Cardone Capital

LifeCoMoney's picture
Rank: Baboon | 123

Has anyone here invested in any of Cardone Capital's active/past funds (https://cardonecapital.com/investments/)? Looks like they have accredited and non-accredited funds.

Not really interested in it from an investment advice perspective - more so just curious as to whether he's getting close to the 15% IRR/2.5x multiple he's advertising.

I know there are plenty of opinions on him from an owner perspective, but he's reporting $1.3B+ AUM and a ton of units owned - no arguing that.

Also, have any developers/brokers/lenders out there closed a deal with them? How was it?

Comments (46)

Funniest
Oct 21, 2019

Also does he send all his emails in caps? He seems like someone that is friendly but definitely sends all caps emails.

Oct 21, 2019

It would be funny if that IRR/ EM were his own sponsor numbers after various promote structures

"The three most harmful addictions are heroin, carbohydrates, and a monthly salary." - Nassim Taleb

    • 1
Oct 21, 2019

That would be funny, but then I would be interested in investing in the GP vehicle....

Oct 21, 2019

He bought a killer deal from Gables in Austin for over $100m (way overpaid but that's neither here nor there), and by all accounts performed very well despite being a little huckter-ish.

    • 1
Oct 22, 2019

Can you elaborate on how he overpaid, but bought a killer deal? What accounts have you heard of that lead you to believe it performed very well? I'm super down to start advising on overpaying so long as i have a bullet proof plan to perform well....

Oct 22, 2019

The deal is fantastic real estate, but he overpaid for it. I know the broker, and his feedback was that they performed well, but that the guy is a douche (no surprise there...).

    • 1
Oct 22, 2019

I'll overpay all day if I have a crystal ball and can see that cap rates are compressing.

Anyone looks genius if cap rates drop from your purchase price and you added any value

Oct 21, 2019

If you start off your bio with

"...a New York Times bestselling author, the #1 sales trainer in the world, and an internationally renowned speaker on leadership..."

then there is no way that you're actually good at real estate.

    • 4
Oct 22, 2019

I've seen some exits recently where a bio of the sponsors and investors would be 'harvard educated, 24090 billion raised, 20498089 units owned and developed' that make you think 'you are not good at this...'

Oct 22, 2019

All of that is at least related to real estate though.

Oct 21, 2019

lol dude stay away from these guru types like Grant Cardone and Tai Lopez. I recently made a new instagram account and followed accounts such as goldman sachs, jp morgan, ray dalio, rolex, and soon my account got flooded with suggestions to all these fake gurus. Grant Cardone is a funny guy who has a lot of charisma but I know some high net worth individuals (30 million plus) and they are very private.

Oct 23, 2019

Grant Cardone is actually some what legit. He's out buying deals.

Funny story I heard a broker say he was out touring a garden deal on his instagram story and tenants were freaking out that there rents might be jacked up.

And on a side note I get YouTube pop ups of Tai Lopez touring grass land in bumfuck Pennsylvania as he makes prophetic statements such as "Real estate is the best asset class because they aren't making any more of it!" Then he speeds away on his rented Ferrari to his AirBnB mansion.

    • 3
Oct 23, 2019

lol dude right on,

Google Fraud Lopez's Linkedin for a good laugh at his resume. Dude is 100% not truthful about how he got capital.

Oct 24, 2019

This Tai Lopez behavior is why I am certain the cycle is ending soon.

    • 1
Oct 21, 2019

Not a broker/lender but another another acquisitions shop here.

We bid against him on a very solid deal in the Southern markets last year.

We underwrote aggressively and were still ~10% off whisper. Broker told us later that Grant paid over whisper for that deal...

I believe it traded ~4.5%. Excellent product but in an A- suburban location with tons of supply...seemed expensive at the time. Not sure how the property is performing now...

    • 1
Oct 22, 2019

Stay away, he overpays for deals, has unreasonable underwriting assumptions and the deal terms to his LP are very sponsor friendly. He has a lot of $50k checks from people who have no idea what they are investing in.

    • 2
Mar 23, 2020

$50K checks! That's why he is always pushing MF properties. Not within reach of these smaller investors, therefore, invest with me and we can do it together.

Can't knock am man for his hustle. While I stay away from these assertive salesman types. I haven't heard anyone say they lost money with him. At least not yet...

Most Helpful
Oct 22, 2019

I would not be shocked if at the end of the day his firm turns into a ponzi scheme. The guy is a rockstar salesman but has no intellectual prowess when it comes to evaluating real estate or finance. He is going to get hosed competing against the big boys unless he is hiring serious talent from the big boys and entrusting them to run acquisitions/capital markets.

    • 5
Oct 22, 2019
InVinoVeritas:

I would not be shocked if at the end of the day his firm turns into a ponzi scheme. The guy is a rockstar salesman but has no intellectual prowess when it comes to evaluating real estate or finance. He is going to get hosed competing against the big boys unless he is hiring serious talent from the big boys and entrusting them to run acquisitions/capital markets.

Didn't one of these types of guys just get paid like 1.7 billion or something? Alan, Andy.... something like that.

    • 2
Oct 22, 2019

I don't think he's stupid at all. He is probably making ridiculous amounts of money based off the structure with LPs?

Oct 22, 2019

100% agreed. groups like Cordone are fee driven so they will use 4-5% rent growth, higher leverage and lower caps to get 15-20%+ IRR to attract non-real estate types to fund their deals. the next 2-3 years might tell who is smart or dumb, until then, we are all spectators looking like idiots.

