Cardone Deposition 4: CONFRONTS LAWYERS YOU CAN’T HANDLE THE TRUTH

This begins meeting at 4. We're back on the record. The time is 4:24 p.m.

Mr. Cardone, we're still looking at this action plan and written social media compliance manual.

Yes, ma'am.

We're on page eight, the basic rules of advertising.

Yes, ma'am. One of Cardone Capital's rules for advertising was to make sure that you can substantiate your advertising claims.

Right.

Objective form, Miss Aaron. Where are you reading from?

Rule number one.

Okay. I withdraw my objection.

Again, of course.

Okay.

Okay. Because you understand I'm the one doing all the advertising. They're not. This was basically a book to start educating a bunch of young people answering phone calls. And as part of the compliance, as part of being, what's the word? Uh, not responsible. I mean, responsible for sure, but diligent. We're just educating our our team, but the the team's not making claims. You know who makes claims around here? Grant Cardone. I'm the one making claims. Not Ryan, not Andre. I'm the one saying, "Hey guys, I just found a deal. I think this a great place to protect your capital. I think it's going to cash flow. I think it's going to do somewhere between five and 6%. I think we're going to pay down the debt down if there's an intereston loan at 5 years. after five years, we're going to start paying it down. And I think it's going to be a a great investment for me and my family. And if you want to come in, come in. And then they would go and and this was really just to protect so the guys on the phone aren't over saying something unnecessarily."

And another one of Cardone Capital's rules for advertising was be sure that your advertising claims aren't deceptive.

Right. the uh

Yes.

Okay. And it says,

But again,

Mr. Cardone, the yes is is good enough for that question.

And it says, for example, stating that you doubled your money from investing in real estate.

You guys don't want the truth. You You just don't want the truth, do you, Mr. Cardona? It was a simple yes or no question. They question

You can't handle the truth.

I've been dying to do that my whole life. What's the pending question?

We'll submit that for your audition, Mr. Cardone.

Thank you. Thank you.

Uh the question was for it says for example stating that you doubled your money from investing in real estate, right?

Okay.

That's what it says. And that's an example of an

Which one which one is it?

We're on number two. Okay, good.

The example there.

Okay.

And that's an example of an advertising claim that would be deceptive. Right.

Objection mistakes the document. Yes, it does. Missing the document.

It says, for example, stating that you doubled your money from investing in real estate. Right.

That's what it says.

And that's right.

It misstates the intention.

That's right.

And the purpose of this exercise and this book to be delivered to people that don't advertise. My team was not advertising. I'm doing the ads. I am the ads.

Mr. Cardone, just to be clear here, it says, "Be sure that your advertising claims aren't deceptive underneath that." For example, stating that you doubled your money from investing in real estate. Correct.

That is what it says.

Okay. Let's look at what I'll mark as exhibit 249. We'll

Look to one where I say double or triple. Oh, I'm sorry.

249.

Mhm. There's a great example.

You just keep bringing it, don't you, Morgan?

Do you recognize this document?

Yeah. Layups now.

This is a post on my team.

This is a post from your Instagram account, right?

Yes, it is.

And it says at the top, want to double your money, right?

Mhm.

And then it says 1 million and next to that $2,180,000. Right.

Mhm.

So the post is implying to investors that they can double their money if they invest with Cardone Capital. Right.

Objection mist.

The post says exactly what it says. And you can start making up stuff and trying to make me look like somebody I'm not. But it says if you get six years of cash flow at 8% that's $480,000 a year. You return your capital at1 million.

A second slow down please.

Sorry. Six years of cash flow at 8% a year average date we're on track for over uh nine right now. Even with the start at two, our deal, our the deal you talked about earlier did 2% the first year, 3% third year, a second year, and it's over 968 in the in year 10. And we haven't even gotten there. Six years of cash flow at 480, return of capital 1 million. That's the money they gave me. And then if the asset went up just 7 uh 700 grand, you would have a 118% return of capital, 19.6 6 a year. Now, do I take 65% of the 19?

You tell me. Mr. Cardone.

You'd have to ask me.

Do you take 35% of the 19.6?

I could.

So, Mr.

I don't have to. I'm not required to.

What you just read here is that you're spelling out for an investor how they double their money, right? Subject to foreign mistakes of

So you want to double your money text 3054070296 my team will then show them the deal they will be invited to a call to discuss the deal at which point I'll show them the deal with an address 10x Delray 10X Naples 10X Srass 10X uh Pacific uh uh the panhandle, the breakfast point. This is again, no one allows the investors to do this but me. If you call Starwood right now that has 140,000 affordable housing units in America, regular people do not get to invest in it. If you invest in any of the $4.3 trillion REITs in this country, which most people's 401ks, IAS, pension funds are invested in, she would not know that she's invested in a specific asset. With Cardone Capital, you know exactly the asset you're going into. You know the prediction or the targets for the cash flow. You know what the tax write offs are in year one. and you know my personal projections of what I think happens over 5 years, 7 years, and 10 years.

I'm going to move to strike that response as nonresponsive.

But it is responsive. You don't like it because it makes your case bad.

The bottom of the post here says targeted returns. We seek properties where we can deliver 6 to 8% returns.

That's right. Sell properties at point where we can achieve north of 15% returns after fees.

That's right.

This post is dated February 5th, 2020.

That's right. And then we provide the investor with a 10-year spreadsheet that substantiates everything that I'm saying.

Mr. Cardone, as of February 2020, none of the Fund Five properties had generated an 8% annual return to investors, right?

Well, how could they? They're not 10 year old 10 years old yet. But fast forward, okay, I mean, I'm sorry, just go backwards. You're you're trying to go back to 2020. We're in 2026 right now, and I'm achieving these funds. So, how are you going to go to a court and say there's been financial harm to one person when there hasn't been? Morgan, you and Raj or your team, how can you guys substantiate any financial damage to any person?

20,000 people have been paid every single month since they've been invested with me.

I'm going to move to strike everything as non-responsive after how could they? They are not 10 years old as today. But but you don't care about the truth then, Mr. Cardone.

How can you but how can you sit there and not care about the truth? The truth is there's been no fraud. You're suggesting fraud and misrepresentation and there hasn't been any.

Your attorney will have an opportunity to ask you questions, but right now I need you to answer my questions. To date,

You sound like my mother right now.

To date, neither fund Five nor fund six has had an annual return of more than 5.5%. Right.

Not true. Sorry, you you you don't know real estate math.

Mr. Cardone. Those are the figures that are reported to the public.

Sorry, a strike for what is it called? What's the word?

Rude to strike.

So, Cardone,

It's not true. You don't know real estate. You guys should stay in securities. Leave the real estate thing alone. We can look back at

You have to destroy the asset

To not hit my numbers.

If we can look back at exhibit 231,

Mr. Cardone, exhibit 231.

Okay.

Do you have that in front of you?

I'm sure I have it somewhere. How you guys are going to go to a jury and explain people have been paid every month and there's been financial harm. Like it's crazy, dude. But you guys are so pot committed now. You can't get out of it.

Let's go to interrogatory number nine. Do you have the document in front of you? 231.

I'm tracking. You should invest in my deals with me. They're so good.

Can you turn to page

Anything for you, Morgan?

Eight.

Page eight. I'm on it.

Okay.

I'm going to get my second win right now.

And it says under current performance.

Yes.

And let's look at this second to last sentence of that paragraph. It says, "Both funds also achieved annual cash returns of 5%." Are you saying that's incorrect, Mr. Cardone?

I didn't say it was incorrect. By the way, you've questioned me on this at least twice already. This will be the third time.

So, Mr. Cardone, then it's accurate that the funds to date have achieved annual cash returns of just 5%. Is that right?

Objection.

I sent $14.1 million to a portion of that went to this fund last night. I I don't know what you're talking about. I got 30 million going out. 30 more million going out. Mardone, what do you

There have to be I'm sorry, Margaret, but you have to he hear the whole thing to understand any of it. There would have to be a destruction of the asset itself. The only way anybody loses money in these deals and the only way we don't hit the returns is, see, now listening, you're typing because you don't care. You don't want to know what the what the truth is here. We'd have to destroy the asset in 2021 and 2022. I could have sold all these assets and achieved uh returns in excess of anything that we printed because and your professionals are going to come in. Your guy, what is his name? Zigg Ziggler or whatever it is. Ziggy. He he he he's he's going to he's going to attest to the fact that cap rates had compressed in 21 and 22 and we would have achieved these numbers. My appraisal numbers that we have to get every two years support the fact that the real estate I hate looking at you when you don't look at me and we can have a conversation together. It's very difficult that the fact that I get an appraisal every two years, okay, that substantiate our numbers in real time.

Mr. Cardone, this is not a conversation. I'm asking questions and you're providing answers. And my question is, both funds, it says here in this document that both funds have achieved annual cash returns of 5%. Is that accurate or inaccurate?

No, they've achieved more than 5%.

What have they achieved?

I mean, what year was this?

This was a document that you provided.

So, I don't know. It's four years later. Today, I'm probably I'm probably somewhere in the 96.

This was a document that was executed on June 15, 2026. So, one month ago.

Okay.

But you're misreading. I'm sorry. Objection. You're misreading the document.

Council when this document says both funds achieved annual cash returns of 5%. What date is that discussing?

I have no idea. You want to tell me? You have to tell me.

These are your responses.

It wouldn't matter if it was to if this le if whatever you're looking at right now and all this conflating of contacts and content dates. Still no financial damage.

