Grant Cardone, a real estate investment expert renowned for his motivational speeches and sales training advice. He built a multimillion-dollar empire using what he calls the 10X Rule as his organizing principle; an approach designed to help people break free of cliched thinking in business and take substantial action toward reaching their goals.
Cardone recently has turned his focus towards real estate investments on a grand scale in order to generate steady income and appreciation of property values. He began investing in single-family homes before expanding into larger, multi-family apartment complexes – this has allowed him to achieve substantial cash flow and develop an expansive real estate portfolio.
Many investors question the veracity of Cardone’s marketing claims and financial strategies, particularly his aggressive sales tactics and manipulation that encourage his followers to make hasty investments without fully comprehending all risks involved. Critics allege he fails to disclose fees and commissions while downplaying real estate investing complexities and risks.
Cardone has attracted a sizeable following through his seminars and online presence, frequently promoting the Cardone Capital fund – a real estate investment partnership offering individuals to invest alongside him in large properties – with promises of passive income and high returns, yet they also incur substantial management and acquisition fees which reduce returns for investors. A lawsuit filed by consumer class action lawyer to address these allegations alleging Cardone misled potential investors about the nature of investments made.
Though the lawsuit filed against Cardone is specifically about his investment strategies, it exemplifies a rising trend of influencers soliciting funds from their audience through pooled investment vehicles. This trend has become particularly prevalent among social media personalities and celebrity endorsers; according to this class action lawsuit, Cardone promoted his funds on social media and through seminars by promising high returns with minimal risk associated with real estate investing and financial loss.
The lawsuit filed against Cardone alleges violations of federal securities law and misleading promotional practices that engaged in deceptive promotional practices, leading to compensatory damages as well as compensation for losses caused by any false statements that might have been made by Cardone. It has been filed in U.S. District Court for Central District of California by attorney Robert Freund who will represent his client in litigation of the case.
Cardone’s strategy of purchasing undervalued multifamily apartment buildings at discounted prices and then using borrowed capital to leverage them has proven highly successful, though this strategy may not suit every investor. Finding capital to fund such deals may prove challenging for smaller investors and also come with significant tax liabilities and risks related to evictions and property management – these issues can become burdensome headaches for both neophytes and veteran investors. Therefore, before making any definitive decisions it is crucial that one fully investigates any prospective investments before making their choice.