저자: Kevin · 외국인
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Cardone Capital 펀드의 수수료 구조(1% 리파이낸싱 수수료, 35%→50% 캐스케이드 수수료, 이연 수수료, 6% 온디맨드 차입)와 15% 연간 IRR 홍보의 문제점을 증언·SEC 서류 근거로 지적. 감사 범위(펀드 5·6만 Reg A 감사)와 비트코인 보유 등도 언급하며 소송 맥락을 설명. 영상은 특정 자산의 가격 방향 예측을 하지 않음.
다듬은 글
target stock multiple 2.5-3 times, right? By the way, I don't think we'll get to that point. Oh, I feel a little sorry for this guy. If you have any property, I will come and take it from you. Yes, Grant Cardon tried to do that, and, oops, things changed. Grant Cardon sued me in 2019, and I was sitting in the courtroom with his staff attorney watching his staff attorney fall apart, and the judge asked the staff attorney, "Hey, do you want to drop your case because you're being lied to?" And, oh, oh, they immediately closed it .
So, Cardon, even though I also own real estate, it's not necessarily the case that if someone else owns the property and you don't like what they're saying, you can just come and take it. But what I can tell you is that , oh, things have changed. My God, you brought this on yourself. Now you are being sued for $250 because you made a promise and didn't keep your promise, even when you were told not to.
And, damn it , that's not good. And you just released a video testimony that confirms some of our other suspicions about you. My God, you're really good at getting knee-deep in a pile of [ __ ]. So, let's begin. First of all, my original video that I posted 5 months ago about the latest update on Cardone Capital has garnered almost half a million views.
Cardone suggested, or I suggested, that Cardone might actually be transferring money from deal to deal that he was lending to his funds. And I'm like, "Dude, that just sounds like you're dragging money from one fund to another." And some of the documents that came to light as part of my research basically confirmed just that.
It shocked me a little , but not completely. And how Cardone gets a commission from this makes it even funnier. You will like it. Okay, ready for this? In 2019, Grant Cardon was already refunded about $42 million . My God. The $42 million means he ultimately borrowed his own funds to purchase the investment .
$42 million, and these loans paid 6% interest with repayment on demand. Now I just want to do a little sidebar for a minute, okay? What were the interest rates for housing in 2019, right? Let's briefly review what I wrote in 2029 . Let's do a quick Google search and see what it says. Ah, interesting.
A 30- year fixed-rate mortgage was about 3.9 to 4. A 15-year was about 3.9%. Thanks, Google , for the AI review. How much did Grant Cardon charge his investors in his fund for a loan that he could call and demand as payment whenever he wanted? Cardon charged 6% with payment on demand. My God. So we were right in assuming he was borrowing as part of his funds, and he could have said, “Hey, why is this a problem?
I helped make the deal. I helped make it happen , and I deserve some percentage, right? I think you just deserve a premium compared to other mortgage rates, but that's okay. Hey, no problem. No problem. You have your excuses and you can use them. Now, what I find really interesting about this $42 million is what ultimately happens to the commissions.
This is where things get really spicy. You see, the first thing you need to know about debt is that when Cardone first buys a deal, the riskiest part of the deal is the beginning of the deal, and his $42 million in debt is ahead of all his equity investors, right? So, stock investors, if the value of real estate goes down early on because he failed, those people will be the first to be wiped out .
But at the beginning of the deal, until he launches his next fund, until the next deal essentially reduces the risk of the first one.” First of all, it has credit, which means that yes, it will eventually be invested if it, you know, turns it into equity, I think, in the future, but initially it's actually protected.
So, first the investors have to be wiped out, then he goes bankrupt, and then the bank loses money. In real estate, it seems that investors will suffer initially, but let's not even assume that these assets will be underperforming. Let's just think about commissions for a moment. How will commissions be calculated ?
Hmm. Well, in my last video, we speculated that maybe Grant Cardon charges commissions only based on what's called contributed capital. So he's not going to charge a 1% acquisition fee on the money he borrows. Okay, you keep borrowing $42 million over and over again , you roll it over, it's like literally taking out an extra $ 400,000 every time you roll it over.
And you don't actually do anything, and no one actually contributes that capital. So people are wondering, oh, but Kevin, you know, is...Is that contributed capital? Is it based on the purchase price? And the answer to this question depends on what part of those same documents you actually want to review.