Move to strike as

As of last night. All these numbers change again. Anyway,

Mr. Cardone, let's look at the response to interrogatory number 11, which is on page nine.

Yes, ma'am. It says, "State the factual bases for and any assumptions made in connection with Grant Cardone's representation on February 5th, 2019 that investors would double their money, receive $480,000 in cash flow after investing 1 million and so on.

Um, if we look back at uh this exhibit where you say, "Want to double your money."

First off, I think this says it's dated February 5th, 2020.

Good.

So, is that is that the date of this post?

This says February 5th, 2019.

Correct. But I'm looking at the post now. Should it say February 5th, 2020?

I don't I don't I don't know.

Okay.

I have no clue. I guarantee you on February 5th, 2019, I did a post.

Okay?

And I guarantee you on February 5th, 2020, I did a post.

But that what this is talking about here in interrogatory number 11, that's referring to this post, right? The want to double your money post.

Objective. You're asking me

I I just want to make sure we're on the same page.

I don't I don't know that you are on the same page. Seven years later, you're asking me today if what this paragraph matches that post. I have no clue. Like it's impossible for you.

You don't know what this paragraph is referring to. You don't know what post it's referring to.

That that's a different date. What you have in your hand is a different date than this date.

Okay. But it says here 118% return amounting to 19.6% 6% per year.

That's not what this is.

It reflects the same numbers. Correct. What's here in interrogatory number 11 and what is in this post?

What are you asking me?

So my point here is quite simple. Yeah. In response to interrogatory number 11, it said defendants refer plaintiff to their response to interrogatory number nine and incorporate that response by reference here. Earlier today, we went through interrogatory nine at length. Is there anything that is not an interrogatory number nine that you believe forms the basis of this post here?

What is the question? Just a simple layman's question. Is there if you look at interrogatory number nine and you can review that. Is there anything that is not in that response

That you believe supports this document, this exhibit? You're asking me about nine now.

Because

Not 11. The interrogatory number 11 refers to the response to interrogatory number nine and says essentially that rag nine.

There's the only way I can answer this question again you're beating a dead horse now we buy real estate we hold we have an exit there I'm not going to change you could sit here for six days you think you're ever going to get anything different from me you know why you're never going to get anything different because we do the right thing by our investors. We buy great pieces of real estate in great locations. I buy them with my money. This is the craziest thing. I buy it with my money and then I offer people I don't even know access.

Mr. Cardone, one of the topics today was the basis and support for your representations. That's all I'm trying to figure out here. It's just I want to understand the full basis. basis if you're really interested in the basis is is I have paid cash flow to our investors every single month since 2018, eight years in a row. Brookville returned lost billions of dollars. Starwood gated redemptions to firemen and policemen. I continued to pay people through COVID when nurses in New York were getting laid off and tech people in banks. Grant Cardone kept sending checks out.

Mr. Mr. Cardone, Cardone Capital did not pay investor distributions to investors in funds five and six in April 2020.

Cardone Capital did not pay distributions to investors in funds five and six in April 2020. Correct.

Not true.

You made distribution payments to investors in funds five and six in April 2020.

Yes, we did.

You distributed the money in April. Yes, we did. That's what I'm saying. Again, you guys should do a little more due diligence. April and May and June and July and August and September when the whole world had turned upside down. People were being sent letters, okay? You're not going to have a job. You can't go to church. You can't go outside. What did we do? Cardone Capital continued to take care of our real estate and the investors.

Mr. Cardone,

We immediately on March 20th informed investors that we would be holding escrowing cash distributions for 90 days. We did a Zoom call with all our resident uh all our investors. As soon as COVID happened, I was in PBLO. Thank you. Thank you. I was in PBlo, Colorado doing a show with Discovery Channel. Okay. They shut the show down. I got on a my plane, flew back home, had an investor's call two days later and told my staff, "Quit quit making distributions, pushed the cash flow to an escro account. We're going to hold it for the next 90 days to see what happens with this COVID thing." Federal government had been shut down. People couldn't go to work. Everybody was terrified. We then put a f a full attention on the asset itself to make sure we didn't the asset didn't get hurt. So it goes like this. The asset and then the lender. We wanted to take care of the lender first because the lender was calling us. Do you need forbearance? Do you need help? Are you all right? Okay. So I'm answering questions on fund four, fund five, fund six at that time. Yeah. And all the previous funds before it that I'm responsible for. So we escroed the cash flow for April and May, called our investors back on uh somewhere in midMay and said, "Hey, we're going to start sending out the cash flow again." So the April and May payment got caught up. We did not miss one month. While other people were turning the keys in to Fanny and Freddy Mack, they were literally saying, "We tap out right now. We don't even want to handle this." Our occupancy went up while the country had like a 73% collection. We were at we were had the highest renewals and highest collection of anybody in the country.

Mr. Cardone, we have limited time here today. I have a I don't I cancelled my I cancelled my my appointment. I promise you that your attorneys will cut me off at 7. They will not cut you off keeping me time. You can stay. We can stay till 9:30. I know you got a flight tonight.

I'm sure they do not love to hear that. Mr. Cardone,

The they're just going to bill me. I pay for everything here.

I'm gonna mark this as

Joe's staying at my house tonight

On the beach. Joe

For the deposition.

Bottle of wine. French wine.

Pictures of Sanrope 250, right?

You're coming with me.

Let's party. Do you recognize this Instagram post, Mr. Cardone?

Yeah.

The Instagram handle here is Cardone Capital, right?

I think so. Yeah.

That's Cardone Capital's Instagram as we've established.

Yeah.

The post says targeted investor irr.88%. Yeah. Right.

Okay. And it says targeted equity multiple 2.5 to three times. Yeah. Right.

I don't think we're going to hit that either, by the way. On the record,

10x living at Panama City Beach is a fund six property, right?

Yes, it is.

Fund six property.

And fund eight. Fund six. You see, it says fund six and fund eight. I'm going to share a document in the Zoom. I have it printed, but I think the way it printed as a spreadsheet is not the clearest. So, I'm going to put it in the Zoom.

Got kicked out of the Zoom again.

Oh my gosh, it logged me out of the Zoom again. Can we go off the record, please?

We'll go on record. The time is 4:49 p.m.

We are back on the record. The time is 4:53 p.m. Mr. Cardone, we've shared a uh document in the chat.

Yes, Morgan.

Which I'll mark as exhibit 251. Do you recognize this document?

I I do, Morgan. I'm just going to get along right now. I can barely see it, but I do recognize it.

Okay. Um,

Do you have a paper copy already or I will

I have a paper copy. We can

Make that maybe 251A and I'll give it to Mr. Cardone, but it I will say it you can compare it to what's on the screen.

What date was this created?

V. Now

The this was created on the detail model tab. So when I go to print it, it updates to today's date. But if I look on it

Uh as it was produced to us, it's dated October 16th, 2020.

Yeah. Yeah. Good.

Co's over or no, we're midco. Yeah. Good. Okay. I'm tracking. The final underwriting that was conducted for 10X living at PCB.

Objective fee, no foundation.

PCB P

PB

PCB. It's just an abbreviation. Panama City Beach.

PCB.

Yes. Uh, was this the final?

Yes.

No. I mean, this would have been one of probably nine different underwritings by me, Ryan, if Andre was a or our analyst, whoever. Maybe William was the analyst then. Fanny would have done one, the broker would have done one, the seller would have had one. Uh, and then probably two or three lenders would have looked at it. But, but this is what we're using to forecast out to Wells. I think Wells was the lender on this because they need a 10-year projection.

Are you aware of any underwriting model for 10X living at PCB that is dated after October 16, 2020?

Projection foundation.

I'm sure I'm sure there is. I'm sure I've I've probably underwritten this thing 50 times since then.

If there is underwriting that post dates October 16, 2020, would you produce that underwriting?

Objectively.

I mean, I wouldn't tell them to because it's probably in a trash can somewhere. I do these on legal pads and throw them away. They're just they're just I could do three or four or five of these like in the next 10 minutes I could underwrite. Okay. Three cap, a four cap, a five cap, a seven cap. It's just trash. It's just cuz none of it's true. None of it none of it's going to hit. I'm never going to hit the exact number because there's so many different things that can happen. Like right now, this one, this this particular deal is not doing great.

Mr. Cardone, have you prepared any underwritings for the fund five properties since 2020?

You're on fund five now?

Yes.

Well, this is fund six, isn't it?

I'm asking about just fund five. Have you prepared any underwritings for any fund five properties since 2020?

What? Okay. You I was on I'm on this right now. So, you don't want me to be on this now?

I'm going to come back to this in a second.

Have you you just talked about you were you underwriting?

Of course I have. I'm the manager of $600 million fund. I am the manager. I'm looking at these sometimes every month, some sometimes once or twice a week for certainly every quarter, once a year we get an appraisal. I'm doing distributions every month. You think I'm not looking at this? I'm looking at5 billion dollars of real estate every single This is my job. This is what I do every day.

Have you thrown out those underwriting models since this lawsuit was started?

That's not a model, dude. It's like there's a you're you're you're conflating a model used by Fanny May and Freddy Mack or a lender and a model used by a seller or a broker for an OM for an OM or or from my underwriting when we buy it. Then there's the model what's happening right now in present time. During COVID, I was underwriting this stuff every 15 minutes. I was terrified that we couldn't deliver to our investors, but we did. We got through it.

I'm going to ladies just a thumbnail of that question.

Mr. Cardone, you do not have you have not kept all of those underwriting documents that you prepared, right?

