Let's face it, I am the little guy. My entire life I have felt like the deck was stacked against me. I grew up in my most challenging years without a father, raised by a single mother. She did her best to manage a household with just a little bit of money and three wild teenage boys.
High school, college, and young adulthood were all very difficult for me. Just getting along with others was sometimes a major challenge. When I got into sales and then business, my chip on the shoulder was obvious. but this made the idea of "the deck being stacked against me" some of my own making.
However, when I got involved in real estate investing in my 30's, I saw actual signs of how the deck IS really stacked against the little guy. I started looking into it and what I discovered blew my mind.
The little guy is encouraged to buy a single family home with great mortgage offerings, even a duplex or maybe a four-plex—but the moment he or she tries to get bigger than that the banks tighten up. This prevents the struggling household or person trying to create wealth to ever invest in the best real estate that ensures passive income, appreciation, and the great tax advantages that the wealthiest all benefit from.
I learned this first hand when I started trying to buy bigger deals where the real money is made.
The great deals were either never shown to me or never awarded to me.
Instead, the big players would get the trophy properties and I was allowed to buy the leftovers. If you think I am exaggerating, trust me I am not.
So, the little guy is left to buy a duplex or eight-plex, and they are forced then to manage the property themselves because it doesn’t produce enough income to afford a manager. By the way, this is the first real estate to get foreclosed on when the economy gets tough.
For 30 years I have been buying real estate. Today, I have acquired over one billion dollars of properties. When I started trying to buy the great properties I had to fight the big institutions and banks every time.
I started to look into this and have discovered why this is and it wasn’t what I thought. Why do the little guys get the junk real estate and the wealthiest organizations worth hundreds of billions buy the trophy properties and hold them for decades?
Vanguard, Blackstone, and Goldman (Wall Street) are getting all the good stuff while the rest of America is encouraged to buy a home or invest in a REIT. Or maybe you get an offering from a local real estate syndicator in your market offering a 30-unit apartment deal that needs to be rehabbed or one of the popular crowdsourcing sites promising you quarterly income to invest in a marina or a single family home in Covina, California.
To find out what was really going on I hired an attorney and invested money to create a fund so my friends, followers, and employees could invest with me in trophy real estate deals that we would buy before the big boys could get them and then later we would sell them to the behemoths.
The first thing the lawyer did was warn me, “you don’t want to do that for a number of reasons...
My question was this:
The lawyer went on to explain that I could do that but only for "accredited investors”, those who earn $200,000 annually or have a net worth of $1,000,000, but not for those who earn less than $200k. The latter group (non-accredited) was the bulk of who I wanted to help. My mother, sister, mother-in-law, retired uncle, long-term employees, executives and even the lawyer working on the deal would not be able to invest in deals with me!
“Why not," I asked.
The attorney went on to give me a number of dumb answers like...
Financial intelligence has nothing to do with earning power, think Mike Tyson, Nick Cage, Mark Twain, or bankrupt businessmen Abe Lincoln, HJ Heinz, Henry Ford, Larry King, Dave Ramsey. What about the number of financial institutions who failed with their floors of Harvard graduates like World Comm, Tyco, Lehman, Indy Mac, and Washington Mutual?
The government doesn’t make the rules, people do. So I kept looking and asking, “who doesn’t want the little guy to invest with me, when I know these deals are good for them?”
Follow the money, as they say, and you will find the answer.
So, I asked myself, “why are they making it so easy for the wealthy people to invest with me and so hard for those who don’t yet have wealth and need it the most?"
Here is what I found out. Less than 3% of the population is an accredited investor. The cost to set up a fund for my wealthy buddies is almost free. The cost to set up a fund for everyone else can cost from $500k to a million dollars.
I called a friend of mine who used to work on Wall Street and asked him, “Why does Wall Street make it so hard for the little guy to invest with me?” He said, “they don’t want to compete with you for the dollars.”
Wall Street wants to stay as the middleman between the little guy and the best deals.
This is how they create their derivatives, offerings, REITs, ETF's and all their other casino games. The laws are set up to protect Wall Street, and it's an attempt to control the money of 97% of all investors. As they say, “he who controls the money makes the rules.”
The rich get richer because the wealthy have access to the best deals. Keep in mind, to be a customer of Goldman Sachs you need a minimum of $10,000,000 in cash but their average client has $50,000,000.
But I am going to change all that.
I am investing my time and money to create funds for the little guy to partner with me on trophy real estate. We are cutting out Wall Street—the middleman—and giving my friends, family, and followers access to deals that are typically reserved for the wealthiest organizations on the planet.
I have created a fund just for NON-ACCREDITED INVESTORS against the advice of my lawyer. I thought about calling it the “Little Guy Fund” but instead we decided to name it Cardone Equity Fund V, because it’s our fifth offering. Our first offerings were only available to my wealthy friends and were oversubscribed in record time.
To be involved all you have to do is register at CardoneCapital.com. We are proposing a $10,000 minimum to the SEC and are waiting for their approval. So if you love real estate, have at least $10k, want access to what I consider trophy properties, are able to wait patiently the way I do, and want to partner with me on deals, make sure you register HERE.
We will allow customers and previous investors in first and then will take you as you register. I expect there to be tremendous interest in this offering amongst the 11,000,000 who follow me online and we will be able to accommodate about 1,500 of you.
Why in the world would a person making $60,000 a year NOT be able to invest with me and someone making $200,000 can?
The person making $60k needs the investment vehicle even more than the rich guy!
Comment below what you think about the Wall Street scam they've set up where only "accredited investors" can easily invest.
Grant Cardone is a New York Times bestselling author, the #1 sales trainer in the world, and an internationally renowned speaker on leadership, real estate investing, entrepreneurship, social media, and finance. He has been investing in Multi-Family Real Estate since the mid-1990’s. Cardone’s combined 30+ transactions have been across five states including southern California, Arizona, Texas, Tennessee, North Carolina, and Florida. Cardone buys below replacement properties that offer opportunities to increase rents, higher occupations, reducing concessions and lower expenses. In addition to the above criteria, all new purchases must provide positive cash flow from the closing date. His very conservative investing approach is based on a purchase price based on trailing 12 income calculations. He personally does his own due diligence and will only enter negotiations on properties he is prepared to close. This has created a great reputation with sellers for his ability to close the deal. Grant is looking to expand his real estate holdings with Cardone Capital, which currently has over $800,000,000 AUM.