Hey Folks...just curious if any of the accredited investors lurking on BP have looked into Cardone Capital. I see he touts this particular arm of his company quite a bit lately, offering preferred returns during the "hold" phase and returns on invested capital on the exit side with multi family acquisitions.
I was so curious I had to sign up. I figured it would put me on a mailing list forever, but what the heck
I saw the PPM for Reserve at Ormond Beach.
They offered 6% preferred and a 65/35 split for everything after on returns and full capital back then 65/35 during disposa fees 1% asset management, 1% acquisition, and 1% disposition.A basic deal on a crowdfunding site (like RealCrowd or CrowdStreet) is 8-10% preferred and 80/20 or 70/30 split. 3-5% fees? Also lower minimums on crowdfunding sites and more experienced general partners.
Other points
Overall, my opinion is that it is inferior to most any deal you will see on CrowdStreet or RealCrowd. I do watch his real estate show every Monday, he teaches basics of commercial investing. It is not bad, you just have to filter out the stupid stuff like "retail is dead" and "any other syndication is stealing your money" He says he has a large percentage invested in every deal but if I am reading the PPM right then he has exactly 0% invested once it is fully funded. He sold 8,330,000 million worth of shares and that is the full equity stack. But he teaches the basics like NOI for people just learning. And he is entertaining to be sure.
Hope that helps satisfy your curiosity.
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.
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?
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.
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.
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
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?
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%.
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....
@Nate R. How did it go for you? What did you decide on CC? I'd be concerned about Class A right now where we are in the cycle. But that's a generalization. Where is CC and team buying?
@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.
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.
Very well said.
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.
Even more of a reason you should re-consider investing in luxury, Class A investments at this time. Much less with less than favorable terms for the investors..
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....
This is inaccurate. A lot of the firms I invest in, when a new deal comes up, the folks who have already invested with them just fund it. It would even be hard for a new investor to get in. Not even talking about accepting non-accredited investors, which they don't.
I am okay with a new firm accepting non-accredited for their first 1 or 2 deals while they build an investor base. The best deals do have "accredited investors fall from the sky" they fill up 3 days after an email to existing investors :D
The deals I keep getting with non-accredited slots usually suck. And they usually have 3 or 4 additional capital raisers slogged on top of it, diluting returns even further. I won't sugarcoat this.
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.
The need has to do with the amount of money being raised, not the investor accreditation. Every syndicator has a base of investors that they can tap to fund deals, but to keep growing, they need to be able to reach new investors. That's why they partner with equity-raisers, advertise deals to the general public or offer them on crowdfunding platforms.
Certain types of SEC exemptions don't allow them to advertise to the public unless they are for accredited investors only, but for Reg A offerings they can.
Because it has become cheap to service a high volume of investors using technology, there are now more companies doing offerings with low minimums to non-accredited investors using these new regulations (like Cardone Capital, Fundrise, Realty Mogul, etc).
What pool of capital is larger: the pool of accredited investor money (what is that, 1% of the general population) or the general public's?
If he offered a preferred return for his non-accredited fund, I would be more likely to do it. I'm guessing the lawyers said he can't use complicated compensation structures like waterfalls.
I have relationships with sponsors that offer straightforward and relatively investor-friendly 80/20 splits (no preferred), so I choose to continue funding those kinds of deals. But I still haven't ruled out CC at some point. I appreciate the fact he's opened up his deals to the "small guy."
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....
This is inaccurate. A lot of the firms I invest in, when a new deal comes up, the folks who have already invested with them just fund it. It would even be hard for a new investor to get in. Not even talking about accepting non-accredited investors, which they don't.
I am okay with a new firm accepting non-accredited for their first 1 or 2 deals while they build an investor base. The best deals do have "accredited investors fall from the sky" they fill up 3 days after an email to existing investors :D
The deals I keep getting with non-accredited slots usually suck. And they usually have 3 or 4 additional capital raisers slogged on top of it, diluting returns even further. I won't sugarcoat this.
I agree with the sentiment of what you are saying but I think you might not have a good grasp on how these things work from a sponsor's perspective. Every single sponsor on the planet is trying to diversify their equity sources, even the ones that supposedly do not take money anymore like Baupost Group (Seth Klarman). This includes global behemoths like Blackstone and Apollo. While they may not accept your or my money (because it is too little), nonetheless, they, too, are actively expanding their equity sources (just at a very different level).
Not supporting CC here but till you haven't actually gone and raised $20M, $50M or even $100M (which only a handful of folks in the country can do easily), it's easy being a keyboard warrior and talking about technicalities.
It's very, very hard raising huge gobs of money. You have to fight for every dollar because money doesn't fall from the sky.
In other words, most big name sponsors aren't trying to buy a few SFR's or 1-2 multifamily properties per year. They have a pipeline in the hundreds of millions of dollars. Ain't easy filling that up.
P.S. Not saying I would invest in CC.