Cardone Capital Review: Grant Cardone Scam?

Cardone Capital Review: Grant Cardone Scam?

Today, we’re going to take a look at Cardone Capital. Can you make money on this platform? Let’s find out in this Cardone Capital review.

Real estate is considered to be one of the most recommended assets to invest in. Whether it’s a piece of land title, a farm lot, especially a housing lot, it’s already viable.

That’s because no matter what, the value of your real estate investment is always expected to go up as time passes. While its appreciation timeframe is slow compared to others, you can be ensured that it’s very stable, and rarely goes down.

Furthermore, there are plenty of ways in which one can earn a good amount of money in real estate. From buying a lot to add to their investment portfolio, to even “flipping” them.

Thus, it’s no wonder that some people, particularly investors, find the real estate industry quite attractive.

Nevertheless, getting started in the real estate industry can pose quite a challenge for most people. Just like any other investment method.

Cardone Capital, however, claims to be able to assist you with investing in real estate, even when you are low on funds.

But before you enroll in this online platform, you should read this Cardone Capital review first. And hopefully, this review will help you decide if this is worth your time and money, or not.

This is a completely neutral Cardone Capital review. And it’s all based on my honest opinion. I’m not affiliated with Cardone Capital or its personnel in any form.

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Cardone Capital: Quick Details

  • Name: Cardone Capital
  • Website: https://cardonecapital.com/
  • Type: Investment Platform
  • Niche: Real Estate
  • Owner: Grant Cardone
  • Investment Minimum: $5,000 to $100,000
  • Recommended?: Only if you’re interested in the idea of investing in a real estate crowdfunding platform. Otherwise, it’s much better if you try out other ways to earn money. The minimum investment needed is just too high for anyone.

What Is Cardone Capital?

Cardone Capital

Normally, when you want to invest in real estate, you have to buy the whole property by yourself, in full. Naturally, this would be extraordinarily expensive, especially given the value of real estate as of today.

Cardone Capital’s investment platform aims to make it a bit more manageable for most people.

It uses a real estate crowdfunding approach that allows an investor, or any number of investors, to invest in a property. And they can do so without the need of paying the full price of the real estate property in question.

Real estate crowdfunding is when you, and several other investors, invest in a single piece of real estate that’s offered by an entity. In Cardone Capital’s case, you and several others are basically investing your money on a multifamily property (aka an apartment, etc.) that Cardone Capital offers to you.

The main advantage of this is that you can add a piece of real estate to your investment portfolio. Even if you don’t have the huge amount of money needed to buy the property for yourself.

Cardone Capital also boasts an excellent satisfaction rate among investors, in that not once have they lost any money from their investments here. And the reason why their primary focus is on multifamily residentials is due to the fact these kinds of properties have historically proven to be one of the safest categories of real estate.

Cardone Capital Investments

And unlike most real estate crowdfunding platforms, Cardone Capital’s requirements for investing are rather low.

Keep in mind, however, that real estate investment still has a rather high entry barrier. Even though this is promoted as something that you can start with a “low capital”, not everyone can still afford the thousands of dollars needed for this investment.

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Cardone Capital Personnel

Grant Cardone is the founder of Cardone Capital. He also serves as its current CEO.

Cardone Capital - Grant Cardone

He is a well-known and highly-successful entrepreneur, as well as a sales trainer and a speaker. Aside from real estate, he has also found huge success in the auto industry.

His success didn’t start overnight, though. In fact, it came right after one of the darkest points in his life.

During his younger years, he was a self-confessed drug addict. But after a lot of determination for himself to become rehabilitated, he eventually succeeded at age 25.

Now, Cardone is the owner of three multi-million-dollar companies. They are Cardone Enterprises, Cardone Real Estate Holdings (aka Cardone Acquisitions), and the Cardone Group.

He also was a former CEO of the Freedom Motorsports Group Inc.

While the auto industry is where his career started, it was on real estate where he really took off. When he was young, he made his first property purchase.

But it failed drastically because it was a single-family home. Ever since then, he swore never to purchase a property like that anymore.