For example, here is an SEC document that indicates that the asset management fee is 1% of the capital raised by the company. Okay, so, raised in the form of loans or from investors? We do n't really know. And then here, in the same document, it says that the acquisition fee is actually 1% of the purchase price of the fixed assets of the investment.
So it seems that even in Foundation V's own documents, unless something went wrong here , they couldn't even clarify their history. OK? But then we get to interesting things like refinancing fees. Hooray! This made me laugh a little . So, here's what you need to know about refinancing fees. And it gets really dirty and very slippery.
So the first thing you need to know is if investors put $35 into the deal and use it to buy, say, a $100 million property. If Grant Cardone is financing a refinance now, you know, just getting an appraisal. This doesn't mean that the property was actually sold for that price , right? But if he eventually gets a new loan of, oh, I don't know , they originally put in 35, so they had a loan of $65 million, right?
Let's say they could refinance it in the future because, you know, the deal was for 10 years or something, great. They are refinancing it with an excellent rating. 150 million dollars. In this example, they received a loan of $97.5 million. Take away the original 65. That's about 32.5 of additional equity that he can now return to investors.
He didn't actually return the money to investors. He simply gave cash to investors and received a commitment in exchange. So, the fund's investors now have more leverage in the deal. What's really interesting is that Cardone actually gets a 1% commission when he does this through the { quote}{end quote } refinancing fee.
And there are two videos where he says exactly that. The first one was recorded before this testimony, and it was on a podcast with Graham, actually, Graham and Jack. And he says, “Oh, yeah. I get 1% commission when we get your capital back and refinance, baby.” “First take a look at this, and then we’ll look at what he said during his testimony.
Is there no possibility for commissions between the two parties? If I refinance it, say, in 7 years , and I take a refinancing fee, it will be 140, and suddenly the asset is worth 500 million, and I can borrow another 100, I will get 1% of the fee when we get your capital back. Hmm. Good. So, we get this 1% commission.
In other words, for this refinancing, if we now take out an additional $32.5 million in debt in the future, Grant Cardone will again receive a 1% commission on that. But it seems Cardone is also saying that if the value of this property goes up a little bit, he will also take his share, his 35% waterfall from this refinancing .
Here he is. Here's your 33 million, here's your 33 million, and I'll get my 33 million. Good?" By the way, I get one small point. And I'm going to get anything over that hundred that I'm going to give you back, I get a share. Guys, I didn't just get a hundred. Here's your third, here's your third, here's my third.
I got another damn hundred. And you're like: "Damn, bro." But then it might make you think, "Okay, if this money is returned, does that mean it actually reduces 1% of the purchase price of the property?" "No. They also continue to charge 1% per cent. I'll show you that in a moment, but first I want to show you how the story changes in the testimony when it comes to these refinance fees, because they don't look very good.
So, I think, something like they haven't figured out yet whether they're going to charge 1% of the capital contributed or 1% of the asset, uh, you know, the purchase price. Who knows? Maybe it was just a typo. I think, although I haven't figured it out yet , they also, just when they're touting their fund, figured out that they charge a 1% funding fee.
But when they give legal evidence, they haven't actually decided it yet. That's it. Do you charge a refinancing fee? Well , maybe so. I do n't know. You don't know. I'm not sure at this point. Oh. Okay, so at this point it's kind of a comedy. Because it means you can now refinance indefinitely. And that's his Goal, isn't it?
Preserve these assets and continue to borrow. The thing is, when you get an assessment from a bank, the bank wants to provide a loan. This is not necessarily the market value of the property , especially in commercial real estate, where the requirements for these specific agreements are much less stringent.
In my opinion, single-family homes are now heavily regulated. I'm a big fan of single-family homes. We also have apartment buildings, and this is not about me. I just want to say that there is a really big difference between getting a refinance appraisal and selling. Market value, when someone actually looks at a property and says, "Oh, I'm going to have to invest this.
I'm going to have to invest this. I don't know if this rent is actually justified. Will I be able to continue to get this rent?" "I don't fool appraisers. I'm just saying that even industry evaluators know there's a big difference between the two . And if you charge a fee for the money you refinance, it's kind of like how you charge a fee for a loan, which probably means he's also charging a fee for his original 42 million that he continues to repay, or at least that's what it seems like.
