In September 2020, when the first class action lawsuits hit Scientologist Grant Cardone and Cardone Capital, we sat down with the numbers. We looked at Cardone’s own statements about his ten-year loans with five years of interest-only payments. We looked at the debt load. We ran the amortization schedules. And we asked a question that we believe has now answered itself.

We wrote at the time:

“In October 2025, Cardone’s yearly interest-only payments jump from $54 million ($4,500,000 per month) to $119 million ($9,916,666 monthly). This happens because principal and interest are now due. In 2026, Cardone’s annual principal and interest payment screams up to $316.2 million. This is $26,333,333 per month.”

We also asked: “Is Cardone caught in a trap in which he must buy more and more apartments — and therefore incur increasingly greater amounts of debt — in hopes of remaining solvent?“

It is now February 2026. The debt wall has arrived. And Grant Cardone’s behavior over the past fourteen months tells us everything we need to know about how that question has been answered.

The SEC FILINGS DON’T LIE

Grant Cardone can say whatever he wants on Instagram and Fox Business. We don’t place reliance upon anything Grant Cardone says. We read his SEC filings instead — where the details are buried.

From random samples, here is what two of those filings show:

As of June 2024, Cardone Equity Fund 24 had raised only $52.5 million against a $150 million target — falling 65% short of its fundraise goal.

As of September 2024, Cardone Equity Fund 25 had raised only $28.5 million against a $150 million target — falling 81% short.

Charting all funds is in progress, as is debt load estimates, and risk profiles.

CARDONE REIT 1 LLC

Cardone REIT 1 LLC  — the very investment vehicle Cardone told his followers never to invest in when other people offered them in 2019, before launching his own REIT in 2022 — has been losing millions of dollars in both 2022 and 2023 according to its Form 1-SA filed with the SEC on September 29, 2023.

Cardone REIT 1 LLC did not get any better in the 2025 SEC Form 1-SA:

Net loss H1 2025: ~$5,127,010 (improved slightly from $6,825,674 in H1 2024, but still deep red)

THE 10X BROS ARE TAPPED OUT

The Reg A pipeline that once let Cardone raise money from unsophisticated investors by making YouTube videos promising 15% returns has dried up. The SEC told him to remove those projections. He removed them from the offering circular but kept promoting them on social media. And on June 10, 2025, the U.S. Ninth Circuit Court of Appeals told him exactly what we had been saying for five years:

The Ninth Circuit Weighs In: Pino v. Cardone Capital

The Ninth Circuit’s opinion in Pino v. Cardone Capital, LLC, No. 23-3512, reversed the district court’s dismissal of the class action brought by the late Luis Pino’s daughter Christine Pino, represented by Susman Godfrey LLP.

Judge Margaret McKeown wrote that Cardone’s reaction to the SEC letter — removing the 15% IRR projections without rebuttal or comment — was evidence that Cardone himself did not believe the projections he was making to investors. The Ninth Circuit found that Pino had adequately alleged both subjective and objective falsity. That Cardone’s projections lacked a basis. That no prior funds had performed to this level. That the properties for the Funds had not yet been purchased when the projections were made.

The Ninth Circuit also found that Cardone’s failure to disclose the SEC letter to investors was a material omission. The court called Cardone’s argument that the SEC letter was publicly available a “backhanded effort to get around” the disclosure requirement.

This case is now back in district court and proceeding. Grant Cardone is being represented by King & Spalding LLP. That is not cheap.

And while this live securities class action proceeds, Cardone is out on Fox Business telling new investors they can expect 35% annual returns from his latest invention.

CARDONE’S BITCOIN PIVOT: INNOVATION OR DESPERATION?

In December 2024, Cardone Capital launched what it calls “Bitcoin-Real Estate Hybrid Funds.” There are currently three:

The 10X Space Coast Bitcoin Fund: 300 apartment units in Melbourne, Florida combined with $15 million in Bitcoin. Minimum investment: $250,000.

The 10X Miami River Fund: 346 apartments on the Miami River combined with $300 million in assets.

The 10X Boca Raton Bitcoin Fund: $100 million in Bitcoin combined with 366 apartment units purchased out of a Blackstone bankruptcy for $230 million.

Cardone announced in late 2024 that his funds added $72 million in Bitcoin in October and November alone. He has stated a target of 4,000 BTC, which would make Cardone Capital one of the largest non-mining corporate Bitcoin holders. He put the Bitcoin logo on his private jet.

This is being sold to the public and to crypto media as financial innovation. In our opinion, it is the opposite. It is what a heavily leveraged real estate syndicator does when his existing investor base can no longer fund his operations.

Here is the same self-dealing cycle, which has not changed since we first documented it in 2020:

Step 1: Grant Cardone purchases a property with his own money. 

Step 2: Cardone sells the property to his own captive fund — a Cardone Capital entity that can only buy properties from Grant Cardone.

Step 3: Cardone charges the fund 6% interest on the money he used to “pre-fund” the purchase.

