Grant Cardone is the founder and CEO of Cardone Capital, a firm that manages approximately $5 billion in real estate. And he just introduced a new fund that invests real estate generated cash flow in bitcoin (BTC).
“No one else has ever done this at scale. No one has ever done this particular model,” Cardone told CoinDesk in an interview. “And the response from our investors is phenomenal.”
“There is a friend of mine who has known me for 15 years. He has never invested a penny with me. He has never bought any bitcoin either. He told me bitcoin was too risky and real estate was too slow. When I showed him the fund, he put $15 million into the deal,” Cardone said.
How does it work?
For his pilot project, Cardone bought an apartment complex on the Space Coast in Melbourne, Florida, for $72 million and plowed an additional $15 million in bitcoin into the fund for a total of $88 million. The cash flow generated by the property will be dollar-cost averaged in bitcoin every month for the next four years — or at least until the fund’s asset ratio, currently 85% real estate and 15% bitcoin, shifts to 70% real estate and 30% bitcoin.
If the top cryptocurrency, now trading at $104,000, reaches the $158,000 mark within a year, the entire fund will grow by 25% in value. If it reaches $251,000 in two years, that number shoots up to 61%. Cardone’s projections assume that bitcoin will hit $1 million per coin within the next five years, and continue to rise thereafter.
And his ambition is to roll out 10 other such projects before June for a total investment of 1 billion. If bitcoin rises according to Cardone’s projections, Cardone Capital could end up with a bitcoin reserve potentially worth hundreds of millions of dollars on the back of its real estate cash flow alone.
Taking a page out of Saylor’s book
Cardone has been buying real estate for 30 years and is famous for it with over 4.8 million followers on Instagram, 2.7 million on YouTube and 1.1 million on X. Cardone Capital manages 15,000 units – 6,000 of which belong to Cardone himself , and 9,000 of them have been crowdfunded across 18,400 investors, accredited or not. The firm pays out $80 million a year in dividends, and its last six deals were all paid in cash. “We don’t take institutional money,” Cardone said. “No sovereign wealth funds, no Wall Street.”
“I’m definitely a risk taker, but I’m a real estate agent, so compared to the degenerates in the blockchain industry, I’m so conservative, it’s unbelievable,” Cardone said. Despite studying bitcoin for seven years, he didn’t see a way to combine real estate and bitcoin until MicroStrategy ( MSTR ) co-founder Michael Saylor suggested the model to him. “This is really a version of what he’s doing at MicroStrategy,” Cardone said.
One of the advantages of the real estate bitcoin fund is that it allows the company to raise capital much faster. Not only are investors on board with the initiative, but Cardone has plans to issue corporate bonds to get some long-term, cheap money and to some extent replicate Saylor’s convertible note formula.
He also wants to put a joint pledge against the projects. Bitcoin loan products don’t exist yet, he noted, but Cardone expects that to change after he’s done plowing hundreds of millions of dollars into these hybrid projects. “$700 million property paid for with cash, $300 million worth of bitcoin and no debt. Who wouldn’t give me a $500 million loan for the combination?” he said. “I’m talking about very friendly long-term debt, no margin calls. Seven to 10 years.”
Not to mention the possibility of the company going public, which Cardone says could happen in 2026.
Cardone plans to buy bitcoin in a price-agnostic way – meaning he won’t be focused on buying dips, but will simply buy bitcoin within 72 hours of the monthly distributions coming in. The company also will not take exposure to bitcoin through any exchange-traded funds (ETFs); the plan is to hold the cryptocurrency through an institutional custodian bank.
Does he ever plan to sell? Not in the near future. But he remains concerned about the growing craze surrounding cryptocurrencies.
“Where I am in my life, I can take this chance. I don’t need more cash flow,” Cardone said. “But if you’re 25 years old and you’re trying to get some cash flow for life, bitcoin is not a solution. It’s a bet, it’s a gamble, and you have to pay rent, you have to take care of your family, you have to pay your bills. And bitcoin just doesn’t.”