Object to the form of that question. You guys are talking about two different things.

We're talking I do it on my phone. I do math calculators on my phone like a thousand times a year. Mr. Herdone, what you're talking about, I believe, is, you know, offhand calculations that you have made. What I'm talking about,

That's what I'm talking about. I'm talking about

Let's talk about the underwriting that model that we're looking at here.

Okay.

Are you aware of any model

That looks like this that is dated after October 16, 2020?

Objection. No foundation.

No.

Okay.

I mean, you have to talk to me if I have one. I could I could

Did you in preparing for this deposition ask anyone whether the spreadsheet was the final underwriting for 10x living at PCB?

Objection.

I don't need to ask anymore.

Mr. Cardone, one of the deposition topics for today expressly cited this document.

Mhm.

Did you review this document in preparing for the deposition today?

As soon as you showed it to me, what did I say?

You've seen it.

It's one of our poorest poorest performing deals of the nine deals.

This is the poorest performing deal of

One of our one of our poor today. This week, right now. Today, see me in 30 days. I might be like, okay, she's back on track again.

It's just it just this is the way it works. And and our investors all know these are longterm. This is a performer. This is a I'm sorry, not a performance. This is a projection.

Mr. Cardone, let's go to the 10-year.

I just want you to understand none of this, no one, including government agencies, the largest lending agencies on planet Earth, not just in the United States, use these models. These are not made up by me. These are models made up by Fanny May, Freddy Mack, life insurance company. These are trillion dollar institutions. I didn't start this. This has been going on since before you and I were alive.

Mr. Cardone, let's look at this 10-year forecast.

Please.

It says here at the bottom, 10year IRR, 17.01%.

Mhm.

Right.

Yes. In uh exhibit 250,

Mhm.

This post is 10X living at Panama City Beach. It projected the targeted investor IRRa as 17.88%. Correct?

Okay.

That 17.88% or this 17.01% here that's reflected in this document. That's not the investor IRR. Right.

Objectively.

No, it's probably the gross. I you know I don't know. I don't I don't Is that in? I'm not sure. Without doing me doing sitting down doing the math. Look, this assumes a lot of stuff. As I'm looking at it right now, it's like, oh wow, 12% rent rent loss across the entire 10 years. That means I only have to be at 88%. To hit 17. So again, you you remember Robin Hood, right? I don't have to take the 35 in this period of time. I would have already made money on this fund.

Mr. Herdone, let's go to the tab. There's a tab that is investor. It's irr waterfall is the the tab and that'll be shared on the screen and it's it's split up a bit, but it's at the back here.

But we going back to the computer now.

You can look on the computer. It's also at the end of this uh exhibit that I handed you.

Okay.

Who at Cardone Capital was responsible for preparing this IRR waterfall tab?

Uh I don't I don't know. It wasn't Sorry.

Sorry. Objective form must be honest. Got the notice.

I've never requested a waterfall ever. And the reason that's important is because I don't depend on a waterfall. I don't even care about it. Now, does some kid up there, Ryan or Jim Dro, interested in their bonus based on a waterfall? Probably. That's probably why this But I have no care. I don't care about the waterfall. I don't care if I ever get my 35%.

Well, this waterfall, it contains information about both your waterfall as the sponsor, correct?

Same same difference of everything I just told you. And it also contains there's a section here LP cash flow.

Mhm.

Limited partner, correct?

Yeah.

And that's referring to the investors in the fund, right?

That's right.

And you said you don't care about this irr waterfall.

Do you not care what the breakdown is of what investors as compared to the sponsor will receive?

That's right. I don't care that I if I get nothing. Is that even believable to you? Could you believe that there's a human being that actually does not care if he makes a profit on this one deal because that's what we're talking about. I'm sorry you guys can't accept that fact. No investor, no investor, accredited or nonacredited will lose money in any of these funds. Not just five 6 4 3 2 1 28 27. No investor will lose their money.

When a strike is passive after that is right.

But you know it's just ridiculous that you keep striking this because it's it's answering your question.

No, it's not.

It is answering your question. I don't have to take a promote. I am not bound by anyone to take a promote. I do not have to profit.

Mr. Cardone.

Sorry. Could I have the last question right please? I said that is referring to the investor in fund five. He said that is right. I said now you said you don't care what the about this IR.

Well, you can go ahead and read it.

Question. Now you said you don't care about the irr waterfall. Do you not care what the breakdown is of what investors have compared to the sponsor of what investors as compared to the sponsor will receive me

And and what was the first part of the answer before the part?

That is right. I don't care if I get nothing. Is that even believable to you? Would you believe as a human being that actually does not care if you make a profit on this one deal because that is what we are talking about so when you guys can't accept the fact

Okay, I'm on limited time here, Mr. Cardone.

And and and if you would just allow me one second to explain this. Okay.

This is my next question. Mr. Cardone,

But the

I'm the only one paying here. Okay, I'm the only one paying anything. Can I just finish this part? Denise, let me just tell you the strategy.

Your attorneys, Mr. Cardone, will have an opportunity to ask you. I'm not This isn't about my attorneys. This is so you know, Mr. I This is

And I have prospects in the room, by the way. Okay. If Denise wins, if Denise wins on this bigger than I won, okay? She's got nieces, nephews. This is a marketing plan.

This is a business, okay? I am marketing to our investors. We are utilizing our investors to to make sure they win. Guess what happens? They then tell their friends and their family. Okay? It's basic. Charles Schwab built a business off of discount fees. And because he did such a good job, more people put money in there.

Mr. Cardone,

You don't want to hear this, but this is what you guys are dealing with.

Mr. Cardone.

Miss Morgan.

Yes, I have to ask the questions.

Okay, that's fine. I have to answer them. But you are speaking without me having asked the question. But I want you to know to do that, Mr. Cardone. We will have to continue the discussion.

I don't mind continuing. I told you I have tremendous stamina.

Mr. Cardone.

So, I don't mind. I don't mind rolling. Okay.

The Let's look at this spreadsheet. Okay.

Back to to PCB.

Yes.

Okay. This spreadsheet, this tab, the IRR waterfall.

Yeah.

It's included in your underwriting for the properties. Correct.

I've said that. I've answered that three or four times.

And a Cardone Capital employee would have prepared this information, right?

Yes, ma'am. It's fair fair to say that because these are plug-in numbers.

Okay. And uh the sponsor cash flow here, the that's Cardone Capital, right?

Mhm. And the yes LP cash flow that's referring to the investors, right?

Yes.

And it says here under here IRR under LP cash flow 14.56%.

Yes.

So the projected investor IRR for this property was 14.56%. Correct.

Projection.

That's what that's what that says.

Okay. And beneath that it says, uh,

By the way, that would be fair advertising. Even if I hit a 14.5%, everybody would say, "Hey, you're close enough." Nobody expects me to hit it on the on on the money. By the way,

It says underneath LP cash flow, there's property level cash flow. Do you see that? If you look on the screen, okay.

I don't need to.

And it says levered IRR 17.01%.

Yes, ma'am.

Right. Okay. So if we go back to the 10-year

Performer

Proforma

Not happened yet.

It says

Projection of the future

10year irr 17.01% 01% right.

See that.

Okay. So that is the project not the investor irr.

Okay.

Okay. If we can look back at exact

But if it all gets passed through to the investor who gets it the project IR then becomes the investor IR.

Mr. Mr. Hardon, are you willing to say here under oath that you will forgo your money in this fund and that the project in ir IRR will become the investor irrational?

I don't think you're here to try me on that.

I don't I don't think I have to make you any promise. So, you want to be an investor in my deals? [ __ ] let's cut let's cut a deal, me and you. Okay. We do a deal, you put it in half, I put it in half, and we'll just both wait it out. But there's a very good chance on that deal that I'm looking at right now, if it continues to perform exactly as it is right now, never changes, I will throw in my promote so that Denise and people like Denise get to get all the money and I get nothing. And then I will have I will have bought that deal, funded that deal, found the deal, managed the deal, and basically made nothing for 10 years. And you know what? I won't regret it. I have people praying for me. 20,000 people. I got Muslims praying for me, Baptists, Protestants, Pentecostals, Cath, you know, like people that don't believe praying for me. Man, Grant Cardone, send me a check every month. They set their watch in their calendar. Cardone Capital is going to pay me this month. 20,000. That number is going to become 200,000. And you're going to look up 10 years from now and you're going to be like, I deposed that guy back in July of 2026. Man, he built a big business doing this. Mr. Cardone, let's look back.

You're going to say, "I knew him when before he was a public public before he was a bank. I knew him."

You're going to tell your kids, "I knew that guy. I deposed him back in the day."

Let's look back at exhibit 250, please.

Okay.

All right. The post here for 10x living at Panama City Beach.

Okay.

It says targeted investor irr.88%. 88%. Right.

I had so much hope for this deal.

It hasn't lived up to that hope, right, Mr. Cardone?

It's disappointing to want to cry about it.

Okay.

So, I'm going to go back there. You know what I'm going to do rather than cry about it? I'm going to go back and buy the rest of the neighborhood.

All right. Um, can we go off the record for a second?

Come on. Come on. Don't take a break, dude. Breaks are for quitters. We're back on the record. The time is 5:13 p.m.

Okay.

I've hope you've been entertained.

I'm going to mark this as exhibit 252.

Life is too short not to be entertained and have a smile, you know.

252.

252.

Life is too short, man. Do you recognize this document?

I do.

Okay.

This is a post from Cardone Capitals Instagram account, right?

