Cardone Capital offers private real estate fund investing to average retail investors. However, some investors may be excluded from investing with this private offering. I did some research and contacted Cardone Capital to find out who exactly can invest in their funds.
Anyone can invest in the Cardone Equity Funds. These are funds for accredited investors and are open to U.S. as well as international persons. In their non-accredited investment fund, on the other hand, only US persons can invest. These are US citizens or residents, US partnerships, corporations or entities.
In this post, we will look specifically at who can invest in Cardone Capital, whether non-accredited investors can also invest, if foreigners can invest in Cardone Capital and what the minimum investment amount is.
Who can invest in Cardone Capital?
As mentioned earlier, Cardone Capital restricts access to its funds depending on the type of fund and depending on the type of investor. However, as a general rule, no more than 10% of your annual income or net worth may be invested in any of the funds on offer.
Furthermore, US persons who are planning to invest in the funds must not be subject to backup withholding tax with the IRS. When it comes to non-accredited funds, only US citizens or residents, US partnerships, corporations or entities or US estate or trusts may invest.
Foreign investors are excluded from this type of investment.
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Can non-accredited investors invest in Cardone Capital?
Non-accredited investors are individual individuals whose net worth does not exceed one million dollars or whose income is less than $200,000 per year. These types of investors usually have to deal with restrictions set by the Securities and Exchange Commission (SEC) and are thus limited in their investment choice with Cardone Capital.
Some funds are also restricted to accredited investors only. On the other hand, some funds are also open to non-accredited investors. But these funds generally do not offer a preferred cash-on-cash return.
Conclusively, non-accredited investors may also invest with Cardone Capital but will get a slightly worse offer. This is likely due to the additional hassle and regulation that is associated with non-accredited investors and entities.
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Can foreigners invest in Cardone Capital?
As mentioned in the previous paragraph, there is also a distinction between US and international investors when it comes to the type of fund that is open. Cardone Equity Funds are those with the aforementioned preferred return that are open to accredited as well as foreign investors.
The regular funds that do not pay out a preferred return are open to non-accredited investors but not to foreign investors. So, in the latter one, only US persons and entities may invest.
The same restrictions and regulations as with non-accredited investors also apply to foreign investors, according to the SEC.
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What is the minimum to invest in Cardone Capital?
I have written an entire article on the minimum investment for Cardone Capital. However, in brief, the minimum has long been 5,000 USD for most funds, and recently Cardone Capital has increased this minimum investment amount to $10,000 for their newly opened funds for non-accredited as well as for accredited investors.
If you are an accredited investor and wish to invest in the Cardone Equity funds that pay a preferred return, the minimum investment amount will typically be $100,000.
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What type of investment is Cardone Capital?
One of the main advantages of investing with Cardone Capital is that you will be a shareholder and a member of a limited liability corporation and thus will receive preferential tax treatment.
Instead of receiving a common 1099-DIV tax form from the IRS, you will receive a K-1 form which will entitle you to deduct the depreciation of the asset from your taxable income. This is because Cardone Capital is a real estate syndicator that offers an investment in private equity funds, which are set up as LLCs.
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