Investment Choices: Cardone Capital vs Self Storage

15 Replies

I have $25000 available from my SOLO 401k to invest in RE. Would you invest in Cardone capital or would you invest in self storage syndication. Cardone Capital invests in multi apartment complexes with Grant Cardone as the big guru. The consideration is which is more resilient to a downturn in the economy.

Thank you very much!

Carlos Suárez

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Yes, there's not enough info (specifics about each investment and the syndicators) but generally speaking, self storage as an asset class is more resilient than multi-family when the economy as a whole heads south. 

with cardone, you are paying for his name, "reputation", "image", and his marketing

other GP groups don't have that overhead to pay

just my opinion...

@Michael Wagner I had not heard that before about self storage. Do you have any resources you'd recommend to learn more about this asset class and why that is the case?

@Carlos Suarez If you are considering a syndication I'd suggest not limiting yourself to Grant Cardone and comparing different syndicators who are working on the types of deals you would be interested in. There are tons of people you can find here on BP that you can compare.

I'll PM you Alyssa.

Originally posted by @Allyssa McCleery :

@Michael Wagner I had not heard that before about self storage. Do you have any resources you'd recommend to learn more about this asset class and why that is the case?

@Carlos Suarez If you are considering a syndication I'd suggest not limiting yourself to Grant Cardone and comparing different syndicators who are working on the types of deals you would be interested in. There are tons of people you can find here on BP that you can compare.

@Carlos Suarez I would not put all my eggs in one basket and split it up. For example,

$100K with Cardone or any other syndicator.

$100K in Self Storage.

$50K in Mobile Housing (or any other type of investment)

Best of luck!

@Carlos Suarez between those two choices, I would be compelled to invest in self storage. However, you need to make sure you're investing with a reputable and experienced operator. 

Grant buys class A assets and doesn't seem to have a great plan for the recession when it hits. His funds pay less than most syndicators can pay today because he has a huge brand and can raise capital at lower returns.

Background, I invest actively and passively in multifamily, and passively in self storage. Happy to discuss further offline just send me a connect.

Choosing the right offering to invest in is a lot more complicated than selecting GC or SS.  You will want to share your goals and the terms of the SS offering (and the sponsor) for us to help answer your question.

I recommend analyzing 50 offerings and talking with many sponsors.  It builds knowledge and will help define your criteria.  Otherwise, you should flip a coin.

Originally posted by @Oleg Shalumov :

@Carlos Suarez I would not put all my eggs in one basket and split it up. For example,

$100K with Cardone or any other syndicator.

$100K in Self Storage.

$50K in Mobile Housing (or any other type of investment)

Best of luck!

in less it was a typo he said he had 25k not 250k 

Agree with @Oleg Shalumov .  Don't put all your eggs in one basket if you are looking to stay passive.  You would benefit by talking with @David Thompson who is diversified and established in multiple types  of commercial RE syndications.  Best of luck!

Thanks Brandon.

Carlos,

25 years of data suggest that MHPs are most resilient to downturns. In 2009, only asset class in CRE that did not drop in NOI growth. Second would be self storage as long as you are not in a market that is over supplied. Value add class B MF properties hold up well too. Class A vulnerable, office, retail, sectors to tread carefully in an extended market. The future demographic, economic and life style trends continue to favor these niches as well. Here's a blog on niches for downside protection and why we stay here for now.

https://www.biggerpockets.com/member-blogs/9145/74876-growth-with-downside-protection-3-all-weather-niches-to-invest-in

Hey Carlos!

It looks like you're taking a vote...I vote Self Storage, absolutely!

And for $25k there is opportunity, not necessarily to take one down by yourself but to buy into a syndication or as a minority partner.  And if it is as the thread suggests perhaps $250k, there's a lot more opportunity. 

Good luck!

@Carlos Suarez

I would not invest money from a solo 401k into a syndication because there is no tax benefit as most disbursements are not taxable because of depreciation being passed on although I have not looked into Cardone capital too much. Personally a guy that spends so much time selling the type of returns he is talking does not need to sell and others I know who have did not get anywhere near that return. What is your goal exactly with the money? If it's

asset preservation versus growth I think a fund versus individual syndication is a better option because its 401k money and also because you have diversification of investing in multiple

assets. Investing in multi versus storage really depends on the execution not as much the class itself.

@Carlos Suarez

As many pointed out here, you have a lot of choices. Things to keep in mind when considering: tax aspects benefits, length of the investment, tax treatment. 

You choices will include but not limited to:

1) debt investments, e.g., lending 

2) equity investments, e.g. syndication. You may decide to invest  in storage, MHP, or MFH. The choice is yours but do your homework first.

When making your decision, evaluate all of the options above and then only take action!

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