The Bigger Pockets community had the same issues you did at first. They thought 5.5% was far too high compared to other funds. But once they found out there were no other hidden or transactional fees, it made a little more sense. In fact, one poster who manages a review site for various Crowdfunds said it's actually quite cheap.
The fee structure does not matter.
He can charge whatever fee he sees fit as the syndicator. There is no syndicator who will charge .8%. Are you insane? It doesn't work like that. No one will charge that. Doesnt matter if you are trying to raise 500k or 200 million.
Anyone who is even just starting out will not do this.
Cardone is managing 1.3 billion now. Do you think when Cardone was starting out managing he said "oh this aint much i should charge .8%"
He didnt just happen to have 1.3 billion fall in his lap to say now I can charge this much. Thats not how that game works.
Jay's problem is he needed to do what Cardone did and get the bigger accredited investors on board first, build his holdings, which would in turn get him the credibility and then reach out to non accredited investors.
Now it just looks like one big money grab.
I know what hes trying to do hes just not presenting it right.
Been looking more into this Cardone Capital.
I’ll be honest with you, on first look at the website, it too, comes off as scammy.
When I do a quick google search you have people asking “is it a scam”.
This is really out of the ordinary for a fund that invests in financial products so this is all really knew to me because googling a hedge fund or mutual fund and having the words “scam” accompany it would never happen.
I think the issue is, real estate, in general, attracts a wide variety of people that are hustlers. Real estate doesn’t have a high barrier to entry like upper levels of finance. So, in general, the people are not high pedigree (went to top schools, worked in “prestige” positions in finance, have credentials behind their names). A lot of these folks in real estate are just hustlers that are great at sales. And this is the issue, the way that they present themselves is “salesy” and that strikes people as scammy. That is Cardones issue and that is TREFs issue. They are not operating like normal funds and so I have to keep that in mind.
Most funds list it’s management team on their websites with full biographies. As an investor, I want to know that management has the experience and credentials behind them in managing my money. So I would want to see a shytload of Wharton, Booth, and Columbia MBAs, CFAs and CPAs and work experience at the Citadels, Goldman, Bridgewaters.
Cardone does list its management team but their biographies are missing. So when I go and look up their individual LinkedIn biographies it becomes apparent why, this industry is just different in that it attracts colorful people whose backgrounds are all over the place. And may be a turnoff for someone who wants their money managed.
Anyway, it seems like he’s successful so that was much ado about nothing.
For the record, Cardone Capital charges 3% not 5.5%.
And apparently TREFs management fee has indeed set the alarm and it appears he may be paying folks to address it.
5.5% management fees and 50% of the profits
The argument this guy gives justifying the fee is weak. The fact that he’s dismissing it as black people wanting things for free is ridiculous.
And when he mentions the 2/20 fee is increasing, that is a lie. It is well known 2/20 fee structure is eroding industry wide because investors know that even that fee structure is too high and are pulling their money out of funds because of it.
You, Bigger Pockets and a few other sites keep mentioning “no hidden fees”. There are no other hidden fees outside of the management fee at legitimate managed funds. So I don’t even know where that’s coming from?
If you’re speaking about syndicators..
Cardone charges
1% Acqusition Fee
1% Asset Management Fee
1% Disposition Fee
Tulsa is charging 5.5% without actually divulging the breakout of what those fees are. He chalking it all up to “Management fees” but since this operates as a syndication, we know fees are charged for other services outside of asset management.
So Jay is not really being transparent here. And I still contend, for the demo, for the amount of money he actually raised, and for the actual amount that is being actively invested, the fee is too high.
The one argument that the “Capital Todd” guy mentions is that investing in the fund for him and the other investors is more than the money but about the goal, I guess, of taking ownership back in their hoods.
And if that’s the case, then the management fee, which was my only initial issue, is not really going to be an issue for others looking to get into this fund.
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nobody reported that dude, they investigate dozens of companies business practises a day. type "under SEC investigation" in google and look for yourself. 
you can't answer a simple elementary yes or a no question, so now it's "i'm done w/you"
From their own goddam website: 
nikka WTF!!? they're saying how they investigate is not open to the public, but again, if you think they sit around on their ass and caught facebook slipping based off of a "tip" you're a dumbass