His real estate career really took off after he invested in his first and second property, a multifamily complex, which he had much success with.

Now, Grant Cardone has already built his $1.9 Billion portfolios of multifamily properties from scratch.

He was also named the #1 marketer to watch in 2017 by Forbes Magazine. And has authored a couple of books during his career. Among those are the bestsellers The 10X Rule and If You’re Not First, You’re Last.

He has also appeared as a regular commentator on news programs in various channels like Fox News, CNBC, Fox Business, and MSNBC.

His current net worth is estimated to be $300 Million.

How Does Cardone Capital Work?

As stated before, Cardone Capital provides a platform wherein you can invest in real estate, without having to buy any property for yourself.

To put it simply, it’s similar to when you invest in the stock market. In that market, you’re buying a share of a certain company, so when it makes money, you also make money (based on how much you invested).

The real estate crowdfunding system by Cardone Capital works similarly to that. In that, you’re basically investing your money on an existing real estate property that Cardone Capital provides.

Cardone Capital Investments 2

The funds that are currently open to investors mostly contain properties in the south and southeast of the United States. Grant Cardone has highlighted on several occasions that he believes the southern and southeastern US markets to be the most desirable real estate locations in the United States because of their steady population increase and job growth.

In addition, the properties that are listed are upper-middle-class to luxury apartment buildings. These are the preferred investments because, compared to single-family units, multi-family units usually yield more investment returns, and guaranteed ones, even if the occupancy of said property is low (sometimes, just one.)

The website also displays three statistics that may seem useless at first, but from an investor’s perspective, they may offer some useful insights. They are:

  • Total Units/Total Square Feet – While a seemingly irrelevant detail, it also has its importance. Knowing the occupancy size of the property in question can be a good factor in determining its profitability, as you’ll be able to determine how many people can rent the property.
  • Targeted IRR (Internal Rate of Return)
  • Targeted Equity Multiple

Requirements For Investing In Cardone Capital

Unlike other real estate crowdfunding platforms (for example, FarmTogether), Cardone Capital’s investment requirements are a little relaxed.

Cardone Capital accepts both accredited and non-accredited investors. An investor is considered to be accredited if they meet the SEC’s Accredited Investor definitions, which include:

  • Earning an annual income of over $200,000 per year for the last two years ($300,000 per household) with the expectation of maintaining that level of income this current year.
  • Having a net worth of greater than $1 million (individually or jointly), excluding the value of a primary residence.
  • Invest as a bank, an insurance company, registered investment advisor, business development company, or small business investment company.
  • Investing as a business in which all the equity owners are accredited investors.
  • Invest as an employee benefit plan, a trust, charitable organization, partnership, or company with total assets over $5 million.

Accredited investors are allowed a minimum investment of $100,000. While non-accredited ones can invest a minimum of $5,000.

Additionally, even people living outside the U.S. can qualify as investors on this platform. However, they must be SEC-accredited investors. Cardone Capital doesn’t accept non-accredited investors who are living in a different country.

How Much Does The Cardone Capital Investment Platform Cost?

Signing up on the Cardone Capital platform is completely free. However, aside from the money you’re going to use for the investment, you’ll also be charged additional fees.

These are the three additional fees that Cardone Capital collects per investment.

  • Acquisition Fee – Cardone Capital charges a 1% acquisition fee. This means that 1% of the purchase price of the property that is being acquired will be deducted from your investment.
  • Disposition Fee – The disposition fee that Cardone Capital charges is 1% as well. Thus, if a property you invested in gets sold, 1% of the sale price is also deducted from your investment return.
  • Asset Management Fee – The asset management fee that Cardone Capital charges is 1% of the total aggregate capital commitments. Thus, Cardone Capital will charge a 1% fee per year during the first 3 years on all invested capital.

Furthermore, Cardone Capital implements profit-sharing for all of its investments. This means Cardone Capital will take a cut out of any profits you gain from the investment, whether it’s from rental income or profits if the property gets sold.

The value of the split can vary. But for non-accredited investors, this usually results in a 65/35 split in revenue. 65% goes to the investor, 35% to the company.

