan & @Ivan Barratt

Originally posted by @Lance Bloggs :

Grant is speaking in London UK in a few weeks. I will be attending. Let's see if he shares much. This event is a 2-day event where a number of people I know are speaking or attending. Grant is just one of the speakers.

 How was Grant's talk?

Originally posted by @Andrey Y. :
Originally posted by @Jade S.:
Originally posted by @Meghan McCallum:

I was in his mentorship program last year. I paid attention. If anyone is thinking about investing w GC passively...you just need some better exposure to deals. I have a large number of friends and high level business partners that would NEVER go a quarter without an investor update. A conscientious operator will often give monthly updates...even if its just pics, plans, or promises. It's an investors kind of HGTV...we want to see our beautification. It also help comfort people. If I took 100K off your hands wouldn't you be just slightly uncomfortable...just a little? 

It seems like he let his plan slip and another friend of mine who is syndicator caught it too. He bought a property with HIS cash then sold it for a $25M premium to his investors. He DID not disclose this...when I realized what he did...and yes...gave 7% with his 35/65 split I was floored. 

He broke his word throughout the program, when things would fail he'd laugh it off and make another rule like, "No Negativity". Well, that good and all...but...then anyone who expresses any discord with his message he'd put down. Never engaged in conversation. Controlled every second he could. It was sad that by day two of his conference I realized that he had been near me so many times and I didn't care to turn around. 

His conference did have value...but not in his conference, or message, or investment ploys.

The people that follow him are passionate! Many have become great friends of mine. But, if you love being sold constantly, then being high pressured into EVERYTHING. 

After studying him it was often that I saw him do and say things that lead me to seeing that he has a scarcity mindset. The same for the guys who talks about all the units he controls (when its really a company you work for...owned by a number of people you've never met). 

We are about to see a **** show in multifamily investing. I know people who are COACHING syndications and have never done one. They are speaking at conferences. People are also investing in their projects. 

Grant is opening up his investments to non-accredited investors because (I'm hoping) the accredited AND sophisticated investors are the ones are walking away. People trust what they know. But, the trend is personalization, connection, and balance. This is where business is going in the next 3-5 years. If you are looking to invest, find someone who will allow you to get to know them, who communicates with you (I raised a measly $45k and the borrower was instructed to give us monthly reports because we know what our investors want, he almost ruined the relationship when he didn't follow through and raised his voice at me telling me that my investors don't know what he knows). My investors are normally other real estate investors who want a better deal, with better treatment, cause no one should be reduced to being a faceless number unless they want to be. Some syndicators are inviting the investors to learn along their investment.

Moral of the story, take your time finding the right operator. The right team can raise a diamond from the dirt, a **** team could ruin Rodeo Drive. 

Note the factual number of posts removed. Most likely inappropriate, but NUMEROUS. That's not normally a good sign. Maybe, just maybe...they were expressing...negativity?

Unless you like NLP being used on you.

 Interesting perspective, Meghan.  Although I have felt that the equity return on investment from GC’s offerings seemed a bit more “thin” compared to several deals I’ve been looking at via my wealth advisor, the angle of basically selling an investment he had to investors at a large premium is rather interesting! Opening up to non accredited investors is another interesting move.  He makes it sound like he is “helping the average Joe” get into deals previously only available to accredited investors, and I think that could have resonance with many who want to get into multi family investing.  After all...it’s the “sexy” asset class everyone wants, yes? (Another reason I have moved into investing in flex industrial properties)

What would you like to know, @Andrey Y? The flex industrial property I acquired was an off market deal through a SIOR commercial broker in a growing, mid-sized city in the Southeast. Flex industrial product has been in good demand in this area, and there hasn't been much available. My tenants are on NNN leases, with a current CoC of ~ 8% (IRR ~ 16-18%). In the process of replacing one business tenant with another over the summer, which will bring the CoC up to around 9.5%.

Originally posted by @Andrey Y. :
Originally posted by @Nate Reed:

I am thinking about taking a flyer on Cardone Capital Equity V with a small investment. I like his videos and podcasts about real estate. Seems to be focused on Class A, large properties that could be acquired by REIT's and PE funds. He boasts of a long track record.

