Cadre Real Estate Investing Review [2021]: Invest in Hidden Gems with the Help of AI

Accredited investors can invest in a diversified portfolio or hand-picked individual properties across the U.S. with Cadre.
Last updated Aug 15, 2021 | By Lee Huffman
Man looking at real estate portfolio

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Real estate investors generally love the income streams, potential appreciation, and tax incentives that properties might offer. However, some may shy away from investing in individual properties because it takes time and effort to locate attractive deals and they don't want the responsibility of actually managing the property.

That's where FinTech platforms like Cadre come in. Cadre offers professional expertise, refined systems, and ease of investing to people who are interested in passive real estate investments. Here’s what you need to know about this unique platform.

Quick Summary

Cadre helps accredited real estate investors build their portfolio with institutional quality investments.

  • Invest in individual deals or a portfolio of properties in high-potential areas
  • More than $3 billion in property value offered on the platform
  • Over $168 million distributed to investors
In this Cadre review:

What is Cadre?

Cadre is a real estate investment platform launched in 2014 by its co-founders, CEO Ryan Williams, Jared Kushner, and Joshua Kushner. It primarily uses artificial intelligence to identify markets that offer the potential for outsized growth for accredited investors. The technology analyzes more than 40,000 variables and 3 million data points to refine opportunities.

Mr. Williams' vision is to strengthen the communities in which it invests. To make that happen, Cadre holds at least 5% of its cash with leading minority depository institutions. It allocates at least 10% of future investment capital to operating partners owned by under-represented minorities. Additionally, it seeks to create reasonably-priced rental units within its communities.

Cadre is located in New York City and has attracted at least $155 million in investments from large investment firms, such as Andreesen Horowitz, Founders Fund, Goldman Sachs, and the Ford Foundation. Its latest valuation by PitchBook pegs the startup’s worth at $800 million. Additionally, its Investment Committee is headed by industry veterans from Blackstone, Four Seasons, Fortress Investment Group, and Vornado.

Cadre

Minimum investment $50,000
Management fees
  • 1.5% annual asset management fee
  • Up to 0.5% administration fee
  • Up to 3.5% commitment fee
  • 1.0% transaction fee
Asset classes Commercial real estate
Account types available Real estate fund, individual deals
Features Opportunity to invest in:
  • Diversified portfolio of properties in high-growth markets
  • Individual deals
  • Tax-advantaged investments
  • Deals that can be purchased and sold on secondary market
Distributions Quarterly distributions
Best for... Accredited investors looking for diverse real estate opportunities
Visit Cadre

What does Cadre offer?

Cadre is a crowdfunding platform for accredited investors interested in investing money in real estate. Potential investment properties are selected in two ways, by using artificial intelligence and local relationships. Cadre estimates that 80% of its investments are sourced from its technology, while 20% are presented to them from local contacts.

Its AI technology analyzes more than 40,000 variables and 3 million data points in order to locate cities and properties with outsized potential. This analysis has led to the creation of the "Cadre 15," which are specific markets where Cadre focuses 80% of its investments based on its investing criteria. These markets include Seattle, Los Angeles, Denver, Atlanta, and Washington, D.C.

Cadre offers a few distinct investment opportunities where investors can invest in a fund of properties or in specific deals. It also offers a cash account through its partner, Evolve Bank & Trust.

Cadre Direct Access Fund

With the Cadre Direct Access Fund, investors own an interest in a diversified pool of properties. Currently, Cadre targets an allocation of 50% multifamily properties and 50% office, industrial, and hotel buildings. These investments seek to provide a mixture of current income and future appreciation.

This fund offers the potential for quarterly cash flows and profit upon a sale of the fund's assets. Additionally, investors can choose to sell their shares in Cadre's Secondary Market during periodic windows.

Deal-by-Deal investing

Deal-by-Deal investing allows investors to hand-select the deals they want to participate in based on their own personal metrics and investing strategies. Cadre offers three types of deal-by-deal investments:

  • Cadre Fund co-investments: When a new asset becomes available, the majority of its equity will go to the Direct Access Fund. The remaining portion is set aside for individual investors with a minimum of $50,000 investment. Allocations are available on a first-come, first-served until the deal is fully funded.
  • Opportunity zone investments: Opportunity zones are tax-advantaged real estate investment opportunities where investors can reinvest proceeds from the sale of assets without paying capital gains taxes.
  • Secondary market investments: After an investor has owned an asset for at least six months, that asset becomes eligible to sell on the Cadre Secondary Market. Cadre opens selling windows for approximately two weeks in the middle of each quarter so investors can buy and sell existing assets. Investors can sell up to 100% of their Cadre assets during these windows. However, the minimum partial sale is $50,000, with larger amounts increasing by $5,000 increments. If you retain any portion of your asset, the remaining investment must be worth at least $10,000.

Cadre Cash Account

The Cash Account is offered by Cadre's partner, Evolve Bank & Trust. It has no fees and is FDIC insured for up to $750,000 through the FDIC's Multi-Bank Program. This protection is three times higher than the standard FDIC insurance you would receive from a traditional bank account.

How Cadre's fees work

Cadre does charge fees, including annual fees and transaction fees. Investors are charged annual fees of 1.5% for asset management and administration fees of up to 0.5%. For balances under $1 million, the administration fee is 0.5% per year. Once balances exceed $1 million, fees are reduced to 0.25% per year.

Investors are also charged a 1.0% transaction fee when making an investment and a commitment fee of up to 3.5%. This fee is reduced for investors making larger investments.

