What Is Cardone Capital by Grant Cardone?

Have you stumbled across Cardone Capital but have no idea what it is all about?

If you have been performing searches on the internet that have to do with real estate investments, you have likely seen an ad from Grant Cardone.

So, you may be wondering what he does and why you should invest in Cardone Capital.

In this article, I will be providing you with an overview of what the firm does to enable you to decide whether you should invest in it.

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Table of Contents

What is Cardone Capital?

Cardone Capital is a private equity firm that was launched by Grant Cardone. It is effectively a crowdfunding platform that enables accredited and non-accredited investors to venture into real estate.

Speaking of real estate, you should read my review of Robert Kiyosaki’s book on the subject, The Lazy Way to Invest in Real Estate.

Cardone Capital Review

When you hear about investing real estate, you probably think of the conventional avenues of investing like Real Estate Investment Funds (REITs), flipping houses, becoming a landlord, or buying up shares of a construction company.

But there is an alternative way to getting real estate cover in your portfolio; private equity companies.

Grant started Cardone Capital to give retail investors an alternative way of investing in the sector. It is not publicly traded (since it is a private firm) and it doesn’t suit the description of a Master Limited Partnership.

How does Cardone Capital work?

If it is neither of those things, how can we describe Cardone Capital’s business model?

The company raises capital to invest in real estate through private equity funds.

These funds are divided into “units,” which the investors buy and, in doing so, provide the firm with the resources to buy the property. Sometimes, Cardone can leverage the investment by taking on debt.

They usually buy multi-family houses with hundreds of units or multiple buildings and locations depending on the availability of cash.

The company then manages the properties, taking care of maintenance and overhead costs. It collects rent and distributes the proceeds to the investors.

The funds are designed to last for 10-years. The downside is that they don’t have a secondary market to allow investors to exit their investments earlier than that.

Who is Grant Cardone?

Grant Cardone is one of the most polarizing figures in the world of investing. I rate his work and have been following him for the past few years now.

He has over 30 years of experience as a professional investor, with a good chunk of it spent in the real estate business.

Grant is the CEO of Cardone Capital, the crown jewel of his empire with assets under management surpassing $1 billion. It may come as a surprise but Grant ventured into real estate as a side hustle before it quickly became his number one source of income.

Cardon isn’t just an investor; he is also a sales trainer. He owns a company called Cardone Training Technologies that provides interactive sales training to corporate entities. As long as there is a sales aspect to your business, you can call him up.

As a man who has had such a long professional life, it makes sense that he has written and published books documenting his experiences while advising his protégés. His two most popular ones are The 10X Rule and If You’re Not First, You’re Last.

The former has spanned the 10X Income System, a business training program that is geared towards helping entrepreneurs grow their ventures. It also teaches ordinary people to tap into additional sources of passive income.

Although Cardone has an accounting degree, he has repeatedly stated that he is not a big fan of college.

How to invest in Cardone Capital

Cardone Capital has a few funds through which the firm raises money to invest in property. If you want to invest in the fund, you need to meet a few criteria. Let’s take a look:

The Base Requirements All Investors Need

The base requirements you need to meet to invest in a Cardone capital fund are:

You should be over the age of 18 years and have both a US bank account and a US Tax ID.
You have to be an accredited investor to invest in some funds. If you are not accredited, you can delve into separate non-accredited funds.
If you are not a US citizen, you will also be allowed to invest if you meet the first two requirements applying to citizens.

What kinds of accounts are allowed?

To invest in the funds, you need to have a personal investment account. If you don’t have one, you can use a joint account or an entity account.

If you plan to use an entity account, it should be a Limited Partnership, a Trust, a Limited Liability Company, a C corporation, or an S Corporation.

What are the limits to the amounts you can invest in?

There are limits to the amount of money you can spend on a Cardone Capital fund. There are the minimum and maximum limits you have to adhere to.

First, if you are not an accredited investor, the minimum amount you need to invest is $5,000. The maximum amount they will allow you to invest is 10% of your income or your net worth (whichever of the two is greater).

Those limits prevent you from overindulging while ensuring that only serious people invest.

If you are an accredited investor, the minimum investment they will allow is $100,000.

The Fee Structure

There is a fee attached to each investment you make:

Acquisition fee: 1% of the property price.
Disposition fee: 1% of the selling price of the property.
Asset management fee: 1% of the annualized capital contribution.

I should mention that this is the fee structure as I write this review. These figures may change without warning and you should, therefore, check in with the website to confirm the rates if you are considering investing in Cardone capital funds.

The Offering Circular also has all the information you may need regarding this.

The Monthly payments you receive

Every month, you will receive a share of the profits generated by the properties under your fund.

The amount you receive will depend on the income. Usually, once the figures are internalized, they split the money 65/35 with that 65% going to the investors.

Cardone Capital Conclusion

Cardone Capital offers investors a different avenue of real estate investing to the conventional ones. It provides them with a steady stream of income without requiring them to deal with the challenges associated with acquiring and running the property.

Besides, multifamily residential housing, which Cardone specializes in, is a low-risk asset class.

Since Cardone has a good track record in multi-family housing, you should consider giving it a try if you are looking to entrust your money to someone with the experience. The multifamily housing niche is also on high demand and has done well even in adverse economic climates.

That said, the fees are relatively high and the lack of a secondary market for the funds means that you cannot exit early.

If you intend to invest in Cardone Capital funds, ensure that you fully understand the terms of the deal first to avoid problems later on. For example, some deals can run longer than the stipulated time depending on the situation – they usually indicate this on the circular.

Before you go…