Yeah. I probably created all of this, the the the photos, the car,

The little meme, the whole deal. And it's inferring that Cardone Capital is an asset. An investment in Cardone Capital is an asset. Right?

Objection was stuck here. It

Depends. Beauty is in the eyes of the beholder. This suggests that a car, a yacht, and a boat is a liability and that investments in that piece of real estate right there

Is an asset.

Is an asset.

Okay? Doesn't say that Cardone Capital is an asset. This was promoted. This is a meme graphic delivered by Cardone Capital. Surround yourself with assets, not liabilities.

I'll mark this as exhibit 253.

Or actually, sorry, this is already marked. This was previously marked as exhibit 20.

Let me have that. Normally, you give this to Joe. Oh, you're giving them to me now. I don't have to knock him. Oh, the ones that are previously marked, she just hands to you directly.

That's so nice of you.

How much does Grant invest into the fund?

Do you recognize this, Mr. Cardone?

I'm trying to recognize the property. What property is that?

Yeah, I recognize him.

Okay.

But I don't know what property is.

But you recognize the post itself, right?

I do. And it's from Cardone Capitals Instagram, right?

Yes. Okay.

And the post asks or it says, "How much does Grant invest into the fund?"

Yep.

And in the caption here, it says, "This will be determined by the particular deal. However, the last three to four deals that Grant closed, Grant put a significant portion of his own money into the fun in the fund. One question you might want to ask is who is responsible for the debt?

Yes.

Answer is Grant. Correct.

Yes.

The properties acquired by fund five and six are purchased using debt financing. Correct.

No.

No.

The real estate is bought on my balance sheet. We close the deal. A loan could be in place at that moment or not. For instance, last year we bought $600 million worth of real estate from New Orle. They're $90 billion fund. We close the deal on my balance sheet or if the close can be uh coordinated with a a de a debt. I think we've used Fanny May, Freddy Mack, life insurance companies, Arbor, all in these funds that you're talking about. There would be the debt and there would be some equity. That equity is all mine at that point. I I funded the entire equity stack. So, in this case, well, let's just go back to fund five because you brought it up. It's $168 million. That was my money. Then we open it up to the public at which point if a million dollars comes in now it's 167 then it's 166 and then it's

So so I understand you purchase the properties using your own money. Is that what you're saying?

Yes.

And then you sell those properties

To We don't sell the properties. That that would be impossible. I I don't own the properties at that point.

Who owns the properties at that point?

The the the special purpose vehicle, the LLC's own the asset. You can't put a in this case, uh it'd be $480 million of debt on five deals and sell them the next day. Like, I couldn't be allowed by law to do this. You guys are watching these clickbait videos without doing any research. So, you cannot sell, you cannot, it's impossible to sell an asset a day after you bought it where you had a 60 or 75% loan on it. Fanny May and Freddy Mack would not allow it. Freddy and Fanny are basically the owners of those assets for for the next 5 to 10 years, depending on how long the loan was. So my question was the properties acquired by fund five and six are purchased using debt financing and you said no. No. Correct.

That's right. It's no again.

But the properties acquired by fund five and six they have mortgages. Correct.

They're the same thing. Mortgage.

Okay.

Okay. They're the same thing. You understand? Mortgage and debt financing is the same thing.

So there's debt financing for the properties, correct?

Of course.

Okay, that's what loantovalue ratio does Cardone Capital typically use to finance fund five and fund six properties?

Objective. I've used zero as I told you on last year and I think the highest we used on any of these was 70 65 or 70.

The monthly interest payments on the debt are an operating expense of the fund. Correct.

The monthly

Yes. The monthly interest payments on the debt are an operating expense of the fund. Correct.

Yeah. Yes.

And those interest payments

That's reduced from the NOI.

Those interest payments are paid out of the rental income that's generated by the properties. Correct.

Yes.

Do you get this?

That rental income is generated using the properties that investors capital was used to purchase. Correct.

I didn't follow that last one. The rental in income is generated from the properties that investors capital was used to purchase. Correct?

No, the the investor's capital was not used to buy these assets. I bought the asset. Morgan Bob and Joe and Brandon didn't buy the asset. Okay. The 2200 investors in in five and six were not qualified to buy the asset. Could not have gotten the loan. could not have gotten the asset. They couldn't have got a phone call back about the asset. They couldn't have managed the asset. They couldn't have bought the asset. They couldn't have funded the asset. And they couldn't have got a loan on the asset. They wouldn't even know what to do with the asset. These are monster 300 unit complexes. It's $600 million worth of assets. There's no one person of the 2200 investors or all of them combined could have bought these assets without me. I buy the asset, that's who bought them. I did. Then I provide them, make them available to my audience. A tiny sliver of my audience says, "I want in that deal." Okay, we have more people, more people that want in the deals than can get in these deals. Those people then come in. They are not respond. They didn't buy that asset. I bought the asset. I put the funding on the asset. I negotiated the asset. We filled the asset up with people. We brand the asset with my name. Then we then make distributions to our investors 45 days after a close. And in the case of five and six, we've never missed a distribution since 2018. If the funds properties do not generate enough income to make the debt service payments, investors could lose some or all of their investment. Correct.

I have never I I can't answer that because I've never missed a debt payment. I've never missed I've never been laid on a loan, Morgan. I've never missed a payment in my life. I've never paid interest on a credit card.

So, Mr. Hon, you don't

For an objection to the last. You don't know the answer to the question. If the funds properties do not generate enough income to make the debt service payments, investors could lose some or all of their investment. Your response is that you don't know.

Objection. Incomplete hypothetical. No foundation.

There's no chance. There's no world I live in where our investors lose their money. I can go through I mean I can go through 50 different because I think about it every night. I stay up every night worried about my investors. move to

strike that is nonresponsive. It's a simple yes or no, Mr. Cardone. No, there's no way our investors lose money. Okay, they're not overleveraged. So, how can the properties not pay for the loans? The question is if the properties do not generate enough income to make the debt service payments, yeah, then investors could lose some or all of their investment. Right.

Objection. Complete hypothetical. Um, I think it incomplete hypothetical. No foundation. If I had wings, I'd be a ferry. I wouldn't be a real estate investor. I I just You're giving me some situation. I mean, if the properties burn down, we're not going to be able to make the uh we're not going to be able to make the mortgage payments. If there's a hurricane category 5, it hits a 10x PCB and it takes the property out, I'm not going to be able to make the payments.

And if you couldn't make the payments, then investors could lose some or all of their investment. Right. Objection. Incomplete hypothetical. No foundation. I had a property last year. I own a park that had 10 thou $10 million worth of damage on it. We didn't lose anything. We did we couldn't make cash flow for three or four months because it but it was protected by insurance. So, we missed but it but the property paid back later. It was a disruption of business services covered by insurance. I'm just telling you since I was 30, 28 years old, 29 years old, I've never ever lost money on a piece of real estate.

We've talked about several Instagram posts today. Mhm. Do you review everything that goes out on your personal Instagram? I'm responsible for 90% of everything posted on either platform, any of the platforms. Let's move on. Okay.

Cardone Capital has received requests from investors for refunds. Correct. We have. Okay. I'm going to invest at Cardone Capital is the investor relations email for Cardone Capital. Correct. Makes sense. I hate the name, by the way. And so this is an email thread that Cardone Capital's investor relations team received. Correct. The first email here which is on the back starts on the back. It says Brian. Yep. I wish to withdraw. It says withdrawal my account with you and have the funds transferred to my bank account on file. Was this that little creep Brian Rob? It doesn't look like there is an option to do this via website. So, I'm reaching out to you in this email. Yeah. Please let me know if you have any questions. Right. Yeah. I just don't see who this is from, Brian. But no, no, no email address from Brian. But that's fine. Yeah, that's what I read the same thing you read.

Yes, you don't see who it is from because attorneys have redacted the names. Who did? Your council. What? Well, no. I mean, this is you guys redact something. Mr. Brian had the information. That's why that's the response this investor received was, "Hi, Brian. Why is it that you want to divest? Unfortunately, this was a mistake. And a liquid investment and you are invested in a closed end fund. Another mistake. Please find further details attached. Another mistake. You can email me directly. You can email me directly. Close and fund. Please find further details attached. You can email me directly if you have additional questions at melissa@cardone capital.com." And the investor Brian responds that unfortunately he quote ended up losing my position from this pandemic that is impacting everyone. I will need the funds to carry me on for a few months so I can support me and my two kids. Correct. A lot of that we were getting hammered with that back then.

