Who is investing in crypto\blockchain?

Who is investing in crypto\blockchain?

Rental Property Investor · Mesa, AZ · Member since 2019 · 138 posts · 144 votes

Hello BP Mates,

I'm a new REI investor, started at the beginning of 2020 and I now have a portfolio of 6 SFH acquired over the last 16 months. I'm taking a pause to see how the portfolio runs, to save up cash to expand into small commercial, and to hopefully see some cooling in the market over the next year or two. Cap rates are stupid low and I don't have the time or the network to look for off-market distressed opportunities right now.

I'm now investing relatively small amounts in cryptocurrency and I've made the decision to have 10% of my net worth in various blockchain technology assets. It is the wild west with very high risk and even higher returns and I'm investing with a mix of pure speculation and dedicated research into each project and how competent the management team is and what problems they are solving in the world. Just like people who invested in Etherium or Bitcoin 10 years ago who are now millionaires many times over, I anticipate massive profits for me over the next 5 years. If\when I hit the lottery, I will cash out a large portion of it, pay my taxes, and invest the leftovers into RE, reducing my net worth exposure to crypto back down to 10-15%. I see it as a very risky, but much less time-consuming and much higher risk\reward ratio alternative to flipping to raise capital for buy and hold. I started investing in crypto about two weeks ago and I have a 1300% annualized return, but I chalk that up to dumb luck that coincided with a decent dip in the market when I started investing. (BTC went down to $46K now its over $57K, other coins are doing even better)

I'm curious if other RE investors are investing in cryptocurrency and how this might work into your REI strategy for gaining capital. I've also been researching how blockchain technology can be leveraged in the real estate industry to provide more efficiencies and there are some fascinating use cases, like: tokenizing deeds, instant loans, more efficient insurance, etc.

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Lender · Phoenix, AZ · Member since 2018 · 440 posts · 256 votes
5y

@Matthew Terry I've began to get my feet wet in Crypto as well. It's gotten to the point where it doesn't make sense to not have any exposure. The returns are insane. It might not last, but win or lose, I'm glad to have some money in the crypto train. If nothing else, it sure does offer some entertainment value. 
On the REI side, I'd recommend getting a solid Line of Credit set-up on a rental or two. That way you lock in the LTV now based off these inflated values, and have funds available to leverage when the market does turn.

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  • Member since 2021 · 51 posts · 9 votes
    5y

    This is so ironic, or God is listening to my questions!   I was inquiring with a Face Book person who connected me with a Crypto Guru Queen that was trying to explain the  business, but I'm challenged  in my thinking on funds that I cannot physically touch , like it's "cyber space" currency, not sure if I should trust this FB person with my money

  • Rental Property Investor · Mesa, AZ · Member since 2019 · 138 posts · 144 votes
    5y

    @Jackie Jake

    I wouldn't trust anyone but your own research. I spent a solid 8-10 hours digesting podcasts, youtube, and white papers before making any decisions.

    I honestly can't remember the last time I used paper fiat money to buy something, its all electronic, just like crypto. You aren't "buying" digital money, you are exchanging one digital store of value for another with much higher potential to grow in value.

  • Member since 2021 · 51 posts · 9 votes
    5y

    Sounds like the stock market!   I will have to do more research as well, sounds like your research is paying off. Great !

  • Investor · Minneapolis, MN · Member since 2016 · 145 posts · 108 votes
    5y

    I just invested in Crypto through a Solo 401k.  50/50 Bitcoin/Etherium. A couple of things that I thought about.

    1.) I didn't invest more than I could stomach losing.  

    2.) I didn't use liquid funds, I'm a syndicator and need liquidity to secure deals and get financing.

    3.) Not having invested liquid funds gives me a long term approach, nothing worse then checking stock or crypto prices everyday.  I'm interested in where it will be in 20 years.

    4.) I think we are at a point where Crypto is starting to be accepted into the mainstream but not fully adopted so were are still relatively early. But that's all speculation and I am in NO WAY a crypto expert. In fact I know very little about it but I personally think it's prudent to get involved with it at this point on some level.

    1. Member since 2021 · 51 posts · 9 votes
      5y

      Thanks Justin, 

    2. Lender · Phoenix, AZ · Member since 2018 · 440 posts · 256 votes
      5y

      @Matthew Terry I've began to get my feet wet in Crypto as well. It's gotten to the point where it doesn't make sense to not have any exposure. The returns are insane. It might not last, but win or lose, I'm glad to have some money in the crypto train. If nothing else, it sure does offer some entertainment value. 
      On the REI side, I'd recommend getting a solid Line of Credit set-up on a rental or two. That way you lock in the LTV now based off these inflated values, and have funds available to leverage when the market does turn.

    3. Karen MargraveBusiness Member
      Moderator
      Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
      5y

      My son has been touting a block chain investment that he hopes will take off one day. It's called Candela, and it is used for solar energy that is sold on a shared community grid or ? something to that effect, it's pretty involved. 

      Personally I like how Bitcoin has a set number of coins that can be mined, kind of like how the gold standard used to be. If enough vendors, etc. start accepting it as payment, obviously it's a no brainer, but how long will that take? Also heard about one that will be used to stop scalping of sports tickets, etc. which to me if there's an actual practical value makes a lot of practical sense. 

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