Are You An Accredited Investor?
An accredited investor, in the context of a natural person, includes anyone who:
- earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
- has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).
On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period, in which case the person may satisfy the threshold on the basis of joint income for the years during which the person was married and on the basis of individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
- any trust, with total assets in excess of $5 million, not formed to specifically purchase the subject securities, whose purchase is directed by a sophisticated person, or
- any entity in which all of the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
What is a K-1?
Similar to a 1099, a K-1 form is an accounting of the tax income for the year. Each investor receives one per investment. K-1 forms are most commonly used in partnerships and in real estate ownership.
How often should distributions be expected?
An investor can expect to receive monthly distributions. Cardone Capital also distributes capital to investors at the end of the year depending on the performance of the properties and when properties are sold or refinanced.
How will I be updated on the progress of my investment?
Investors can access updated account information 24/7 by logging into our investor portal. They’ll also receive asset management updates via email on each investment and a detailed investor report every quarter.
What happens to the money when I fund an investment?
Funds can be wired directly into the subscription account of the fund, or sent by check.
What is the minimum investment?
$100,000 is the minimum to invest in a fund.
Can I invest through my LLC, LP, Trust or IRA?
Yes. Investors are able to invest through an LLC or trust. Investors are also able to invest through their traditional self-directed IRAs.
Please contact a Cardone Capital team member if you need help selecting a custodian.
What are the fees?
Investors receive a 6% preferred return. Once investor capital is fully returned and the preferred return is paid, Cardone Capital receives 35% of the profits and investors receive 65%. Additionally, Cardone Capital receives an annual 1% management fee on invested capital that is used to pay operating expenses of the company. A 1% acquisition fee and 1% disposition fee will also be charged for all assets. There is no fee to setup an account.
Will I be asked to verify my status as an accredited investor?
Yes. Once you decide to invest in a property, you will be contacted by a Cardone Capital team member with instructions on how to verify your accreditation.
How can I invest?
Offerings are available to accredited investors who register on Cardone Capitals secure online investment portal. Click on the “Sign Up” button to begin setting up your account. Once registered, you will have access to detailed information on available funds and performance projections. Scroll to the bottom of the page and download the three PDF fund documents.
Contact a Cardone Capital team member for instructions on how to:
- Verify your accreditation
- Sign legal document (Subscription Agreement)
- Fund your investment
Am I able to cash out of my investment at any time?
No. By their nature, real estate investments have a longer term time horizon than that of liquid stocks or bonds.