The values may seem small, but when you add them up together, you’ll see that these fees can make up a significant part of your return. In simple words, the 65/35 profit split, which is by itself not a fantastic deal in real estate, may end up being something more like a 60/40 or even 55/45 split when taking into account all of the add-on fees.

In other words, it’s going to be quite expensive and you may end up earning less than your expected profit.

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How Can You Earn From Cardone Capital?

Cardone Capital - Harbor Pines

As with investments of this kind, how much you can earn from Cardone Capital clearly depends on how much money you invested here.

But while some of these investments have a risk of losing money, Cardone Capital does not. Indeed, based on their history, it appears as if they never had a record of losing money for their investors.

Cardone Capital’s funds are designed to generate 6% cash flow with a 15% annualized internal rate of return for investors. Cardone Capital investors are also eligible for a 6% preferred return.

One important thing to take note of before investing in Cardone Capital, is that these investments are designed for a 10-year period and have no exit. This means, you can’t just back out from your investment easily, and you have to wait until at least 10 years before you can pull out.

Thus, these investments are not for the trigger-happy. This is a long-term investment play, so don’t invest any funds that you might not need.

Pros And Cons Of Cardone Capital

Pros

  • Gives you an opportunity to invest in real estate, even with minimal capital.
  • Has the potential to give you a steady passive income stream.
  • Investment opportunities are plentiful.

Cons

  • The cash flow to keep this investment sustainable is very low, compared to other real estate investments.
  • Starting investment requirements is too expensive.
  • The profit-sharing condition is rather steep, and the hidden fees for every transaction only make it worse.

Is Cardone Capital Worth Joining?

Cardone Capital - Addison Place

Personally, the prospect of real estate crowdfunding is a good idea. Because it’s known that real estate is one of the more stable investments out there, with its value always going up.

Furthermore, with real estate crowdfunding, you get most of the benefits of having invested in real estate, while minimizing some of the hard work involved (but not completely eliminating it).

But all that advantages come with a price. And it’s actually quite steep.

Coupled with the profit-sharing conditions of the investment, as well as the hidden fees associated with this. And you can expect that the money you’re going to earn from here may not be as big as you hoped to be.

It also doesn’t help that you have a minimum holding period of around 10 years before you can claim your investment back, should you ever need it for any purpose. Therefore, you’ll have no choice but to wait for it if the cash flow for Cardone Capital is less than what you’d expect.

Alternatives To Cardone Capital?

Real Estate

This is just a personal taste. But when it comes to real estate crowdfunding opportunities, I prefer something like FarmTogether instead of this.

Because for me, investing in a farm lot is better than investing in a multi-family property.

Additionally, if you want some completely different ideas for making money in the real estate industry, then you can try some of the courses of Noelle Randall, Bob Diamond‘s Overages Blueprint, and even Pace Morby’s Subto.

But today, it’s so much better to invest in digital real estate which you can use to make money. So for this reason, it’s much better to invest in something that teaches you how to build your business on that platform.

Cardone Capital Review: Final Thoughts

Closing off this Cardone Capital review, I would like to share some final thoughts about this program.

Beastpreneur Final Thoughts

For me, investing in any kind of real estate is only suitable for retiring employees, who may usually have enough capital to afford an investment like this. The main reason for this is that it’s really expensive. You’ll need to have a huge amount of capital to even be qualified for this investment venture.

But arguably, the return of investment that you can get here, coupled with the fact that there’s a good potential for earning passive income from this, makes real estate crowdfunding systems like Cardone Capital a good investment platform to get into.

Still, it’s definitely not an investment venture that anyone can do. Basically, you have to put up a good amount of hard workload, and especially a lot of money, to succeed in this.

And if you’re able to put with that, you might as well just start a system that actually lets you earn money directly. Fortunately, I’m also here to offer you something that has worked for me quite well.

If you can’t invest in physical real estate, then try the next best thing: Digital Real Estate. If you want to know more about it, keep on reading beyond this Cardone Capital review.

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