Grant Cardone Launches New Fund – 'It's Like Mixing Two Different Worlds'

In the footsteps of tech titans like Elon Musk and Jeff Bezos, real estate mogul Grant Cardone is making waves in Florida.

Cardone has launched a groundbreaking investment fund that merges real estate and cryptocurrency, according to Realtor.com. He believes the innovative approach can stabilize the volatile crypto market by balancing Bitcoin investments with the steady cash flow generated from a portfolio of 300 residential properties.

The ambitious fund seeks to raise $87.5 million, with a minimum investment of $250,000 per investor.

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"I make the purchase with my money and I pay cash for the real estate and the Bitcoin at purchase," Cardone told Realtor.com. "Then I offer it to my audience of investors and partners at the same price I purchased it. We have no debt."

For the next 48 months, the cash flow generated from the real estate portfolio will be systematically reinvested to purchase an additional $14 million worth of Bitcoin. The reinvestment strategy is expected to yield significant returns. Cardone claims historical performance suggests Bitcoin could appreciate to about $30 million over four years.

"This takes the volatility out of the Bitcoin because the real estate is cash flowing every month," Cardone said.

At the end of 48 months, the Bitcoin acquired through cash flow reinvestment will be liquidated. Investors will receive their initial capital back while retaining ownership of both the real estate and their original Bitcoin investment.

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The innovative approach, combining the traditionally stable real estate market with the often unpredictable cryptocurrency market, raises questions about its feasibility: Can this unconventional strategy truly yield the desired results?

Yoann Dorat, a real estate agent at One Sotheby's International Realty in West Palm Beach, Florida, believes it may work.

"It's an interesting concept, like mixing two different worlds: one that's known for steady appreciation and reliable returns and another that's, well, the Wild West," Dorat said. "If you're comfortable with both real estate fundamentals and the roller-coaster nature of crypto, it might be worth exploring."

Cardone emphasizes the significant returns he has achieved with his Bitcoin investment. In 2013, he received 100 Bitcoin for a speaking engagement in Las Vegas, a relatively small sum then valued at about $500. Today, that investment has yielded a remarkable return, with the current value of those Bitcoins estimated at around $10 million.

"I didn't even know what Bitcoin was, but I was like, ‘Let's do it,'" he said.

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Cardone's Bitcoin Real Estate Fund Targets Space Coast 

Cardone's Bitcoin real estate fund will focus on properties along Florida's Space Coast, a region renowned for its proximity to the Kennedy Space Center and Cape Canaveral.

The 72-mile stretch of coastline encompasses communities like Cocoa Beach, Melbourne and Titusville, offering a diverse range of housing options from $99,000 starter homes to luxury properties exceeding $6 million.

Cardone acknowledges that Musk’s SpaceX presence was a significant factor in his decision to invest in the region.

"I love Elon," said Cardone, whose investment firm owns about 10,000 units in Florida. "In one of our apartment buildings, where the average rent is $1,859 monthly, you can watch rockets from your patio."

Blue Origin, the private space company founded by Bezos, has invested over $1 billion in the Space Coast, enhancing the region's appeal to investors and homebuyers.

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Cardone's real estate fund is likely to appeal to two main audiences:

  Traditional real estate investors unfamiliar with decentralized finance (DeFi): These investors may be interested in the fund to gain exposure to cryptocurrency without having to directly invest in Bitcoin or other digital assets.

  Crypto enthusiasts who are interested in using their cryptocurrency holdings to invest in real estate: These investors are unlikely to be interested in the fund's current structure, which involves converting Bitcoin into cash to purchase real estate. They would likely prefer to be able to use Bitcoin directly to purchase property or obtain crypto mortgages.

"As more investment models incorporate Bitcoin with traditional assets, adoption is likely to grow across diverse investor profiles," said Ronen Cojocaru, CEO of 8081.io, a web 3.0 fintech digital asset trading company.

Cardone's Bitcoin real estate fund is limited to accredited investors with a net worth of at least $1 million or an annual income exceeding $200,000 for the past two years.

However, Cardone aims to change this Securities and Exchange Commission (SEC) requirement, advocating for equal investment opportunities for accredited and nonaccredited investors. He believes that people with smaller amounts, like $5,000, should have the same access and argues the SEC shouldn't dictate investment decisions.

Cardone plans to launch 12 similar funds by April.

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