Pros and cons of Cadre

Pros

  • Uses artificial intelligence to identify potentially high-value opportunities
  • Backed by well-known industry names
  • Offers periodic selling windows to exit your investment
  • Opportunity zone investments offer tax incentives

Cons

  • Lack of liquidity
  • Must be an accredited investor
  • Minimum investment amount of $50,000
  • Does not offer a mobile app to track your portfolio

Who can open an account with Cadre?

Cadre’s opportunities are limited to accredited investors only. This means that you must have at least $200,000 in income for the previous two years (or $300,000 jointly) or a net worth of over $1,000,000, excluding your personal residence. Investors that hold a Series 7, 82, or 65 securities license also qualify. Cadre is not the best platform for investors who want to learn how to invest in real estate.

If you'd like to invest through your trust, partnership, LLC, or other legal entity, it needs to have accredited investor status as well. To qualify, the entity must be wholly owned by accredited investors or have total assets of at least $5,000,000 (and was not formed specifically for this investment).

Cadre requires potential investors to provide documentation verifying their qualifications as accredited investors. You can provide W-2s, federal tax returns, a verification letter, or an Individual BrokerCheck Report to satisfy these requirements.

Because private real estate investments tend to have long-term horizons, investing with Cadre is best for accredited investors who can meet the $50,000 minimum investment without affecting their ability to meet their short-term financial needs. Although Cadre offers a periodic liquidity window, the NAV (net asset value) of your investments is not guaranteed, nor is it guaranteed that a buyer will want to acquire your asset.

How much can you earn with Cadre?

Investing in real estate can be risky and does not provide guaranteed returns. How much you can earn depends on the specific asset classes you invest in, how long you hold it, your risk tolerance, and other factors.

Although Cadre was founded in 2014 and has closed on more than $3.3 billion deals, most of those properties are still held in its real estate portfolios. Cadre claims distributions of $168 million back to investors and an 18.2% historical rate of return.

The Cadre website highlights four properties that have been sold, and each has outperformed its underwritten net IRR (internal rate of return), though potential returns will vary.

Investment Type Location Underwritten IRR Actual IRR
Avida 421-unit Multifamily Salt Lake City, UT 11.0% 16.8%
Skyridge Apartments 364-unit Multifamily Chicago, IL 12.0% 15.0%
Sugarloaf Trails 268-unit Multifamily Atlanta, GA 13.3% 27.4%
Astoria Portfolio Four-building residential Queens, NY 15.1% 16.2%

FAQs about Cadre

Is Cadre legit?

Yes, Cadre is a legitimate real estate crowdfunding platform. It has attracted some of the biggest names in real estate and private equity as investors. With $155 million in private equity investments and an estimated valuation of $800 million, Cadre is growing and helping investors acquire valuable real estate properties across the U.S.

How does Cadre make money?

Cadre makes money through its annual and transaction fees. Investors pay a 1.5% annual asset management fee and an administration fee of up to 0.5%, depending on the size of their investment. Investors with over $1 million invested with Cadre see a reduced administration fee of 0.25%. Additionally, Cadre charges a 1.0% transaction fee on investments and up to a 3.5% commitment fee.

Is real estate a good investment right now?

Real estate could be a good investment, whether prices are up, down, or flat. Working with an experienced team that has been through previous market cycles might help you better identify potential real estate investments, though returns are never guaranteed.

How to open a Cadre account

If you qualify as an accredited investor and would like to open an account with Cadre, here's what you need:

  • Personal information to complete the application, including your full name, phone number, address, email, and more
  • Verification documents for accredited investor status (e.g., W-2s, 1040 Federal tax returns, accredited investor verification letter)
  • $50,000 minimum investment amount

To open your Cadre account, click on the "Get Started" button on top of any page on the Cadre.com website. You'll submit your personal information, provide accredited investor documents, and answer questions about your investment objections, experience, and risk appetite.

Once you complete the account opening process, you can explore investment opportunities. Cadre will also send an email offering an introductory call with its Investor Relations team, if you'd like one.

Before you invest, you’ll need to verify your account using your email. After your account has been verified, you can choose an investment, complete the documents, and fund your investment account. All of this can be completed online without speaking with anyone.

Other investing platforms to consider

If you don't qualify as an accredited investor or you prefer other real estate investment opportunities, here are some alternative platforms you might want to consider.

Fundrise offers diversified real estate investment opportunities starting at just $10 and lower fees than Cadre. As your investment balances grow, you can unlock additional features and real estate opportunities commensurate with your experience and account size. It could be an excellent option for beginning investors who want to learn about the real estate market as they build their portfolios.

Read our full Fundrise review.

Equity Multiple provides real estate investors three investment approaches to meet their needs. Accounts can be opened starting at $10,000 with direct investments in single properties. Other options include diversified portfolios of properties and tax-advantaged investments. This option could be good for investors familiar with the real estate industry but might not yet meet accredited investor status.

Read our full Equity Multiple review.

Cadre Benefits

  • 18.2% historical rate of return
  • Rigorous, technology-driven investment selection
  • Top industry expertise with over 25 years of experience
  • Accredited investors only

Author Details

Lee Huffman Lee Huffman is a former financial planner and corporate finance manager who now writes about early retirement, credit cards, travel, insurance, and other personal finance topics. He enjoys showing people how to travel more, spend less, and live better. When Lee is not getting his passport stamped around the world, he's researching methods to earn more miles and points toward his next vacation.