Step 4: Cardone collects a 1% acquisition fee from the fund for acquiring the property he just sold it.

Step 5: Investor money repays Cardone his upfront capital. All debt and risk transfers to the fund and its investors.

Step 6: Cardone locks up investor money for 7-10 years and pays distributions of 4-5% — when he’s not suspending them — which is roughly what any American can get from a Certificate of Deposit at their local bank without locking up their money or assuming any real estate risk.

Step 7: When the property eventually sells, Cardone takes 35% of the profits as sole owner and manager of Cardone Capital.

The Bitcoin overlay does not change this cycle. It adds a new marketing hook for a new audience — crypto investors — because the old audience of 10X bros has stopped writing checks. The SEC filings prove this.

THE BLACKSTONE BANKRUPTCY PROPERTY: WHAT ACTUALLY HAPPENED 

Cardone’s Boca Raton deal — 101 Via Mizner, a 14-story, 366-unit luxury building in downtown Boca — has been widely presented as Cardone scooping up a distressed asset at a bargain. The bankruptcy filings, analyzed in detail by LRL Financial in their August 2025 deep dive tell a different story.

The building was owned by Penn Florida Companies, a Boca Raton developer that was collapsing across its entire portfolio in 2024. Multiple Penn Florida properties faced foreclosure. An affiliate of Blackstone held the $195 million loan on 101 Via Mizner, maturing December 2024. Penn Florida could not refinance — not because of bad luck, but because the property’s annualized net operating income was only $8.3 million. That is a 3.5% cap rate on the $235 million purchase price. The NOI could not support anywhere near $195 million in new debt. A significant paydown would have been required, and Penn Florida did not have it.

When Penn Florida defaulted, Blackstone initiated a UCC foreclosure on the equity interests of the owning entity — a faster path than traditional real property foreclosure in Florida. Penn Florida responded by filing Chapter 11 in January 2025 to trigger the automatic stay and buy time. This was not a Blackstone bankruptcy. It was a debtor’s defensive maneuver.

Cardone emerged as the stalking horse bidder at $230 million. The only other bidder, Crescent Heights — a highly experienced South Florida developer — offered $236.5 million but withdrew after requesting more time to study the condo conversion process. Crescent Heights walking away from this deal is telling. They know this market as well as anyone.

Cardone bumped his bid to $235 million. The sale closed July 18, 2025.

THE NUMBERS DON’T WORK AS APARTMENTS

LRL Financial’s analysis demonstrates why. With in-place Net Operating Income of $8.3 million and the building only 84% leased at the time of sale, the property generates a 3.5% yield on cost. Even at a pro forma 95% occupancy, the unlevered yield on cost reaches only 4.4%. Meanwhile, Arbor Realty provided a $155 million bridge loan — a three-year term. That bridge loan makes the property cash flow negative from day one. LRL estimates debt service coverage at just 1.05x even on pro forma numbers, which is why a $15 million paydown was required to bring the loan to $140 million.

This deal does not work as a multifamily hold. The only path to returns is a condo conversion — selling 366 individual units into a Boca Raton luxury condo market where inventory was up 50% year-over-year through June 2025 and days-on-market exceeded 300 days for high-end units. LRL’s comp analysis puts a realistic price ceiling at $950/SF and a base case of $850/SF — far below CBRE’s $1,250/SF estimate in a July 2025 valuation commissioned by the parties. CBRE valued the asset at $334.5 million. The market, as expressed by actual bidders, valued it under $240 million.

Most telling: LRL’s scenario analysis shows that in many outcomes — including the base case — the levered IRR is lower than the unlevered IRR. The Arbor bridge debt is not accretive. It is adding risk without adding return.

THE BTC CALL OPTION

Cardone formed a joint venture with Penn Florida — Mizner 366 JV LLC — in which Cardone holds 92.6% and Penn Florida retains 7.4%. Penn Florida did not contribute new cash. The JV holds both the property and $100 million in Bitcoin. The operating agreement gives Cardone a call option on Penn Florida’s interest in the Bitcoin at cost basis — meaning Cardone takes all the BTC upside. Penn Florida and Cardone’s investors bear the downside.

As LRL Financial concluded: the Bitcoin component adds volatility and marketing appeal but also something else — liquidity. Bitcoin can be bought and sold at any time. Real estate cannot. For a syndicator facing a debt wall, having a liquid asset on the books creates options that illiquid apartment buildings do not.

In our opinion, the Bitcoin is not a hedge. It is a liquidity bridge. And the Via Mizner deal is not a bargain acquisition. It is a cash-flow-negative property with a three-year bridge loan, dependent on selling 366 condos into a cooling market. As LRL Financial put it: buying a distressed asset does not always equate to acquiring it at a favorable basis.

Let us return to where we started. In 2020, we calculated what happens when Cardone’s interest-only loans convert to principal-and-interest. We noted that Cardone claimed $1.8 billion in assets under management at the time, leveraged at approximately 80%, yielding $1.44 billion in debt.

