Many real estate investors have begun to realize that New York City may not be the best place to do business in light of the recent absurd ruling against former President Trump in his fraud case. One such investor, Cardone Capital’s Grant Cardone, has started telling his teams to pack a bag and leave New York for fear of similar persecution.
In an interview with “Fox and Friends” Steve Doocy, Cardone said: “We thought this year was the opportunity to come into Chicago, California and New York City. I’ve been waiting for 40 years now to invest in that marketplace. I was completely confident this was the year to come. And when that ruling happened, it was like, pencils down. Don’t touch it. Don’t go there.”
Cardone shook the industry when he posted on X that his firm would “immediately discontinue” all projects dealing with New York City real estate, choosing to focus on the Red States of Texas and Florida. He also stated that New York has risks “that outweigh the opportunities” with regard to property values, and he feels the state has shown its political bias when it comes to doing business.
In a flippant but painfully accurate reflection of the state of affairs in New York, Cardone said: “We invest for 14,000 investors at Cardone Capital that depend on cash flow. And if I can’t predict the cash flow because of some ruling, or because of the migrants, or because I can’t evict people, New York City just keeps doing every single thing they can to sell real estate in Florida, not sell real estate in New York.”
The stunning $355 million ruling against President Trump has sent ripples through the industry, most echoing the sentiments of Cardone. “Mr. Wonderful” Kevin O’Leary, head of O’Leary Ventures and one of the sharks on the wildly popular show “Shark Tank,” had some scathing criticisms about New York. He said: “New York was already a loser state, like California is a loser state. There are many loser states because of policy, high taxes on competitive regulation. I would never invest in New York now. And I’m not the only person saying that.”
Cardone broke down the crux of the issue as it pertains to New York. He continued: “Loan proceeds are based on the value of the property. They’re going to require me to actually underwrite my property on the cash flow, the income of the property and what valuation I believe that property’s worth. The broker also put a valuation on it. And then the bank is also going to use at least one other appraisal, maybe two, or independent of me.”
He further explained relative to the Trump case, “There could be as many as five appraisals on that. The value that I’m going to put on the property. Keep in mind, when I’m buying something, I’m not thinking about selling it the next day. In the case of Trump, he’s not selling any of this stuff. We want the property for the cash flow… every seller is always going to push the price value up based on the future, not based on fraud.”
In perhaps a foreshadowing of future business in New York, Cardone concluded: “We were going to put $1 billion in New York City this year. We were going to put $1 billion in Chicago and maybe another billion in Los Angeles. And we won’t touch any of them now. Texas, Florida, Arizona: go hard, go big and go long.” It’s bad news for New York, but voting has consequences, and there are plenty of free states to invest in where you don’t have to fear losing your shirt like President Trump.
Watch Cardone here:
Featured image credit: By Er-nay – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=67718860
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