I don't know. I have a bunch of parts here. I don't have the complete puzzle. So I want to clarify this. I'll just try to show you things the way I see them, and then you'll really have to check it with facts. But what I want you to see is a kind of ghost commission. Then again , maybe it was phrased innocently.
Maybe they didn't mean to phrase it that way, but I think it's a bit of a scam. And I think they knew exactly what they were doing. Remember how I said, "Hey, that 1% can stay..." going up to 100, even though they got back 32.5 of the 35 they raised and still own the building. They just have more debt on it, right?
"Which obviously increases the risk for the building, especially if that money is then potentially reinvested by investors who say, ' Wow, I got my money back.' " Let me reinvest." "You start all the commissions from scratch, right ?" From your new investment in the next fund. It's literally repetition , repetition, repetition, kind of like what we talked about in the previous video.
But let's focus on the facts for a moment. This is what they write. After the first 3 years, the amount of contributed capital will be reduced by the return of capital to participants from the liquidation or alienation from the sale of the company's assets. Okay, it gives the impression that the asset management fee, 1%, will be reduced because we refunded your money.
For example, if we simply return $32.5 million to you, then only $2.5 million of contributed capital will remain in the deal. The rest is dead, and there is no growth in justice, right? OK. But they will potentially continue to charge 1% on the 100 million, which means that there is $2.5 million of investor money left in that fund, but it will charge a million dollars in commission if it is at that purchase price.
Or, even if it is…” not based on the purchase price, meaning we’ve seen both versions, and this is where you’re going to charge $350,000 in commission on two and a half million dollars. Again, this is their document. Maybe it's just a typo. Maybe I misunderstood . Maybe I've watched too much The Walking Dead, maybe I just don't know.
But it seems to me that liquidating or disposing of an asset, which reduces the commission, is quite different from refinancing. I don't know. I personally think it was intentional. You keep racking up commissions one after another, and that's why, as we said in the previous video, Cardone wants to do an IPO, because, bro, if you created a system where you could get a million dollars in commissions on two and a half million dollars of investment money .
My God. This makes a lot of money. Good. So if you charge people a commission based on this, uh, you know, assessment, uh, we can see problems with that. But the problem of the lawsuit only slightly touches on these issues. The lawsuit actually stems from ...This case was filed on September 16, 2020.
So, it's been going on for some time . And this is because of a post from April 22, 2019, where Cardone said that investors would receive a 15% annual return. If I 'm in this deal for 10 years, you'll make 150%. Then, when asked about the star, like, "Hey, you know where the caveat was that you might not earn it?"—"He doesn't know where it is." And so, obviously, that's when things get complicated.
See for yourself. Quote: “Get 15% annual return . If I'm in this deal for 10 years, you'll make 150%.'' "Uh, here's the basis of the claim, which then develops further into the deal, specifically where Grant Cardon is asked about an internal rate of return of 17.88% and potentially two and a half to three X's, which Grant Cardon now admits in his testimony ...
This is starting to annoy me, because I don't think we can get there. This doesn't look good. In my opinion, that's something you don't want the jury to see, let's put it that way, but, uh, it's going to be used, I think. Let's go. The internal rate of return is 17.88%. Yes. Right? Good. And it says a target equity multiplier of 2.5 to three times.
Yes. Right? By the way, I don't think we'll achieve that either. For official comment. 10X Living at Panama City Beach—that's a fund six property, right? I'm almost starting to feel a little sorry for this guy. I'm just a good guy trying to share this information. He brought it on himself. Good. Good.
Further". So the next thing we have is that, you know, for many hours here, Cardone's defense, essentially, seems to be this: "Hey, look, you know, this internal rate of return? Well, we had an asterisk, and to be fair , you have to consider things like cash flow, earnings, write-offs, capital protection, inflation adjustments, and there's an asterisk ." “I can’t find where the asterisk is.
I don't mean to be mean, but I'm just saying that you can see him really falling apart. I almost feel a little sorry for this guy. Potential clients are participants who own all the money in the account. All capital expenditures that are in this account. They, they own it. I don't own this. Regarding the Instagram post, it was predicted to be 100k, and again, you're missing the asterisk.
