Cadre: Comprehensive 2018 Review and Ranking
What is Cadre?
IMPORTANT COVID-19 UPDATE: this info was posted before anyone knew we would be facing a global pandemic in the spring of 2020. So it may be missing crucial information necessary to making an effective investment today. Some of the information in it may be dated, no longer accurate and/or irrelevant. For information on analyzing investments in this new era, see: "How will Covid-19 / Coronavirus Affect my Alternative Investment Portfolio?"
Cadre is a platform that claims on its public website to specialize in commercial real-estate (CRE) investments.
Unfortunately, Cadre refused to answer all questions for this public review.
Almost every other platform is overjoyed when they're considered for a review and usually bend over backwards to answer everything they can.
A few are similar to Cadre and go with "no comment". As a group, these others haven't had the most spotless or stellar track record:
iFunding: Ultimately declared bankruptcy and became unable to properly administer investor money in their fund. More recently accused by the SEC of defrauding and misappropriating $1.17 million of investor money
Prodigy Network: Investors claim 40% losses on one deal and zero distributions on another. Principals have accused each other of stealing $2.5 million.
Fundrise "v1.0": (This was the first version of the company that used to offer accredited investor deals). The CEO was ultimately ousted, fired and/or resigned. The CFO was ultimately accused by the company of blackmailing them over alleged financial improprieties in the company and fired. And the entire accredited offering business model was ultimately shut down and abandoned.
Harvest Returns: A newer platform that investors allege appears to have significant "investor interest" challenges. (Review coming shortly.)
So since I cannot post anything about Cadre from my own
experience, I am instead focusing this review on what Fortune Magazine and Bloomberg News have to say about them.
Fortune Magazine: "Falsely Boosted Profits"
In March 2018, Fortune Magazine published an article about Cadre which claims the company benefited from falsely boosted profit on one of its claimed proof-of-concept deals.
Kushner Cos. filed at least 80 documents for 34 properties across New York City, including three buildings in a gentrifying neighborhood in Queens that the company bought in 2015. The paperwork, filed between 2013 and 2016, claimed that none of the units were rent-regulated, however more than 300 of the units were rent-regulated, according to tax documents.
For Cadre, the project with Kushner Cos. was the first deal it handled from start to finish. The startup’s role in working on the three buildings in Queens, which sold in 2017 for nearly 50% more than Kushner Cos. paid for them, was touted as a proof-of-concept for its business model."
Bloomberg Financial: "Benefited from Misleading Rent Filings"
Bloomberg Financial News reported even more information on this deal:
Cadre, the real estate investing startup co-founded by White House senior adviser Jared Kushner, was the primary beneficiary of a property-flipping investment that may have been less profitable if it had fully complied with New York City disclosure rules about rent-regulated tenants.
Cadre owned about 60 percent of three rent-regulated buildings in Queens sold by Kushner Cos. in April 2017. The $59 million price tag was an 80 percent premium over what they paid in January 2015, property records in New York show. It was the first known deal that Cadre, then a fledgling company, took from purchase to sale, and the high rate of return in a short time was touted as a proof-of-concept for its web-based investing platform.
Kushner Cos., Cadre’s operating partner at the properties, told the city the buildings had no rent-regulated tenants when applying for construction permits to update the buildings in 2015 but tax records filed later showed almost 100 such residents, according to a report by the Associated Press. The number of tenants fell precipitously prior to the buildings’ sale, the wire service reported.
Residential buildings with rent controls are worth less than those without and can merit greater oversight by New York City during construction.
How does Cadre work?
Unfortunately, Cadre refused to provide the answers to this for a public review.
What are Cadre Pros and Cons?
Advantages: Unfortunately, Cadre refused to provide the answers to this for a public review.
Disadvantages: Significant negative info in financial press. Would not answer site questions. Unfortunately, Cadre refused to provide the answers to anything more for a public review.
For more raw data on other sites (including investor and sponsor fees, legal structure etc.), or to easily compare competitors, see the feature by feature comparison matrix.
Is Investing In Cadre Legal?
Unfortunately, Cadre refused to provide the answers to their legal structure for a public review.
What does a Cadre deal look like?
Unfortunately, Cadre refused to provide the answers to this for a public review.
For those investing in Cadre, you may wish to see how I pick deals in general at: The Conservative Investors Guide to Due Diligence.
Where can I discuss other Cadre deals?
You can do this with thousands of other investors in the private investor club. While the club is free, membership is restricted to investors who have no business connections to sponsors or platforms. Also, all members must agree to keep all club info confidential by signing a nondisclosure agreement. Click here to join or get more info.
Who are Cadre Competitors?
Here are the reviews and rankings for other similar sites.
How do I invest in equity and/or debt?
Looking to learn more about real-estate investing?
How to pick? Check out our step-by-step guide.
Top 100+ accredited investor sites (ranked and reviewed)
Code of Ethics: To maintain objectivity, I do not accept any money from any sponsor or platform for anything (including affiliate ads, advertising etc.). See code of ethics for more.
Personal opinion only: All info is my personal opinion only as an investor. I am not a registered financial advisor, attorney or accountant. Always do your own due diligence and consult with your own licensed professionals before making any investment decision. Information is believed to be correct but may have errors, so use at your own risk. If you find an error, please let me know.
Rankings/rating are general: In my opinion, every investor comes from a different risk tolerance and financial situation, so there's no such thing as a single investment or platform that's great for everyone. There are many deals that aggressive investors love, which I won't touch, and vice versa. And every investor has their own way of doing due diligence. I believe there's no one right way to do it.
So, the site rankings/ratings are based on criteria which I feel are important to the broadest range of investors (transparency, volume, bankruptcy protection, etc). And even though I have my own personal, conservative, due diligence method (and talk about how the site's deals measure up in the "deep dive section"), I don't use my personal criteria as a factor in the rankings. So for example, a high ranking/rating doesn't mean that I would personally invest in a site (and vice versa). Click here to see what's in my own portfolio.
About Ian Ippolito
Ian Ippolito is an investor and serial entrepreneur. He has been interviewed by the Wall Street Journal, Business Week, Forbes, TIME, Fast Company, TechCrunch, CBS News, FOX News, USA Today, Bloomberg News, Realtor.com, CoStar News, Curbed and more.
Ian was impressed by the potential of real estate crowdfunding, but frustrated by the lack of quality site reviews and investment analysis. He created The Real Estate Crowdfunding Review to fill that gap.
Have you used the above site before? What was your experience?
This site has been ranked and reviewed as part of our in-depth, 100+ site industry review. All data is believed to be correct, but may have mistakes. Please contact us if you notice one. All non-data (including rankings, investor comment summaries, etc.) are my opinion only. I'm just an investor and not an attorney, accountant, or certified financial advisor. To maintain neutrality: I do not own a portion of any of the companies reviewed.