The fund holding period is 10 years, so it requires a long-term commitment. This is different from many of the syndications I've seen, where the sponsor tries to give your money back within 5 years.

I am in some syndication deals but due to not being accredited, I don't see many opportunities to invest in Houston, Atlanta, Florida and other areas that GC invests in.

 Please do keep us posted. The idea of him letting in non-accredited investors is very telling. If the DEAL is good enough, you wouldn't need non-accredited investors. The requisite funds would be swiftly raised from accredited investors if the deal is good. Same goes for needing a massive brand and marketing campaign. I was debating throwing in $25K, but his PPM has classic red flags/stay away when I read one of the earlier funds' PPM 1 year ago.

Not promoting GC here but what's wrong with opening up a legitimate investing vehicle for non-accredited investors. I'm assuming you haven't raised sizable pools of capital before but even accredited investors don't fall from the sky wanting to throw their money at each and every "good" deal. Sizable sponsors with decades long track record still have to slog it out to raise money (albeit with less pain than others). 

Do agree on the red flags part. If it walks like a duck and quacks like a duck.... 

@James D. I've only listened to GC's podcast and never looked at his PPM or related material for deals so I can't speak in-depth about his business plan and execution on deals. I will say his fees and percentage of ownership in his deals are higher than most sponsors. As people alluded to earlier he's able to do this because of his cult following and everyone wanting to invest in one of his deals.   

To address your question about losing money, yes you have the potential to lose money in any real estate transaction. One of the things that concerns me is that he speaks about paying asking or over asking to get the deal because prices always rise. I pray he is speaking in hyperbole and is actually doing due diligence on his deals because when the market corrects he could find himself in trouble. For his sake and his investors sake I hope he doesn't lose money, but even if he does or provides a return significantly less than promised he will still have a stable of investors waiting for his next deal.

You mentioned he promotes a 2X equity multiple over a 10 year hold. In many investment circles that is considered a low return. There are a lot of deals that can 2X your money in 5 years. There is a risk/reward component that you will need to get comfortable with and determine where you are on the risk profile. Typically, class A/core/core plus assets will have a lower return than class B or C assets, but this isn't always the case.

I would also recommend you become familiar with the different asset classes. Many people say they will never invest in A class because if a recession comes they are affected the most. In the last 10 years A class assets have done well with less headaches than B or C class properties. I've invested in A through C class assets and they all bring different challenges to the table. 

I've heard GC on several podcasts. Here are my thoughts:

-You can tell he's a great speaker. He was a sales trainer (and a good one) before getting into capital. The guy never has a filler word, he's engaging and for sure entertaining.

-None of these qualities mean he puts together deals you should invest in. As others in this thread have referenced, his returns are far lower than other sponsors as is the portion of the deal that goes to investors.

-I promised myself I'd never invest with him when he said this on a podcast: "I know I'm going to invest in a deal before I even run the numbers." Wrong. Running numbers should have you running away from deals, not ignoring the numbers to still get the deal done.

You can learn a lot by listening, but you can also start to tell he does a LOT of things that no one should ever do, and makes up for it by having huge volume. 

Ashcroft is like this too....HUGE marketing arm, deals (especially recent ones) aren't all that attractive.

Cardone Capital is a good safe investment. Obviously he has the name so that helps. It depends on your goals as an investor and if you're sophisticated, accredited or not in my opinion. 

I'll be interviewing him in the next couple of months.  On a recent podcast he had found some problems with a roof and was asking for 3 million in concessions.   He knows if he's even going to invest in it before he sees the numbers because he walks the product and studies the **** out of the locations demographics.  You can go to youtube and find him walking complexes at night asking the tenants questions.  Most of these flybynightsydicators never even visit the property.  I recently busted one that i interviewed a few months back paying 10k to get on a fake magazine.  I had to go back and edit my interview because now he's getting sued 8 ways from Sunday.  You'll never have that problem with Grant.

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