I think the asterisk indicates the projected return, assuming a 5% return on $100,000. But again , this post had nothing to do with that proposal. This is completely separate. Mr. Cardone. The stars you're talking about... Yes. The post itself doesn't specify what kind of stars these are, does it? You will find them somewhere.
They are somewhere. There, there, this little star is moving somewhere somewhere . You need to search for..." this, right? It is not in the main part of the post. I have no idea right now . This is 7 years later. 7 years and probably 10,000 posts later. And we just... But it's right in front of him, and he can't find it because it's probably not there.
He just waved it in front of us. But then again, we can't see it in full detail, so who knows? Maybe it does n't really exist. The thing is, he was sued by someone who had invested $5,000 in a reggae fund twice. And these statements here were also in the SEC letter asking him to revise or remove his 15%IRR, internal rate of return, for investors because the SEC said it had no basis.
And Grant Cardon has a hard time coming up with actual math to defend this during his actual testimony. Then we move on to the fourth problem, deferred commissions . In my original video 5 months ago on this topic, I said that Cardone likely defers a significant portion of his fees: a 1% acquisition fee, a 1% asset disposition fee, a 1% asset management fee charged annually, interest on the use of the assets (which is a 35% cascade that has been increased to 50%), plus a 1% loan fee.
Maybe, maybe, we're not sure yet; maybe we'll just give away that commission. Okay, that will come up in a moment. So when you actually look at the Foundation 5 document, you can see how a little bit of that is reflected. And, in my opinion, that's a little strange. Look at this. This is the original statement of assets of Fund 5, called the balance sheet, as of May 31, 2018.
It shows zero equity in the participants and a related party liability of $18,000 , likely for offering expenses, as they wrote here. Okay, no problem. But in this same document that lists $18,000 in debt, we actually have this little note about additional debt, and I'm not entirely sure where that would come from because it's written in a very strange way.
and mysterious way. But there is literally a footnote here that says that an acquisition fee totaling $1.366 million must be paid. The balance will be paid later from reserves, operations, or from sales or proceeds. Okay, so we still have $1.6 or $1.366 million that needs to be paid, but it doesn't actually show up as debt because of the way they structured these investments of funds five and six so that they were investments of a fund in another of its funds.
And so it seems he can reformat certain debts into footnotes . I'm not entirely sure how this works. It just doesn't sound right. If I now look later at the annual report that ends in a couple of years, I can actually see that a total of $3 million in acquisition fees has been paid, but another $1.6 million needs to be paid.
So, he can decide when he gets his money and when he doesn't, and he can hide it from what at least looks legal – the balance sheets of these companies. Someone has to pay the commissions, but I don't think people really realize everything that's going on here. Maybe it's perfectly legal, but let's just say it's just an interesting five, only five and six are unaccredited Reg A funds.
He has 47 funds. And on top of that, he also reminds us that when he takes his 1% refinancing fee, he also takes his 35% cascading fee. I should have mentioned this earlier. Maybe I'll edit this part. But Grant Cardon then hints, "Hey, I'm going to take my promotion no matter what." “Which means it will happen, of course, unless he decides to be Robin Hood.
Take from the rich and give to the poor. Yes , let's try to reconcile these two things, because they literally both stem from his own testimony. Five times I'm going to get my promotion, believe me. And my investors will want me to get my raise. If it does what I think it will , I'm going to go and get my promotion, buy a big boat, sit on it for about three or four months, and invite you out there, Morgan.
Going to sunbathe with me in the south of France. So here's Cardon saying he wants to get his raise when he multiplies that money by a few hardcores or something, and then he's going to sit in the south of France. But the problem is that it involves a lot. Not only that, but in defense of his IRR, his 15%, he actually claims that he would just consider becoming Robin Hood and forgoing the 35% uplift commission, the cascading commission, something like that ...” He said earlier.
He will be Robin Hood. Which doesn't quite mesh with the fact that I'm going to take advantage of this ad, buy a boat in the south of France, invite you over, and sunbathe. But let's just listen to Cardone himself tell it. And, uh , you can see the grief. This 17.88% or this 17.01% here that is reflected in this document is not the investor's internal rate of return, is it?