Cardone Capital now claims $5.1 billion in assets under management on over 14,000 apartment units. We do not know the current leverage ratio. But Cardone has consistently used leverage of 75-82% of acquisition price, as disclosed in the REIT’s SEC filings. If we conservatively assume 75% leverage on $5.1 billion, Cardone’s debt load is approximately $3.825 billion.

The loans Cardone took out during the 2020-2022 period — when interest rates were near zero — are ballooning now. Interest rates have not returned to those levels. The Fed rate cuts have brought some relief, but a refinancing at 2025-2026 rates is materially more expensive than the original terms.

We documented this risk in 2020. We documented it again in 2023 when we wrote about the Pino case as an existential threat. We pointed to the collapse of Jay Gajavelli’s 7,000-unit Applesway multifamily syndicate — financed by small investors and cheap interest rates, destroyed when rates rose — as a warning of what could happen to Cardone and syndicators like him.

That warning remains operative. 

WHAT THE BITCOIN HYPE OBSCURES

While Grant Cardone is on Fox Business praising President Trump and talking about tokenization, here is what is actually happening:

1. A live securities class action is proceeding in federal court after the Ninth Circuit found that Cardone may not have believed his own return projections and failed to disclose the SEC’s objections to investors. The securities law community has taken notice. In a June 2025 legal alert, the national law firm Barnes & Thornburg LLP analyzed Pino v. Cardone Capital not as a Cardone-specific problem but as a precedent-setting opinion with implications for every public company that receives an SEC comment letter.The firm warned its clients that the Ninth Circuit’s reasoning — that Cardone’s silent compliance with the SEC’s demand to remove the 15% IRR projections, while pushing back on other SEC comments, was evidence that Cardone did not believe his own projections — creates a new legal risk.Barnes & Thornburg is now advising companies to consider adding preemptive disclaimer language to SEC response letters stating that compliance with a comment should not be construed as agreement with it.

   When a major law firm tells its entire client base to change how they respond to the SEC because of your case, you are no longer dealing with a nuisance lawsuit. Pino v. Cardone Capital is being treated as landmark securities law.

2. Cardone’s fundraising from traditional Reg A investors has collapsed by 65-81% per his own SEC filings.

3. Cardone REIT 1 LLC is losing millions of dollars.

4. The balloon payments on Cardone’s debt are arriving on schedule, exactly as we calculated in 2020.

5. Cardone is now seeking capital from crypto investors who may not be familiar with his history of self-dealing, class action litigation, and SEC problems.

6. Cardone is projecting 35% annual returns on the hybrid funds while a federal court has found that his prior 15% projections lacked a reasonable basis and that he likely didn’t believe them himself.

In our opinion, Grant Cardone’s pivot to Bitcoin is not a sign of financial innovation. It is a sign that the debt wall we predicted in 2020 has arrived and that Cardone needs new money and is engaging in what L. Ron Hubbard called “unusual solutions.”

Unusual solutions are not a good thing in Scientology.

Grant Cardone’s crypto-apartments cocktail is loaded with debt for investors and no-risk cash for Cardone.

A NOTE ON GARY CARDONE

We have covered Gary Cardone extensively on this blog, including in connection with the FTC and State of Florida action against Gary and his ex-wife Monica Eaton over the business practices of their company Chargebacks911. Gary has since exited operational control of Chargebacks911; Monica Eaton now serves as CEO. Whether Gary retains a passive investment interest is unknown to us.

What is known is that Gary Cardone was the seed money behind Cardone Capital. Gary made his fortune in European energy markets — particularly UK pipelines. In our long experience covering the Cardone brothers, we have always considered Gary to be the brains and the financial architect, and Grant to be the showman and front man.

This distinction matters because the question of where Cardone Capital’s initial capital came from — the money Grant uses to “pre-fund” property purchases before selling them to his own captive funds — is central to the self-dealing allegations. If that seed capital is Gary’s money, then the self-dealing cycle we have documented is a family operation, not a solo act. The SEC filings for the earlier funds confirm that the “pre-fund” loans came from “an affiliate of the Manager” — i.e., Grant Cardone. But whose money Grant was using is a question that, in our opinion, deserves closer examination.

THE BOTTOM LINE

 Having watched Grant Cardone since he emerged on social media, our read of him now is that he would trade all of his real estate holdings and debt for Bitcoin. Gary Cardone did a video in which he said that if one owned a Popeye’s Chicken franchise the problems are overhead: salaries, food, maintenance, and even the risks of lawsuits. Gary Cardone said the beauty of crypto is that it has no overhead: you just buy it and hold it.

This is yet another reason Gary seems to be the smarter of the Cardone brothers. 

We will continue to monitor the SEC filings, the Pino class action, and Cardone Capital’s fundraising activities. As always, we recommend that anyone considering an investment in any Cardone Capital fund read the actual SEC filings rather than watching Grant Cardone’s social media videos. The disclosures buried in those filings tell a very different story than the one Cardone tells on Instagram.*

Stay tuned.