Cardone Capital offers real estate crowdfunding for accredited and non-accredited investors. As a novice real estate investor, I wondered: what is the minimum amount you have to invest with Cardone Capital? Turns out the answer is surprisingly simple.
The minimum investment for Cardone Capital is $5,000 for non-accredited investors. For funds that are only available to accredited investors the investment minimum ranges between $100,000 and $250,000 and varies by fund.
In this post, you will find out what the minimum investment is for Cardone Capital. We will look at the different investment minimums per fund and compare rates between funds for accredited vs. non-accredited investors.
Finally, you’ll also learn why the minimum investment varies so much and how you can invest in real estate even under Cardone Capital’s minimum investment.
Does Cardone Capital have a minimum investment?
Yes, Cardone Capital sets minimum investment amounts for all of their funds. However, the minimum investment frequently varies by investor type or fund size.
Surprisingly, the answer to this simple questions is not that easy to find. Even Cardone Capital’s own FAQ does not directly address this question:
The easiest way to find out what the minimum investment is for Cardone Capital is to actually sign up and look at the current offerings. Once you’re signed up and take a look at the offerings page you will find the minimum investment for each fund in the top right corner of the offering card:
Minimum Invest per Fund
Here’s an overview of the current minimum investment per fund:
|Cardone Equity Fund V, LLC||N/A|
|Cardone Equity Fund VI, LLC||$5,000|
|Cardone Equity Fund VIII, LLC||$50,000|
|Cardone Equity Fund IX, LLC||$250,000|
|Cardone Equity Fund X, LLC||$250,000|
However, the minimum amount for some funds is actually not visible from the offerings list. To find out the minimum investment amount for these type of funds we’ll need to click on the fund offering and then on ‘Invest Now’.
This will bring up the transaction center. The investment commitment is then displayed at the bottom left:
For this fund the minimum investment is only $5,000 – the lowest there is.
As you can see, the minimum investment per fund varies quite a lot. This is due to the type of investor each fund is geared towards. Typically, the more qualified the investor profile is for each fund, the higher the minimum investment.
Minimum Investment for Accredited Investors
For accredited investor funds, the minimum investment will be a lot higher than for non-accredited investor funds. Here the range of minimum amounts starts at $50,000 and goes up to $250,000 for Cardone Capital’s most exclusive funds.
In return for this high minimum commitment, accredited investors receive preferred returns and access to better properties.
Minimum Investment for Non-Accredited Investors
For non-accredited investors, the minimum investment is $5,000. In return, non-accredited investors will also get access to similar quality multi-family investment properties but receive less return of the operating cash flow.
With a $5,000 minimum investment you can expect a return of 5-6% cash-on-cash. The total return for most non-accredited funds is advertised as 15%.
There are currently no funds that Cardone Capital offers that have a lower minimum investment than $5,000.
Why does the minimum investment vary?
There are several reasons why the minimum investment might vary per fund and also per investor profile. First, let’s look at the difference in funds:
The difference in minimum investment by funds
Cardone’s equity funds are structured in similar ways but include a variety of different properties. Some properties are simply more expensive to acquire or require higher ongoing maintenance costs.
However, since Grant usually closes the deals before even funding the investment cash flow is not the reason for the varying minimums. The more probable reason that some funds are just harder to get into is exclusivity.
By setting the entry-level way higher than common investors can afford, Cardone Capital is able to attract high-net-worth investors seeking superior returns. And these returns are offered in the form of preferred returns from operating income.
The difference in minimum investment by investor type
When it comes to investor types Cardone Capital also sets different investment minimums. The more qualified and professional the investor is, the higher the minimum investment. The reason for this is simply the reduction of administrative costs.
The lower the minimum investment is, the higher the number of individual investors that participate in a fund. This increases customer support queries and accounting costs for tracking and managing each individual investment.
Another reason for distinguishing between accredited and non-accredited investors is the fact that accredited investors tend to be more experienced and require less regulatory concern from the syndicator.
Other options below $5,000
If even Cardone Capital’s lowest minimum investment of $5,000 is to steep for you, don’t despair! There are other options to invest in real estate syndications available to you.
Fundrise offers a simple and excellent way to increase your exposure to real estate and the minimum investment is just $500. With their eFunds, you will also be able to invest directly in real estate instead of owning a share of a REIT.
Cardone Capital has made real estate crowdfunding available to everyone. Well, everyone with at least $5,000 to invest.
Although the minimum investment varies by fund and by investor type, the absolute minimum you will need to invest with Cardone Capital is $5,000.
Their higher quality funds that offer better investment conditions and preferred returns often start at $50,000, $50,000, or even $250,000. These are usually reserved for accredited investors.