The email here shows two attachments. Right. And I'm going to I don't have any attachments. Well, it's attached at the top of this email. It says attachments and two documents. I'm gonna show you one of those attachments. Did we give him his money back? Mark this as exhibit 254. It's a cliffhanger, man. Did we give him the money back? I need to know how the movie ends. Did we? Mr. Cardone, you guys got to tell me what Do you know that information? I I don't know who Brian is, dude. I know one thing. Melissa made a number of errors here that I wouldn't have made. Okay, Mr. Cardone. Yes. Can I Did you get a second? This is the document. Sorry. This is the document that Miss Harless sent to that investor Brian. Yep. Second, Miss Who? Miss Harless Esso S's. And it says, you know, this is right. Thank you for partnering with Grant Cardone as a Cardone Equity Fund 5 LLC investor. Yeah, we have received and reviewed your divesture request. However, we are unable to authorize your petition due to section 3.3 of the subscription agreement and 2.4 of the operating agreement. Yes. At this time, the fund is closed and investors can no longer elect to enter or exit in an effort to maintain the integrity of the fund. And it continues on from there. This is the default response that Cardone Capital sends to investors who requested a return of their investment. Correct. Objection. Yeah, I don't think it's the default. I think it was a terrible response by Melissa, but I don't think it's a default response. I'm going to mark this as exhibit 255. You didn't ask a question about this, right? Not yet. Well, you don't have the document, Mr. Cardone. Or did I miss it? Did I miss the question? These email addresses at the top here, these are all Cardone Capital emails, right? Okay. Okay. You You got to catch me up. Yep. I'm just asking. Did we No. No. What? Did we finish this? Cuz you never asked a question. We finished that. What was the question? I asked if that was the default response that Cardone Capital sent. So, you read me two pages to ask me one question. Mr. Cardone, let's look at this next exhibit. 255. But but I mean I didn't get to tell you what h what happened on this deal. Mr. Cardone, let's let's look at this 255. There are email addresses at the top here, right? And those are all Cardone Capital employees, right? Melissa, Ryan, Andre. Yes. Okay. Susan Justin. Yes. Okay. I know all these people. If we can go to the sec this page, Cardone Cap 00561249. Okay. Third page. You want me to go to the third page? Yep. There's an email on April 1st from Melissa Harless. Yep. And it says, "Do we have a canned response for those asking to divest?" (Parenthesis) mainly fund five and fund six and six investors who we do not speak to regularly." Yep. Right. Yep. And what was happening on April 1st, 2020? If we go to the next page, there was a world global pandemic. The entire United States had been shut down. Okay, it's very important that you understand this because it's insensitive to me, to my employees, and our investors and Penino, the Penino family during 2020. I'm sorry. I have to finish this, okay? Like, I'll take as long. You You can stay to 10:00 tonight. Don't I don't care. I'm going to say this. We had 3,000 investors at that point. I had hundreds of people, hundreds calling us every day. In addition to that, we had probably 6,000 apartments. I'm responsible for 9,000 families, 9,000 tenants calling. I don't know if I can make my payments. What's going to happen here? Like, it was it was crazy. So, Melissa is saying, "Guys, how do we handle all this traffic? Is there a canned response we want from management when we get asked these questions?" Okay. Thank you for letting me finish. I appreciate it, Miss Johnson. Um, if you go to 561248, she responds, "Yes, in the shared drive for IR in the policies and procedures folder, I know you had some issues getting to the folder. I can resend it to you separately if you do not have access to it." Right? You see that? Mhm. And if we go to the front page here, it says, "Please do. I can't connect to the server. Thank you. Yeah. And Miss Johnson says, "Please see attached." And I'll mark as exhibit. Is there Is there a point? Is there We're going to make a point at some point. 256 the attachment to that. You got to tell me why you said all that because I'm It's another cliffhanger. Mhm. When is this? 257. Oh, you said Yep, that's 257. Sorry. There's no date. There's no date on this. I would assume it's the same time, but I'd have to make an assumption. Mr. Cardone, this is the document that was attached to the email that we just looked at. Okay. So, this is the I'm trusting you on that. All right. Morgan, can I trust you? If we look at the email, Yeah. the last Bates number is Cardone Cap 00561251. And on the first page, it reflects two attachments. Okay. And if we look at this document, it's bait stamp Cardone cap 00561252. So it's the immediate proceed following document. So you're saying I can trust you because I there there's no date on the hello thing and there's no signature. So I don't know who in my team would have sent this, but I'll go with you on it. So this is the canned response for those asking to divest, right? Oh, objective. You you assume this is the canned response. Those are the words of Miss Harless. Okay. All right. But she Her name's not on here. My name's on here. I'm not saying it's not. I'm not saying it is either, though.

Cardone Capital did not provide refunds to every investor that asked for one during COVID. Right. I don't have a list of who we did or did not. I know we were scrambling during CO. It wasn't just the investors, by the way. Okay, keep in mind that I had 3,000 investors and 9,000 families, 9,000 tenants, 9,000 residents. I'm just asking about the investors right now. Mr. Gard, you have to answer. I am responsible to take care of the asset. The asset is what pays the investors. Okay? The asset fails, I have no cash flow. If the asset fails, I can't make my debt payments. Back to the conversation you made earlier. While other companies lost their real estate during COVID and all their equity, all the investors equity, I lost not a penny. We improved performance. We took care of our investors. We took care of our tenants. So, I got to tell you something. You're calling me on April 20th saying, "Give me my money back." I'm like, "Hey, bro. I ain't got time for this [ __ ] I'm taking care of the tenants first. Sorry. get in line, wait. And we made that clear to all our investors. The same month, Morgan, not only did we come up with a canned response, I guess, okay, we suspended all cash flow for April, May, and June. We projected all the way out to June, and I could have extended longer, but we didn't. So, in addition to not paying this kid, Brian, whoever this kid is, his five grand back, which I it looks like we didn't, I'm like, "Fuck, I I ain't worried about you right now, bro. I'm worried about the asset, and I'm worried about the residence." And that's the order, the asset, the the the the debt, taking care of the lender, and taking care of the resident so I can actually make you cash flow in June or July. Now, that all that being said, this kid probably got his money back. You don't know the answer to that though? Because I don't know his last name. If it's Ryan Bro, Ryan Brian Rob or whatever. I don't know who this kid is because I don't have a name. I'm going to mark this as exhibit. We're on 25. I am happy to find out who he is though and let you know. I'll look into it if you want me to. job. Anytime there's been a situation where somebody needed their money back, mom's sick, losing my job, I need the money back. I've given a lot of people their money back. I gave probably six 600 grand back last week from some of the people that don't want to be involved in this what they what they called a [ __ ] class action lawsuit. They're like, I don't want to be involved in it. It's bad karma for me. Grant, can you just send me my money back? I think we sent back 400 or 500 grand last week.

Let's look this next exhibit. Thank you. Do you recognize this document? Didn't I look at this this morning? Wasn't this the first thing I looked at? So, they all look very similar, but this is a set of objections and responses to a third set of interrogatories. We've looked at the first set. We've looked at the fourth set. We're now looking at the third set. Okay, it makes sense. Let's go one, four, and three. Yes. And you're worried about my math. And these responses, if we go to page nine, were submitted on February 3rd, 2026. Correct? Yep. Okay. Let's look at starting on page seven. It says, identify the investors whom Mr. Cardone has provided refunds. Right. This is all this is all you have. And then on page eight, This is this is the list of people who are identified as it says defendants state that Grant Cardone has purchased the interests of the following investors and it lists 18 people or yes 18 investors. Okay. Is this response accurate? Uh, I've given more people their money back than this. How many people have you given money back to regard? Man, lot. Anybody that pulls heartstrings, I I help. What is the total number of investors? No clue. I don't keep track of it. I don't worry about it. Mr. Cardone. I I I've given millions of dollars of investors money back. Kidding me. [ __ ] Pull my heartstrings. Tell me you got a bad situation. I'm like, "Okay, good. U I know another guy named Brian that I gave millions of dollars back to." In preparing for this deposition, did you review any documents about the investor the transfers that investors have made to you or to Cardone Capital employees of their investments in the funds? Do it again. In preparing for this deposition, did you look into the investors who have transferred or assigned their investments in funds five and six to either you or so a Cardone Capital employee? I looked at some of that like I'm looking Yeah. I mean I just we have today we have 20,000 and 20 investors. So when did I give these? What I'm looking at right now, when were these when were these exactly? These are dated February 3rd. Oh, I know when we said 2026. Yeah, that's this year. But when were these checks written? Because I see I see an entry, but I don't see the rest of the data. It says buyout effective dates are in 2020, right? Yeah. Okay. So notice notice, by the way, here's a guy that put 15 grand in. I don't know when he put it in, but he's looks like fund five and fund six. That means he put it in what what year was that? 1819. Yeah. We sent him back cash flow of 272. We bought him out in 2020 and I would have given him $14,727 six years ago. So, I gave him okay all but $200 of his money. Mr. Cardone, I didn't have to do that. I don't have any obligation. The contract says I don't have to give him any money back. And I gave him all but $272, which I paid him in cash flow and he got his tax write off. And I didn't have to do this [ __ ] Okay, this is just one guy. Now, there's more than this. There's more than these 18. I'm telling you right now just from memory because I'm going across all the funds Morgan not not uh well we're talking about we're here to talk about funds f five and six and you are you're here to talk about fun five and six and make me look like a bad guy I'm here to talk about all of what I do you designated yourself you said as the representative to speak today on Cardone Capitals behalf and I'm here to say all you asked to testify and be prepared to testify today to the instances of an investor's transfer assignment assignment, sale, or redemption. You are asked to be prepared to testify today as to the instances of an investor's transfer, assignment, sale, or redemption of his or her interest in fund five, his or her interest in fund five or fund six to the present. Now I'm not asking you for any specific instances but what I am trying to understand is since the last date that's reflected in this document is December 2020. Since December 2020, how many investors have you purchased the interests of? A lot. Do you have a rough estimate? I'm sorry. I need to interpose an objection. I didn't want to interrupt either your question or his train of thought in answering but our objection to this category you have is reflected in correspondence of council and I incorporate it here. We said we're not going to talk about particular transactions or refunds. We're not going to present a witness to do that. Don't agree to do that. So uh you you know that we have not agreed to produce a witness on that on that on that category and I'm not asking particular it's a lot alice is it two words a lot is two words not in Louisiana how many this is 2020 this is 2020 since 2020 roughly how many investors in funds five and six have you purchased the interest Everyone that asked. How about that? Everyone that needed their money back. Grant Cardone came to save the day. Roughly how many? By the way, I would buy all every one of the people involved in your your little case here. I would buy all their positions out today. I would take the whatever we whatever they put in. You guys won't even let me make this public. By the way, this is how corrupt the system is today. You won't even allow me. No, no. I want these guys to know. I want them to know. No, Mr. You won't allow me to tell the public. How much time left today? Excuse me. How much time do I have left right now? You have You take as much time as you want. I I I can give you as much time as you want. I can extend time here. Time is fabricated. So, you won't Your team won't even let me give the money back to these people. This is how corrupt this is. You guys want your 20 or 30% [ __ ] fee. It's going to cost the investors money while I'm sitting here saying, "I'll give you all your money back less your cash flow and you guys are going to hit it with a management fee. I'm I'd make money if you guys win." You understand that, right? The only person that would lose money in this deal. I don't even know how you guys sleep with yourselves. The only people that will be hurt are the investors. And if I got to fight another six years to defend this, I will. It's just it's just horrible what you guys are doing.

