Blog: Tom Nash on Grant Cardone: Did the 10X King Just Lose $300 Million? - 2020-04-03
As we reported yesterday, Grant Cardone offered his tenants a deal: If they paid 12 months rent in advance, he would credit them for 15 months of rent. In this video, Tom Nash offers the opinion that Grant Cardone's rent concession constitute an effective $300 million devaluation of his real estate portfolio. At the jump we post another video from Jeff and Paul where the downside of Cardone's high-debt investment strategy is critiqued.
In our opinion, Cardone is making his 12-for-15-rent-prepay offer in an attempt to accomplish three things:
1. To buy time and bring in as much cash as possible right now. This is Cardone's number one goal as we see it. Cardone Capital needs to put off, for as long as possible, the cash flow problems caused by a financially untenable threshold of Cardone's tenants not paying rent due to the COVID-19 pandemic. Cardone's rent concession suggests that Cardone Capital simply does not have the cash reserves to absorb this downturn. Cardone has said that he plans for 85% occupancy, which is 15% vacancy. In a good economy this seems a valid assumption of premium apartment units. In a catastrophe, however, all assumptions are annihilated by the brutal reality of the actual situation.