What is Cadre Real Estate?

Cadre real estate may be new to the crowdfunding real estate game, having only entered the market in 2015.

However, despite being so new, it has already made an impact in the real estate investment world.

If you have not yet heard of Cadre, it could be just what you have been looking for!

So, what exactly is Cadre, and could be the investment strategy that is perfect for you?

What is Cadre real estate and how does it work?

Cadre is a new real estate crowdfunding company that provides investors access to the best commercial real estate projects available. According to the Cadre website, it allows anyone who is wanting to become a passive real estate investor an opportunity to invest money while minimizing the risk that usually comes with trading online. Cadre screens all potential investments rigorously. So investors know that their money is being invested in legitimate properties. All opportunities have a minimum investment size of $50,000, and unlike traditional private investments where your money is locked up for years, you are able to sell your Cadre investments after only 6 months.

It is also very easy to become a real estate investor through Cadre. There are two ways to invest: direct access and deal-by-deal. The main difference between the two is that direct access is automatic, where your investment will be spread out and distributed throughout various investments. This option is perfect for those who do not have any particular care about where their money is. If you prefer to have more control over where your investment goes, you would be better off with deal-by-deal.

With that being said, Cadre is not for everyone. In order to begin investing, you will need to be accredited and already have a high net worth. But if you meet the requirements, Cadre could be a quite lucrative option for you.

What are the pros and cons of Cadre in real estate?

Cadre may not be for everyone, and like all investment opportunities, it will come with its pros and cons. Millionacres lists some of the main pros and cons of Cadre as the following:

Pros

• Cadre executives and employees all invest themselves with every deal. This way you can be confident that each option is a good investment. Many investors find it reassuring to know that Cadre are so confident in their investment opportunities that they will only host ones that they themselves would invest in.
• High potential for liquidity. Assets can be sold after only 6 months.
• They are a leader in opportunity zone investments for those that want to invest in distressed areas of the USA to boost economic growth. In addition to being ethically responsible, there is also a tax incentive for these investments.

Cons

• Investments are only open to accredited investors who have a net worth exceeding $1 million and an individual income of over $200,000 (or joint income of $300,000).
• Initial investments are very high, starting at $50,000 as a minimum.
• Low deal flow - averaging one new deal per month.
• Only US investments currently available. There is no opportunity for overseas investments at this time. It is unclear whether this will change in the future.

As can be seen, Cadre is really only for those who are already experiencing wealth and are looking to grow it even more. If you do meet the requirements then it could be a good investment strategy for you, and the pros would likely outweigh the cons.

Is Cadre a good investment?

Cadre is too new to have detailed information to back up whether or not they are a good investment. One thing that Cadre prides itself on is that they are a long-term investment platform. So the fact that there have not been any major returns in the seven years it has been around is not shocking. Millionacres mentions that as of February 2021 there have only been four realized standalone investment deals. And all of these deals made their investors' money. This is a very good sign that Cadre is a sound investment strategy. As long as Cadre keeps going up with the current momentum, then it will be looking good for all current and future investors.

While there is never any investment strategy that has guaranteed returns, the fact that Cadre only accepts those with high net worth and vets every investment opportunity before it makes it to its site means that it appears to be much lower in risk than similar crowdfunding companies.

Is Cadre safe to invest with?

The concern for many people investing such high amounts of capital in such a young company is whether or not the investments are legit, and whether they are safe. There are of course risks with any investment strategy, however the overall consensus is that Cadre is among the best crowdfunding real estate platforms out there. Investor Place did a review on Cadre and determined that it is a legit and safe platform to invest with, and mentions that so far there have not been any noteworthy complaints against the company in regard to fraud or investment malpractice.

There is also the fact that you need to have a remarkably high net worth in order to invest with Cadre, so this in itself lowers the overall risk. $50,000 sounds like a lot of money to invest for the average person. But for someone already worth millions, it is decidedly a smaller investment in comparison. According to Cadre, they have a projected return of between 10-15%, which is much higher than many other investment opportunities.

What is Cadre Cash?

