Frequently Asked Questions

Investing

• Who can invest in our non-accredited vehicle?

  Anyone! Well, not anyone, but we are excited to offer our new investment vehicle to both accredited AND non-accredited investors! Our new vehicle is open to everyday investors just like Cardone Equity Funds V and VI were. You do need to meet suitability requirements, including you can invest no more than 10% of your annual income or net worth, along with the fact that you need to be a “U.S. Person” not subject to backup withholding tax, such as a U.S. citizen or resident, U.S. partnership, corporation or entity, or U.S. estate or trust.

• What is the minimum amount I can invest?

  $5,000. We want to give everyday investors the opportunity to invest in real estate.

• What documents do I need to sign and how do I do that?

  Your documents will be sent in one email to the address provided to us, and they are signed electronically. First, you need to sign the subscription agreement. This document outlines the terms and conditions of your subscription, including the amount purchased. Second, you need to countersign the Amended Operating Agreement that acknowledges you understand the Amended Operating Agreement, and you agree to give the Manager a limited power of attorney to conduct business on your behalf. Third, you need to sign your tax documents. The IRS requires investors consent to receive their Form 1099-DIV electronically, and the 1099 consent form does just that. You also also need to complete a Form W-9 which captures your taxpayer identification number, for example, your social security number. Please note that if any of these documents are not completed, your investment is not complete. But, don't worry. It's actually pretty simple.

• Can I invest through my IRA?

  If you have an existing IRA or a 401K from a previous employer, it is likely that you will be able to self-direct all or a portion of it into our non-accredited vehicle. Check with your current custodian to see if they will allow you to self-direct your retirement account. If the answer is no, please contact a member of our investor relations team by email at invest@cardonecapital.com, by phone at 1-833-822-7435, or by text at 1-305-407-0276, and we will introduce you to one of the custodians that we work with that will allow you to invest in alternative assets using your retirement funds.

• How long should I expect to invest?

  We intend to operate for about ten years, but we are not obligated to sell all the investments by year ten. It is in our discretion to shorten or extend the vehicle's life. The reason for this is we want to maximize the value of our real estate investments. We do not want to be forced to sell the investments when the market is bad, nor do we want to pass up the opportunity to sell investments when the market is great. We are long-term investors and the more time we stay invested in a property, the better chance we have of capturing property appreciation from inflation and rising rents.

• Can I cancel my investment before the offering closes?

  Once you've begun the subscription process, you cannot cancel your investment electronically. You must email us at invest@cardonecapital.com, call us at 1-833-822-7435, or text us at 1-305-407-0276 and a member of our investor relations team will assist you.

• Can I get my money back or sell my shares after the offering closes?

  Once you are invested you should be prepared to stay invested for at least ten years. We do not offer a redemption plan because that would reduce the cash flow available for distribution to our investors who want to stay invested through the entire lifecycle of the vehicle. Generally speaking, the units will not be readily transferable. There is no market for our units, nor is one expected to develop. A unitholder may sell his or her units if a willing buyer is found, but that buyer must meet all suitability standards and other requirements applicable to the original unit holder. We will not help you find a buyer, and all transfers must be approved in writing by Cardone Capital. The buyer and seller will need to pay a reasonable fee to cover the costs in connection with the transfer.

• What type of fees do you charge?

  Our fee structure is typical for private real estate managers, and we believe our fees are lower than many other managers. We currently charge a 1% asset management fee based on the total equity raised, a 1% transaction fee based on the value of properties we acquire and dispose of, and a 20% management promote based on the distributable cash flow. As our portfolio grows, we will need to add significant resources to keep pace, and we may charge property management and financing fees to help cover the costs. Essentially, our ongoing management fees along with upfront transaction fees pay the monthly bills at Cardone Capital, and our management promote rewards us for the performance of the investment. Keep in mind that if the property’s cash flow goes up or down, so does our management promote. This aligns our economic interests.We do not charge miscellaneous fees, such as fees for processing and storing your investment information. We also do not ask you to pay fees or commissions to middlemen or stockbrokers to invest in our funds.

• Is there risk involved?

  
  All investments involve risk. We do not guarantee that you will earn our targeted returns. There are many factors that can impact the performance of your investment, many of which are not under our control. Please keep in mind, investing involves risk and may result in partial or total loss of your investment. Prospective investors should carefully consider investment objectives, risks, charges, and expenses, and should consult with a tax or legal adviser before making any investment decision. We do believe that investing in private real estate poses less risk than many other types of investments. Private real estate has historically been less volatile than the stock market, and properties generally appreciate over time as inflation tends to push rents up. Additionally, we conduct extensive research and due diligence on every property investment and have a high degree of conviction that our risk is balanced with our targeted returns. Grant himself is our single-largest investor across our entire portfolio, so he personally believes in the potential return of each of our investments. And during Grant’s real estate career, which spans more than three decades, he has never lost his money with a multifamily real estate investment.

General

• How do I contact Cardone Capital?

  If you have any questions, please email us at invest@cardonecapital.com, or call us at 1-833-822-7435, or text us at 1-305-407-0276.

• I've invested in previous Cardone Capital offerings, but I can't see my existing investments?