    • 1
Oct 22, 2019

Depends on the structure, most notably preferred return and who is responsible for capital calls. If he has no skin in the game or his co-invest is tiny and everything is pari passu, then he is totally hedged.

    • 1
Nov 2, 2019

Watch his video answers under the FAQ questions. Look at the way he frames answers, seems a little salsey and for the unaccredited investors investing it would be tricky to see what he's saying....

Like the one on risk, he says of course there's risk you can lose everything, but then basically says it's short of impossible to lose money. Or the one on how much money he has invested, he says it's 100% his money buying the deal, then whoever invests buys a portion, then it's it depends on the deal but he acts like "100%" of his own money.... some not straight forward answers there.

Link: https://cardonecapital.com/faq/#toggle-id-17

Oct 22, 2019

delete

Oct 22, 2019

I know someone that financed a deal for him. Their credit squad spent a lot of time proving out and reconciling his tax returns and PFS. He wrote a $35MM equity check from his checking account(s) to close the deal..... obviously will be recapped from his investors but madness nonetheless. Apparently, from what I've been told his 10x conferences are a low 8-figure net payday a piece. Say what you want - the dude has DOUGH.

Oct 22, 2019

Wow that's some serious net cash from conferences. I don't doubt at all that he is very wealthy I just look negatively upon this new wave of capital syndication coming into the multifamily space outright lying about what kind of returns they can hit. Every pro forma is wrong but it is fraudulent to venture outside the realm of probability.

    • 3
Oct 22, 2019

PAST RESULTS DO NOT GUARANTEE FUTURE PERFORMANCE

People are forgetting that you are recycling the same buildings with a value add story with less units left to renovate over and over. Eventually someone will get left holding the bag with lower returns than the last guy...

Oct 24, 2019
Merchant_of_Debt:

I know someone that financed a deal for him. Their credit squad spent a lot of time proving out and reconciling his tax returns and PFS. He wrote a $35MM equity check from his checking account(s) to close the deal..... obviously will be recapped from his investors but madness nonetheless. Apparently, from what I've been told his 10x conferences are a low 8-figure net payday a piece. Say what you want - the dude has DOUGH.

I have to call bullshit on this. First off, he's not making 10mm per conference, that is utterly absurd. I just looked at his pricing. The most expensive ticket is 2,500/seat. 4,000 people a conference seems... high. Especially since most suckers don't have 2,500 to blow.

Second, just because the man has $35mm sitting in a checking account doesn't mean that's the normal state of affairs. He may have pre-raised that money and is just keeping it in his personal checking account. Would that surprise anyone? No one keeps that much money doing nothing for them unless they're a complete fool, including people genuinely worth many multiples of Mr. Cardone.

The whole story smells very, very fishy to me.

    • 1
Oct 24, 2019

If that money in his checking was pulled from other accounts, that is textbook commingling of funds.

Feb 1, 2020

I'm doing research on this dude and everything seems to be built on hopes and dreams with a foundation of shit, to say the least. May 31st, 2018 Cardone capital reported total assets and liabilities of 18k. I don't know what the world is thinking but managing 18k doesn't permit you to manage a billion-dollar portfolio in a couple of months. Grant is a financial advisor that no one would hire. Imagine a doctor that's worthless, later building his hospital just so he can perform open-heart surgery. Just because he has access to money doesn't make him eligible to be a credible investor.

So if you are wondering well then how did he acquire all this money? I don't know if you understand how informational products work. Well, this guy is a master salesman. He can disconnect you from the value of money and make you give it to him. He tours around the globe doing these seminars that sell you a dream. I would not be surprised if he makes 500k each talk. He sells 2k-10k programs. He only needs a minimum of 250 people to buy his low-end program per event.

Look I'm not saying that this guy doesn't have any money. I am saying that he is not the right person to be handling that type of investment. No one on Cardon Capital is eligible to be managing that type of cash. His pilot is registered as an account manager. Really? It takes years and years to be considered a master pilot but that does automatically make you a master investor where you take calculated economy risks. He is riding the high wave of the economy and the minute something skips a beat everything will easily crumble.

Think about it, his overhead has to be easily over a million a quarter. That bill is not being handled by investments but by selling his programs. His business has nothing concrete to hold on if the economy falls.

He is running on debt using cash to leverage the investments. Many will lose money on the bubble he is forming. Lately, he is promising returns through his fund on social media. That brings up red flags. I hope I'm wrong but I believe we are witnessing a huge Ponzi scheme taking place and I don't think Grant is educated enough to realize it.

    • 1
Mar 23, 2020

Oh how things have changed - reports of +/-50% headcount reduction about a week ago.

Anyone have insight?

  • Prospect in IB - Ind
Mar 23, 2020

Yeah there's a video on YouTube titled " grant Cardone will bankrupt Cardone Capital"

Mar 23, 2020

Watching it now. Interesting...

"Out the garage is how you end up in charge
It's how you end up in penthouses, end up in cars, it's how you
Start off a curb servin', end up a boss"

Mar 24, 2020

He started out as a used car salesmen and then realized the real money was selling training!

Mar 24, 2020
Comment
    • 1
Mar 24, 2020
Comment

"Out the garage is how you end up in charge
It's how you end up in penthouses, end up in cars, it's how you
Start off a curb servin', end up a boss"