The Real Estate Hustle-Culture Con That’s Exploiting Investors and Wrecking the Housing Market

Next came an ice storm that hit Austin in February 2021. “When we had three days of sustained below-freezing temperatures,” said Reynolds, “the fire water lines ruptured in our building and half the building was flooded.” Management of the building dragged their feet on repairs after the flood, and Reynolds ended up with leaked water sitting stagnant behind the plaster of his bathroom, eventually leading to a severe mold problem. “It was starting to affect my health, and they wouldn’t come and do anything.” Reynolds and his family eventually decided to leave the building—only to have one of the apartment’s heaters cause a small electrical fire on their move-out day.

In Weston, Florida, insurance salesman Oors Fermin lived with his wife and two children in one of several buildings that Cardone purchased in the area. Fermin says that they’d been dealing with poor maintenance in the rental apartment before Cardone took over. But once the building gained Cardone’s “10X” brand name, the situation changed “drastically.” No repairs were completed, says Fermin, but when it came time to re-sign the lease, Cardone’s company had increased the rent. The following year, the rent increased again. By that time, water was seeping in from the floor (which Fermin thinks was likely due to problems with the foundation) and management of the building did little to address the issue. “We were like—you know what, we’re fed up with this. And the rent was going up another $300 or $400.”

Residents who live at Cardone’s properties often struggle to get repairs done while suffering steep rent increases. But that seems to be of little concern to Cardone, who insists over and over again that his funds are raising up the video-watching masses by letting them in on the hidden world of real estate profits. “The real estate we are buying has traditionally been available only to the large institutions (such as Blackstone, Vanguard, Fidelity, Fairfield) and out of reach to everyday investors,” Cardone said as part of a promotion effort for one of his latest real estate funds. “I am making extraordinary investments available to the everyday person.”

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