Objectively. No, it's probably gross income. I don't know, I don't know. I don't know. Probably gross income, meaning before commissions, is tiny. Ah, commissions are rising again. God, these commissions keep appearing out of nowhere. I just can't hold them back. I don't...Is it in...I'm not sure. Without me doing it by sitting and counting.
Look, this involves a lot of things. Again, you...you know, you remember Robin Hood , right? I don't need to take 35. In that time frame, I would... have already made money on this fund. Mr. Oops. Hey, hey, hey, I know you guys are going to sue me about this 15% internal rate of return. Um, you know, if it makes you feel better, I don't have to take the 35% or 50% that I do on my list.
Yes, you know what? I have a choice. Something like refinancing. Well, the next thing to note, and I would call this problem number six at this point, is auditing. As far as we can tell, only funds five and six are audited Regulation A funds. That means, and I would say it's likely, but it needs to be fact-checked.
I would say, based on the fact that the other funds do not appear to be Regulation A funds, that all of his other 43 transactions, the other funds, probably have not been audited. So think about that for a minute. Two funds he audited are suing him . All others do not pass the audit. A monkey sees no evil, I think.
I do n't know. It's just a slight suspicion. Also, and this is normal for Regulation A-compliant companies. I will give credit to Regulation A-compliant fundraising companies. I will give credit. These funds are not audited by the PCAOB. They make it clear that this is a much more basic level of auditing.
A PCAOB audit typically requires two or more signatures to verify certain statements. Lower standard audits usually do not have these. I'm not an auditor or a CPA, so I can't tell you exactly all those damn differences. Ask the AI, okay? But Regulation A proposal very rarely passes a PCAOB audit because it's very unpleasant, and I know this because I've been through it myself .
That's good. This gives you a higher degree of confidence when you have a PCAOB audit. These funds are not audited, and these funds come from audited funds, but not from PCAOB audited funds. Now, in addition, Cardone now, I call it...Problem number seven, said that in his recent deals he's been doing 50/50 with investors.
He also says his average value is now over 90k, maybe even 88k. Uh, it looks like he's buying the same bitcoins that Michael Saylor was selling . Last week, Saylor sold about 1,600 bitcoins, more than half of what Cardon owns. Uh, and yes, Cardon, you know, has some Bitcoin, but as he himself admits, he's pretty stuck.
Uh, I'm not going to buy bitcoins. Eh, I personally think that's a bit of YOLO from Grant Cardona. I think he looks at it like, " Hey, dude, all my legal problems will go away if Bitcoin hits a million." “A-And yes, they would do that. It wouldn't matter because you would make a lot of money. So I understand.
I understand. I just don't know if this hope is a good strategy for a real estate fund. Apparently, you know, he was posting clips of him giving a deposition, telling the lawyer to call your dad. Uh, also told the lawyers that they couldn't accept the truth. And that makes him smug in a way. In my opinion, investors don't know what they're signing up for with this guy, and he's kind of smug about it .
Uh, I do n't know how well it works. So, if you put it all together, we didn't get much out of it . First, it is likely that Grant Cardon is taking a premium for this financing, which he can essentially leverage to bring in his own investors on the riskiest part of the deal, protecting him early in the deal.
It seems so. Check the facts. The second problem is the refinancing fee . It looks like he takes his refinance and his cascade fee when he..." refinances. So it's 1% plus 35%, and then 1% stays put. Hmm. It doesn't look very good. It's hard for him to calculate his 15% IRR because he's also assuming that inflation adjustments, capital protection, write-offs and all these other adjustments will actually support him to 100, you know, or to 15% IRR, which the SEC says he can't prove, but apparently he kept pushing it anyway, or, I mean, he says that at some point after the SEC asked him about it, he took it down.
I don't know. People have different arguments about this . Regarding deferred fees , deferred fees are reflected in some of these audited financial statements, but they are not reflected as debt. They appear as footnotes, which is strange. Also, I think he's kind of bluffing and saying, "Hey, I could be Robin Hood." I can just give away my 35% share, and then we will have 15%.
So, what is the lawsuit all about? "I don't think this will pass." I think they could have benefited from an audit, but they didn't . And it is quite likely that if only these two were checked, the other 43 or perhaps closer to the other 45 deals or funds would not have been checked . And he doesn't believe in his victory.
So, here it is . Cardon's testimony contains a full breakdown of what the hell just happened. ."
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