Cadre Cash is a new feature just released by the Cadre platform in September of 2020. Essentially, it is a cash savings account exclusively for Cadre. It gives users an annualized reward of 3% cash back, which is currently about four times more than the leading national bank chains. These rewards are available to be received monthly, based on the amount that you currently have invested in your Cadre account.

Cadre Cash aligns with Cadre’s goal of making commercial real estate investing more accessible to people without experience in the industry, offering cash incentives to those who are using the app to organize, invest and advance their real estate portfolio.

Currently, Cadre Cash allows its accounts to be insured via the Federal Deposit Insurance Corporation, offering protection for up to $750,000 (Source).

What is the Cadre Direct Access Fund? 

Like with the introduction of Cadre Cash, the Cadre Direct Access Fund aims to make commercial real estate investing a simpler and more accessible option for those who are new to real estate investing. This fund contains a curated selection of properties that have a good liquidity potential, a lower minimum, and lower fees.

Especially when new to the real estate industry, it’s important to have a wide range of low-risk properties that have a strong guarantee of getting a reward back. With the Cadre Direct Access Fund, you can easily browse and save commercial properties that have been proved to be the lowest-risk options with the largest guarantee of getting future returns on your investment.

Part of the Cadre Direct Access Fund is the “Cadre 15”. The Cadre 15 refers to areas that Cadre researchers believe are experiencing the highest growth levels, and therefore are considered strong performers going forward. This direct access fund will also focus on areas that Cadre’s research team believes have high potential of growth, including multi-family residential properties.

Here are some other things the Cadre Direct Access Fund focuses on:

Cash Flow:

Cadre looks for properties that have stable, long-term tenants, to help cement a positive cash flow going forward. This helps reduce your risk of losing money on your investment, and Cadre will take care of all of the research for you.

High-Quality Commercial Assets:

This fund focuses on industrial-quality, established properties that can range in value from $50m to $100m. As we’ve mentioned before, Cadre requires quite a high capital in order to even begin investing, and this is a large reason why.

Dislocation:

The Cadre Direct Access Fund looks specifically to purchase properties that are currently dislocated by the target market, typically from COVID-19. By doing this, Cadre can purchase assets at a discount to the replacement cost (Source).

Frequently Asked Questions

What is Josh Kushner's connection to Cadre?

Answer: CEO Ryan Williams started the company with Joshua Kushner.

Is Cadre a REIT?

Answer: No. When you invest in a REIT, you're investing in a portfolio of real estate assets. The REIT can own many types of commercial real estate. Cadre, on the other hand, is a financial technology company. They use machine learning and predictive analysis to evaluate a variety of real estate. From there, investors can make fractional investments on a real estate deal.

Is Cadre good for quick returns on investments?

Answer: In short, no. While Cadre’s turnaround time for liquidity is great- as we already discussed, assets can be sold six months after purchasing-, the average Cadre investment can take five years to complete. For this reason, Cadre is better suited to people who are looking for long-term passive income, not a quick cash return.

How strong are Cadre investments?

Answer: Cadre investments are considered very strong. Cadre has returned $168 million in gross distributions to investors, and has delivered a net IRR of 18.2% across it’s fully realized investments. In 2020, it’s rental collection rate averaged at 95%, which is considered quite successful especially amid the Coronavirus pandemic (Source).

Can foreign investors use Cadre?

Answer: Yes. While all of Cadre’s properties are currently U.S. based, foreign investors are still allowed to create accounts and participate in purchasing commercial properties.

Can individual investors use Cadre?

Answer: Yes. Cadre is available to both individual investors and financial advisors. When setting up your account, you will need to specify which type of investor you are.

Conclusion

Cadre may not be for everyone, but for those that it is suited to, it is looking to be a very sound investment strategy. If you meet the criteria and are looking for a low risk, high return way to invest large amounts of capital over a long period of time, then chances are Cadre will be perfect for you. It is a new company, but it has grown tremendously in the short amount of time it has been around. And it only looks to keep climbing- so now is the time to decide if you want to become a part of it!