Cardone Capital provides tax forms to investors, right? K1s. And those K1s, they represent to investors what Cardone Capital represents the current equity of their share is, right? Plus tax plus depreciation. If I was recognized or unrecognized capital losses, if I was an investor of fund five who invested $5,000, I'd have to give you your money back. If I was an investor in five who invested $5,000 in the fund, what would you say is the equity value of my investment today? What are you representing on these K1s? In which one? Objective form in fund five. When did you come in? Let's say I came in right around the time that the fund closed. Was it 18? Was it 19? 2019. Were you in the first deal, the third deal, the fourth? Like I'm in fun five. You're giving me an impossible. What I'm trying to understand is what you say today is the equity value of an investment. Let's not be disingenuous. You are not trying to understand. You're trying to make me look bad. the equity miss is the does the K1 today that you give to investors say that the equity value of their investments is higher than what they invested objectively I'd have to see their K1 okay like you don't you're giving me a hypothetical situation it's in their portal like we created a portal for these people 247 365 access to your investment you should become an investor you should put your son in these investments any of the investors that you have bought out of the fund, have you paid them what you say the equity value of their investment is worth in the K1s? Objective form and it's beyond the scope. It it says right here what I paid him. Like we literally showed you 15 grand less the 272. I paid the guy $14,727. In addition to that, he would have gotten about a $30,000 depre tax write off. Okay. on this first guy. This first guy right here that you gave me his 14 grand that he was returned. He lost no money, by the way. Not a penny. He put in 15. We paid him 272. We gave him the difference and he got a probably in that situation a $30,000 tax write off. It's like I'm Santa Claus. These were and if they go if they go anywhere down the street, go to Wall Street, go to JP Morgan, Morgan Stan, nobody will do this for them. Nobody. There's nobody in the country doing this for the individual everyday guy except me. These responses were submitted on February 3rd, 2026. Since then, how many investors have you bought out of the fund? I told you just five minutes ago, maybe six minutes ago. You can repeat your answer then, Mr. Cardone. Uh, last last week I probably I I wrote checks for 4 or 500 grand. And how about the week before I'm going to do another I bet you I do another 4 or 500 grand this week that people don't want to be involved in your [ __ ] lawsuit. They don't want to be involved because they're like, "Hey, they're sending me these weird emails at 11:00 at night. Looks like I'm involved in something I don't want to be involved in. I just grant grant I don't want the headaches. I don't want the bad karma. I don't want the stink. I'll put money in your next deal. By the way, these people are taking money out of fund five and putting it into fund 29 because they don't want to be involved. How many people have done that, Mr. Fon? A lot. People call me uh we got we got uh I don't know a thousand a thousand contacts over a period of two or three weeks when you guys hired that ambulance chasing recruiter that you use. you know, wait till the public finds out what you guys actually do, how you stir these cases up. And then they sent you sent the email out to drag the internet and use my name. This is the game. And then you hope that people gl join the class action lawsuit. It's been six years. Six years, one person joined the suit. And you guys had to run this little game, this little trick you did the other night to get everybody else to get an email that says, "If you don't do anything, if you do nothing, you're in the lawsuit." And because you asked me, we had thousands of people emailing us, calling us, texting us, "Hey, bro, what's this about?" Okay, so we told them, "If you do nothing, cuz that's the game, right? If you do nothing, if you, by the way, didn't even see the email, if it went to your junk or your spam, you are involved in a class action lawsuit. How how nice, how generous. Instead, these people, we created a landing page for them. Cardone Capital do no Cardone, what's the name of it? Cardone class action is their uh so that when they add when they asked, we sent them to a link and they're like, "No, I don't want to be part of this. I want to opt out." I did a call last night. We had people opting out last night. You told people I did not activate this. I did not tell anybody, "Hey, you can opt out." I'm like, "Do whatever you want. You want to be involved in a lawsuit, be involved." I didn't even tell them you're going to lose money being involved. You told investors that once they opt out, you would be willing to buy them out of the investments, right? Objection mist's testimony. If they opt out, dude, if you opt out, you ain't part of it. They don't want to. They don't. These people don't want a part of your [ __ ] lawsuit and they want to be part of my investment. They don't want to be bought out. These are people who have asked you for refunds on their investment. Oh, no. No. That's different. See, this thing backfired on you guys. This is what your little your little, and I'm being respectful, scumbag, little recruiter, ambulance chaser didn't understand about Grant Cardone. These people love me. Okay? They love me. They love the investment. and they love that I pay them and they appreciate this opportunity. So instead of this uh you guys having people a bunch of people join a class action lawsuit, what they did was it backfired on you because they called me and said, "Hey Grant, um I just saw this issue. I saw this class action. I don't want to be a part of it, but I need some money right now. Can I can I be bought out?" This is how we've been raising. I raised $2 billion. Despite this garbage case, despite that, we've raised $2 billion.

Let's talk about topic 53. The doc, this is um the practice of deleting emails for departing employees not on litigation hold. And if you can I need question. Yes. Topic 53. And if we can go back to exhibit 231, if you can find that in your pile, that's the responses and objections to the fourth set of interrogatories. You're working me now. I am. 231. Can you show me what it looks like? Uh, it looks like sort of like this. Yeah. But it says fourth set. 229. Would you take 229 instead? No, it's 231. Yeah, there it is. Okay. Of course, takes a team, right? Yeah. Can you look at interrogatory number 15, please? You're wearing me down, man. It says ident are you in front of interrogatory? Okay. Identify and cite by Bates number the document retention policy explaining why Brian Rob and Lance Gisham's custodial files, including emails, were deleted upon their departure for from Cardone Capital LLC or any affiliated entity. Correct. Is it correct? Yes, that's what the question says. Yes, that's what it says. And the response at the bottom here subject to objections is defendants state that the email accounts from Mr. Rob and Mr. Gisham Mr. Rob and Mr. Gisham were deleted as part of the ordinary course of business for departing employees who are not on any legal hold. Correct. That's what it says. The this response it doesn't identify any we've never destroyed anybody's emails ever in this company. this interrogatory. You know what I'm saying though? There's no been no destruction. No destruction of emails, no destruction of property, no destruction of distributions, nothing. Period. Do you have Mr. Rob's emails still, Mr. Cardone? Mr. Rob doesn't work here. Mr. Rob's a criminal. He doesn't work here. He was fired from this company. Do you have Mr. Gisham's emails today? Mr. Cardone? He doesn't work here anymore. If he comes back to work here, he'll have an email address. There's no Rob at Cardone Capital. is the interrogatory response here. It does not we have a standard policy in this company. All emails get deleted. It is a standard policy used by the biggest tech companies and the banks in this country. Is that policy written down anywhere? I'm sure it is. There is no document that's identified in response to this interrogatory response. Correct. Whatever. I have five companies, five different companies. We delete emails of Why would I keep an open email? You worked here for a minute, you left. Your email is going to get deleted. Doesn't mean your emails get deleted. Where? You're sitting on a Gmail account. I'm sure it's archived somewhere in the cloud. The cloud of Cardone Capital. No, the Google cloud. Man, I don't have a cloud. Okay. there. How soon after Mr. Mr. Gisham left the company were his emails deleted? Probably within check for beyond the scope of the notice. Probably before probably he they were probably deleted before he was even terminated. Mr. Gisham was an acquisitions analyst, right? Yes. And Mr. Rob was the chief marketing officer of Cardone Capital. Correct. Rob has never been a mister and never will be a mister. He's a piece of [ __ ] He's a criminal. He's a crook. He's a fraud. He lied to us. He's lied to you. He's a snitch and a whistleblower. That, by the way, deceived the FBI and the SEC suggesting that we had some wrongdoing here and we didn't. Is there any regulatory obligation that you're aware of SEC or otherwise that requires Cardone Capital to retain the emails of departing employees who worked on the funds? Is there any as the object objective form no foundation and it's beyond the scope of the deposition rules? Is there any obligation SEC rules or otherwise that you are aware of that requires Cardone Capital to retain the emails of departing employees? Let me same objection and also Vegas to time. By the way, the SEC did a much more thorough investigation than you have. 28 months they spent in here. It's clear I could go to prison for destroying property, emails, data. Okay. We were asked by the SEC in April, May 2020. I think you have the letter. And they gave us an entire guideline. It's a pack about that big. Exactly what we had to do. Okay. I could have gone to jail. I could go to jail. They were here 28 months. If they would have found any evidence of document destruction, email destruction. They didn't find anything. The FBI was in here because of Brian Rob. The FBI. FBI, as you know, recorded video and audio. The S SEC was here for 28 months and after 28 months they sent us a letter saying we found nothing. No problems, no issues. Otherwise, I'd be in jail right now. But we but we didn't destroy anything because we have nothing to hide. Now, Brian Rob who left here claiming to be chief marketing officer raising 50 million. He didn't raise 50 million. He didn't raise 50 cents. He also said he had done tens of millions of dollars of real estate transactions. This guy couldn't he never he's not he hadn't done a million dollars worth of transactions and he left here went and got hired by another company that blew him out and has been out of work since almost six years now. Mr. You are aware that there are allegations in this Huffington in a Huffington Post article that shredding occurred at Cardone Capital of documents in 2020, right? The Huffington Post is a clickbait fake news garbage dump. They recited somebody else's uh one of these other YouTube clickbaiters. There was no destruction of assets. There was no destruction. There was no shredding ever in this company. Okay? We have never shredded a document at Cardone Capital. You will never find a person that says we shredded a document. I've been in business for 40 years. I have tax returns since I was 18 years old. Okay? Every year we dispose of content. I can show you a warehouse. Not that you care, not that you want to see it. I can show you a warehouse with documents going back to to 201 um 12 still today. Did Cardone Capital or anyone working at Cardone Capital hire a temporary staffing company to destroy documents? No.