  We are transitioning to a new investor portal, but don’t worry, we still have all your information, and you can still access it by visiting cardonecapital.com and logging in as you would normally do with your old information. For our new non-accredited vehicle, your information will be stored here, in our new portal. Our new portal is designed to be more user friendly for you and administratively efficient for us. We believe you will enjoy the user experience more than ever. But we are still in the process of migrating your existing investment information to the new portal. We hope to have that completed soon. Until then, unfortunately, we ask you to have patience (we have over 5,000 investors to transition!).

• Are the tax benefits the same with the new non-accredited vehicle and the accredited vehicles?

  The tax-deductibility of depreciation is the same for both non-accredited and accredited vehicles. Basically, depreciation shields income from taxes over the life of the real estate asset. Of course, if the income is greater than the depreciation, taxes will be paid on the difference, but that portion of the income that is equivalent to or less than the depreciation is not taxed. This means you might receive distributions but owe nothing immediately in taxes! Where the non-accredited and accredited vehicles differ to investors is that accredited vehicles' income and losses are passed through to the investor, which means that some investors that meet certain IRS requirements can recognize passed-through losses on their current year tax return. Others who do not meet those requirements will have to wait until a later year to recognize passed-through losses on their tax return. Investors in the non-accredited vehicle will not be allocated losses individually, the vehicle itself will account for such. This hopefully will be simpler for many investors. Investing involves risk and may result in partial or total loss of investment. Prospective investors should carefully consider investment objectives, risks, charges, and expenses, and should consult with a tax or legal adviser before making any investment decision.

• What type of tax document will I receive and when?

  Your Form 1099-DIV tax information will be provided by January 31st of the year following each taxable year. We hope that this simplifies our portion of your tax season.

• What is the investment strategy?

  We intend to continue our broad investment strategy of acquiring and managing properties across the Sunbelt where migration and job growth are on the rise. We plan to acquire high-amenity apartment communities below replacement cost that are centrally located near employment centers and retail, dining, and entertainment districts. Our acquisitions could be stabilized properties with in-place cash flow that require minimal repositioning in the market, or our acquisitions could be underperforming or value-add properties that require meaningful capital improvements and significant hands-on management before income is generated for investors. Although we will primarily focus on Class A and B multifamily properties, we may also invest in other types of real estate assets if attractive opportunities arise, such as office, industrial, retail, or self-storage.

• What kind of returns may I expect?

  For stabilized, income-producing property investments, we target low- to mid-teens equity returns on an annualized basis over the entire life of the investment. We may target equity returns that are higher or lower depending on the type of investment and amount of leverage utilized. For example, if we invest in a property that requires significant repositioning through capital and marketing investments, we may forego near-term distributions to achieve a higher gain on the sale of the property in the longer term. We target higher equity returns for these types of investments as they involve more risk. Our targeted returns are just that, targets. Investment involves risk and our actual returns may be higher or lower and may include a partial or total loss of your investment.

• How will I be notified of how my investment is doing?

  We will provide you with periodic updates on the performance of your investment, including an annual report; a semi­annual report; current event reports for specified material events within ten business days of their occurrence; supplements to the offering circular if we have material information to disclose to you; and other reports that we may file or furnish to the Securities and Exchange Commission (SEC) from time to time. We will provide this information to you by posting such information on the SEC’s website at www.sec.gov. We may also provide you with other information, such as a quarterly report on the vehicle's investments, that we will be uploaded to our portal, and a notification of such instances will be emailed to you.

• How often will I receive distributions?

  We intend to pay distributions at least annually and our target is quarterly. We are excited that we can offer our new non-accredited vehicle to everyday investors, and we are just as excited we lowered our minimum investment to only $5,000. However, due to the significant amount of investors we anticipate accepting, we do project an increase in administrative costs associated with the offering, including distributing cash flow to our investors, which could impact your investment return. Therefore, we decided to reduce the number of distributions to at least annually so that we reduce those costs. The distribution frequency is at our sole discretion, and the change in frequency can depend on many factors such as the property’s cash flow level or needed capital expenditures. Sometimes the cash flow of the property may not support a distribution. Additionally, we may invest in a property with the plan of not paying any near-term distributions while we undertake a capital and repositioning program.

• How much of Grant's own money does he invest?

  Grant is the single-largest investor across our portfolio. There are no set formulas Grant follows when deciding how much he is going to invest. In some property investments, Grant has invested up to five percent of the equity raised. In other property investments, Grant has invested up to 90% of the equity raised. It really is on a case-by-case basis and driven by many factors such as lender requirements and the speed needed to close property investments. Grant evaluates each property as if he is going to invest all the money himself, and sometimes he does just that. In those cases, we will launch an offering after the property has been acquired to let others invest with him. If others do not invest, which has never happened, Grant is fine being the sole investor because he has conviction in the investment.

• What happens if Grant retires or passes away?

  That is a great question! We should discuss the reality of that situation. If Grant retires or passes away, Cardone REIT I and its property investments will continue to operate. Cash flow will continue to be generated and distributed to investors. We have a great team at Cardone Capital, and we have excellent third-party property managers that are very experienced operating our properties. Together the team will continue with business as usual – maximizing the value of each property investment.