Let's take a break. Come on. You don't need a break, dude. We're going off the record. The time is 6:2 p.m. We are back on the record. The time is 6:16 p.m.

Cardone Capital used the auditor Eisner Ampner to prepare an audit report for the period ended May 31, 2018. Correct. That's true. And after that, Cardone Capital used the auditor Kaufman Rosson. Is that right? Yes, we fired Eisner. Okay, that was my next question. Did Cardone Capital fire Eisner? Bang. Bang. Bang. Bang. Why? Not responsive. Too expensive. Weren't happy with his performance. Mostly nonresponsive. I'm overpaying these guys, but they respond. All right. I'm going to mark as exhibit 258. Um, and I'll get give you this tabbed version so you can find quickly what I'm referring to. Joe 258, we thought we lost you on the break. I was emails. I was going to take over the machine. 158, right? Yep. This is a big one right here. This is the biggest of the day. You saved it for last. Mr. Cardone, are you familiar with this document? This is our Yes. Our offering circula, which is my 131 pages. Yes. My questions with this document are pretty straightforward. There was a topic that asked about some of the numbers that are reflected in here. And if you could go to where the tab is. This isn't about Eisner anymore. No. Okay. Do you have a page number for me? The page number is 105. 105. And under table two it says manager's compensation. Do you see that on 105? Well, you see that everything on this page. There's a lot on this page, right? There's I'm looking at table two. Managers compensation summarizes the table two. Okay. Table two. I see halfway through the page. compensation summarizes the compensation the manager received from the projects closed during the most recent 3 years as of December 31, 2020. Right. Right. And it reflects here uh there's information regarding C5 that's fund five right? Yeah that's right. And C6 that's fund six right? Yeah. You have two numbers, fee and other. Yeah. So there's got it a couple there's on this thing fee five and which what's which other fund you want to talk about? And six. Okay. Five and six. Good. And in here it reflects information regarding the acquisition fee. Yep. The asset management fee. Yep. Due diligence expense. Yep. And there's one here that just says other. And the other expense for you turning the page. No. The other expense for fund five. It says 3,551788. You're losing me, buddy. I'm looking at the col the row that says other. Do you see that? It's on page 105. Okay. Okay. And in a footnote, if you turn the page on page 107. Yeah. Uh, there's a binder clip here, but the footnote that goes right is right next to other. It it said here includes reimbursements and marketing costs. What does reimbursements mean? Anything owed to the sponsor for work done to achie to uh acquire the property, market the investment, do due diligence, anything that was unpaid for in this case since 200 19. And those costs are not included in the asset management fee. Is that right? No, we're entitled we're entitled to we're entitled to management fee and other reasonable costs like any organizer or sponsor would be. Our fees actually are less than our competition which is Blackstone and Starwood which they would be as high as two or two and a half%. we charge 1%. And um, you know the the difference with those guys is they have a three and fiveyear fund and we have a 10-year fund. They're all moving now to a 10-year fund because they're they're model they're copying our model because it's a better model. What what's an example of a cost that might be included in this reimbursement category? It would be in our circular offering. everything we entitled to marketing, uh possibly due diligence that was set up. Uh, we pay we could spend I mean dude look we could do um anything that was done outside find to find the deal, do due diligence on the deal. Um, travel, third parties, brokers, agents, referral fees, cost of a deposition video. Mr. Earlier today, we looked at uh various underwriting for the fund properties, right? And the underwriting for every fund five and six property in just over Yes. includes a terminal cap rate, right? Okay. I don't use the term terminal cap rate, but what term do you use? Exit cap rate. Yeah. I've never even heard the the ter word terminal cap rate, but also never heard of unacredited until I listened to Raj the other day. The you personally select the exit cap rate assumptions used in Cardone Capitals underwriting. Correct. I pick a series of exit rates, cap rates. So, you're the one that selects them, right? Yep. you mentioned um when you select them what do you rely on to choose exit cap rates? Objective form I I basically look at what is the possible range of exits possible that history has has shown us is possible. So if the Fed prints money again, and they will, do you rely on it? Then then if they print like they did during COVID or like um they did during Obama, then cap rates are going to compress again. So the the the moment they print money, this is what most people know that are investing in real estate. Anybody that's trying to buy a home today knows that the house the house price got out of control because the government continues to print money. As they print money, rates go down. When rates go down, the the compression on the the real estate real assets go down with it. So, real estate values are very dependent upon uh interest rates. You said I look at what I'm I'll just wrap it up with this. I'll put a three and a half, a three and three/4ers, a 4%, four and a quarter, four and a half, a 475, a five, a five, five and a quarter, a five and a half, and I'm gonna look at my ex's all the way out. What number do I need to hit? How long do I need to keep it? When we hit that number, that's our target to sell. That's how we knew to to to uh to refinance Sawrass like we did just three weeks ago and return 14 million because our cap our our NOI hit a place where our five cap today is what we priced that at not a 4 and a half cap that we we expect to exit in 10 or 12 years. We hit a five cap that allowed us to refinance and send back $14 million which represents about 30% to the investors. Mr. you have an exhibit there, the 10X living at PCB. Okay. And if you go and actually it may not show up in the way that it was printed, but there's in those in the underwriting, it says it reflects an exit cap rate. Mhm. That's chosen for the underwriting. What does it say here? Let's see. Yeah. Oh, it's uh 225. It would be on the 10year, but I'm not sure if it showed up in the way that it was printed. Yeah, I don't see it. Let me see if I can you know this is this is again you know separate conversation but this is a 10-year perform and Freddy or the lender I think we might have done this deal with Arbor the lender Arbor this deal will not hit a I on the this kind of performing you're not going to see us You're not going to see a cap rate below probably a five. The cap rate that's reflected in the proforma. Yeah. Who selects that number? This is a this is a universal acceptable kind of almost like a not not exactly but like a general accounting rule of thumb. Mr. That doesn't answer my question for the underwriting. Yeah. If it includes a terminal cap rate, who selects that terminal cap rate? Object objective form. Okay. So again, I I answered the question. The cap rate when we purchased this was a 539. Projecting out 10 years, one year, three year, five years. We bought this asset in 2019. In 2022, this asset could have sold for three and a half cap. Um, that cap rate has come and gone now. You can't show me. You You said you were going to tell me what cap rate we used in your I think it's on the screen now. You look at the zoom. Okay. Five. Five. Is there a way to make it bigger? Let me see. What cap rate? What? I see Joe's gone. Where where am I looking? Oh, yeah. 55. I mean, I can sell this thing for a 5.57 right now. My question is just simply dude, the mark I told you the marketplace picks the cap rate. Okay. The conditions of the market, the combined with the interest rate, finding a buyer and a seller that agree on cap rate. Somebody could pay me a for cap on that property right now. the cap. If I had if I had Joe that lives in California and wants to leave California, it's not uncommon for him to 1031 his profits from California and say, "You know what? I'm willing to pay a for cap for that breakfast point deal because his cost is going to go from like 600 grand a down to 200,000 a door." And he's like, I just want to protect my capital. So, if I can find the match the right buyer and the seller and then we'll find that cap point. as long as I don't have any kind of urgency like you have urgency on your your flight tonight. I have no urgency at all. I'm gonna stay here till midnight when when I don't want urgency on our investors. That's what's so cool about our our our um our vehicle because we have extended amounts of time to find the right seller. And my my my goal is to find the right seller at the right time. Remember these are massive like you made reference to these are massive assets 300 plus units. My goal is to find the right some whale just moving through the freaking financial ecosystem like a JP Morgan or a Goldman S or KKR or Carlile one of these giant trillion dollar companies. Just crack them. Crack them and distribute the money to regular everyday investors. So the little guy is getting rich off the rich guy and that's what we do and that's the game here. And if it takes me 12 years, 15 years or 20 years, I have the time to do it based on our operating agreement. My question is really simple in that spreadsheet. It reflects a terminal cap rate of five and 3/4. Yeah. That I could achieve today. That number doesn't populate itself into the spreadsheet. Someone selects it, right? Somebody foundation. All these numbers get plugged in. This is not This is not made up. This is not a fantasy. I'm not I'm just Someone has to plug the number in, right, Mr. Rent is a pluggedin number. Actual rent. The number of units is plugged in. We didn't make it up. Somebody built the damn thing. It was 294 units. They plugged in 294 units. The rent is $1,58 a month. It's plugged in, dude. It's like a real thing. This This is not made up. This is not a fantasy. I'm not I'm not asking that. You're asking me how we get it. We plug it in based on the the the rule of thumb of that that marketplace. That panhandle is going to be a five and three/4ers. Take that asset and move it one hour and drop

It in Naples and now it's a 475. Take it, move it to Miami Bickl, and it's going to be a four and a half, or maybe a four, or maybe a three and a half. Take it to South Carolina today, and it's probably, or Indianapolis, is going to go to a seven. You could put it in all five of those locations. Find an idiot like Joe that has a big 1031. He might be like, "I don't care what I got to pay. I just want to keep, I want to just push my money into it," and that's who we're going to sell it to.

"Who approves of the number that's in that spreadsheet?"

"This performer was done for a lender. Okay. This, this is our lender document that we then share the most conservative model we share with our investors. We believe this is our underpromise and overd deliver model."

"You selected the number that's reflected in the spreadsheet, right Mr. Cardone?"

"Objection, misstated testimony."

"The, the cap rate we're putting in here. Morgan, you're not asking the right question. The cap rate we're putting in here is higher than we can sell the asset for today."

"Mr. Cardone, my question is so simple. It is just asking you who determines in this..."

"I've answered this four or five times."

"Do you, someone has to..."

"The marketplace? No. No. It's the boogeyman. It's the marketplace. Okay. I'm sorry. I cannot. It's not is..."

"If I want to determine what the marketplace is..."

"You call a professional like me, Grant. What is the cap rate in this market? Right now. That's what you do. You stay in your lane. Be a lawyer. Call a professional. I'm going to tell you. What do you do when you have roaches? You call a professional. Come handle my roaches. When you have need a root canal, you don't make up the decision. You go to the root canal guy and say, 'Hey, how do you handle this?' You call me and I'm going to tell you what the damn."

"Now, I go to other people that have more access to more data. CBRE, JLL, Kushman, Wakefield, like the list goes on and on. I'm not making this up. It's not a fairy tale. It's real estate. It's real. It starts with being a real asset in a real location with an address that has a bunch of things connected to it that are also real and public."

"I think I think we're getting close to my answer."

"No, no, you got your answer. You just don't like the answer."

"You said you call me. You determine what the appropriate cap rate is."

"You're making stuff up."

"Conflation. I call conflating. I call I call You're gassing me up right now. Someone has to choose the number that's reflected in the spreadsheet, right?"

"Someone decides what goes into Somebody chose the rents, by the way."

"Somebody plugged in taxes. Who made up the taxes?"

"Right. Let's let's..."

"Who, who, who plugged in the insurance number?"

"Mr. Cardone. Who..."

"That?"

"Is it you that decides what number is reflected in that spreadsheet?"

"Someone else."

"I don't even use the 10-year. Okay. So..."

"My guys use a 10-year with a 3% rent increase and a 2% increase in expenses. Do you understand? And I'm telling you as like clearly as I can, all of this is is figured based on a model that has been used since 1965 when REITs were first created. This is a 67-year-old process."

"I have asked such a simple question."

"I have answered the simple question."

"I have not gotten an answer to my question."

"That's not true. If you just..."

"I am going to move on."

"You, you..."

"Where?"

"Let me..."

"If I have not answered that question, I feel terrible 'cause I feel like I answered that question over and over again."

"Let's look. Give me one second. Mr. Cardone, you were investigated or Cardone Capital was investigated by the SEC, correct?"

"And the FBI."

"When did Cardone Capital first become aware of that investigation?"

"Uh, I forget the date."

"Do you know?"

"But I remember it like it was yesterday. Morgan, my banker, George Gonzalez, was in that building across the street, right out the over your shoulder there. That was my, that was my primary office. George and two of his associates. He, he runs City National Bank. And we had a meeting about some debt. And they were leaving the meeting. His two guys walked out. He walked them out. Then he came back in the room and said, 'Congratulations.' And I'm like, 'For what?' He's like, 'The investigation's over.' I'm like, 'What investigation?' And he's like, 'Oh, you don't know?' Well, I didn't know this, but when they start an investigation with you, the first thing they open is they call your bank. What's the, what's the rule? Is there some rule, FISA or something? Anyway, and the bank can't tell me. I said, 'George, why didn't you tell me there was an investigation?' He's like, 'I can't tell you. I'm bound by the banking regulations.' He says, 'Congratulations because they never open a case and don't find something and in your case they found nothing.' And that was the first time I was aware of it. At that time, we had our lawyer pull up Freedom of Information Act and then we got a document, I think my team will show you, you know, use it certainly in the jury trial, um, that they had opened an investigation, it was 27 or 28 months long and they closed it."

"No one at the..."

"Prior to that, I never knew there was an investigation."

"No one at the SEC ever told Cardone Capital that it was exonerated of all wrongdoing, right?"

"Yes. Yes, they did. Send me a letter. We found no wrongdoing. 28-month investigation. Exhausting. That cost them millions of dollars, by the way. You understand? Millions of dollars. Now, you want to, you want to now pick, you want to paint this like they didn't let me off? Yeah. You're effing right they left me let me off. What are you talking about? If they didn't let me off, I'd be in jail for doing something wrong. No, they dropped the case. And if you've done any, uh, any preparation on this since Bernie Madoff, because they let Bernie off. Okay, they let Bernie off. They opened and closed the case on Bernie. Since then, Congress went back and said anytime there's an investigation, they need multiple signoffs now so that Bernie never happens again. The fact that they closed this, opened the case, no problem. Closed the case after 28 months and an FBI investigation and a whistleblower. It means a big deal that they closed that case."

"I'm going to mark this as exhibit 259. I'm going to put it in the chat, um, because I cannot find my printed copy right now. Are you able to open it?"

"Oh, I didn't know you were talking to me."

"This master..."

"That this right here, Cardone Capital."

"Yes."

"O1."

"Yes."

"Yeah, I see this. How do I open it?"

"Open and edit."

"We can screen."

"Yes, I see it. I see it. I see it. We have concluded, Morgan. We have concluded the investigation. That's not exoneration."

"It is to me."

"So, you recognize this document?"

"I do. I do. I read it last night."

"Okay. Can you actually..."

"I'm going to get this frame put on my wall."

"Yeah. Can you read for me the sentence after that?"

"We have concluded the investigation as to Cardone Capital based on the information we..."

"To imagine getting this email, Denise. 'We have concluded the investigation as to Cardone Capital LLC. Based on the information we have as of this date, we do not intend to recommend an enforcement action by the commission against Cardone Capital.'"

"Continue."

"Can you continue, please?"

"How do they get away with this yet?"

"It's like a control BC by..."

"No, no, no. This that I have to read it. You read it."

"Go ahead. Okay. I..."

"You can read it. You read it."

"We can read it."

"Why are we are providing this notice under the guidelines set out in the final paragraph of Securities Act number 51310? Security..."

"Act release number 5310, which states in part that the notice must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff's investigation."

"When was this..."

"Correct? This was dated January 26, 2023."

"No, no, no, no. January what?"

"26, 2023."

"What year? 2023. Three years. Okay, look. Three years has gone by. Okay, you guys have been making all this noise. I've raised $2 billion. Okay, I have been exonerated. You don't want to admit that I've been exonerated, but you know they found clean hands, good dude, no problems. You need me to look nasty to win anything here. You're not going to win it because they're not going to win this. So, you want to say they didn't exonerate you? [ __ ] Yeah, they did. Yeah, they did. They dropped the suit. They, they left the enforcement. They had people in my offices. They, they were investigating employees. They, they had, they had a whistleblower or or snitch guy in here with the FBI recording us and found nothing. 28 months. And then you, you want to say they didn't exonerate you with this one line to make me look like a criminal."

"I am just reading. And since then, we have done, we have not missed one single month of distributions."

"Mr. Cardone, that's all the questions that I have for you."

"We're done."

"We are."

"You're done?"

"Got to pause."

"Okay."

"Um..."

"You can't be, I can't believe we're done."

"So, on, I think maybe two occasions during your, uh, testimony today, Mr. Ardo, and you made a reference to, um, something being potentially being stored on a cloud. Uh, do you recall having having mentioned that?"

"Yes."

"Okay."

"I mean, I..."

"I don't know where things are stored. I was raised, I was born in 1958."

"I keep things on legal pads."

"You're talking about a cloud that Google may have."

"I don't have a cloud. I don't have a cloud. I got a lot of, a lot of things. I don't have a cloud. I don't have..."

"All right. Thanks."

"I'm, I'm like, whatever the cloud is."

"I don't know where all these things are stored."

"I think I'm going to clarify it."

"I won't ask if you've doubled your money."

"Have I doubled my money?"

"Objective 400."

"I started with $3,000. There's about a billion three sitting there right now."

"Oh, have you doubled your money in real estate?"

"[ __ ] yeah, I have. I've more than doubled my, I 10x my money."

"Perfect. I have no further questions. Thank you, Mr. I want to add one thing for the record. You did a phenomenal job. You did a phenomenal job. Okay? You guys are stars."

"This concludes today's deposition. We're going off the record. The time is 6:45."