Help me see my blind spots?

Question

Hi! I have a good problem. Our buy & hold (SFR, MFR & commercial) portfolio has appreciated substantially and it is an absurd sellers market right now, crazy not to sell as the cap rates don’t make sense. We are closing 2 escrows tomorrow & just received an outrageous offer on a commercial property we don’t even have for sale.

The problem: we retired at 40 (5 years ago), live on the cash flow from our properties and don’t want to go back to work! Where to invest? We cannot invest where we live (above reasons) and haven’t figured out how to find a good cash flow market AND feel comfortable being absentee. And we don’t love landlord ing. How else to cash flow?

Chris Seveney · Answer

@Sarah Brown

Stick your cash in a money market account for the next 6-12 months so it’s readily available and then buy back the properties you just sold that someone overpaid for once they default...

Sarah Brown · Answer

Thanks Andy!!!

Andy Mirza · Answer

@Sarah Brown For note funds, look at the profiles of the frequent posters on this forum category. For funds involved in different aspects of real estate, find the frequent posters in the forum categories of the real estate classes that you're interested in. For example, if you're interested in multifamily real estate, find that forum and you will find active operators. Also, do a search for "syndication." Good luck!

Sarah B. · Answer

@Andy Mirza

Thanks Andy - this Avenue has been appealing to me but I havent started deep research yet. Have you worked with any that I could start investigating?

Andy Mirza · Answer

@Sarah Brown You can also find and vet funds that invest in notes and real estate. It allows you to be the passive investor while others do all of the work and allows you to invest in assets that interest you such as non-performing notes, performing notes, mulitfamily real estate, or other types of commercial real estate that you might already be familiar with. One of the keys to this type of investing is to do the due diligence and research on the operators of the investment fund.

Davido Davido · Answer

@Sarah Brown, at this point in time the simplest and most secure investment you can own is bitcoin.   Over the last ten years nothing has come close to the annual appreciation of bitcoin.  It is possible to keep your Bitcoin at an exchange that will provide you an additional 6.2% annual interest (paid weekly).   Some exchanges, like Celsius Network are well run, with conservative, seasoned and visionary management.  Bottom line is that multiple cryptocurrency exchanges pay better interest on the world's most wanted (and hardest) currency, which also has the best annual appreciation record of any asset ever known.   There are multiple crypto currency exchanges that will pay more interest on the bitcoin you hold with them, than you can get on deposits for any national currency.

Better yet, the long term outlook for bitcoin is stunning.  Bitcoin is going mainstream.  Major corporations are increasingly holding it as a reserve asset.   Demand for bitcoin is widely expected to increase dramatically next year 2021, and to keep increasing steadily thereafter.   The supply of bitcoin is strictly limited to 21 million (18.5 million currently exist).  Nothing else comes close to bitcoin as a long term store of value, though currently silver and gold are also good choices -especially for balancing a portfolio.   There are multiple companies now digitizing silver & gold holdings and making the metals available with blockchains and credit cards, -like Kinesis, Lode.one, one gold etc.

Here is average annual price of bitcoin (365 day exponential moving average price) at the end each year since 2010.

2009 - (First bitcoins are created, virtually no tradeable value)

2010 - Less than $0.004

2011 - $0.51  (Over 100 times previous average)

2012 - $5.03  (Ten times previous average)

2013 - $9.68  (Nearly doubled previous average)

2014 - $282.6  (29 times previous year's average price)

2015 - $491. (Nearly doubled previous years average)

2016 - $367 (Only year bitcoin's average price has not increased)

2017 - $616 (Nearly doubled)

2018 - $6,123 (Ten fold increase)

2019 - $6.180  (Year of price consolidation -likely to result in explosive growth in 2020)

2020 - $10,058  ($16,300 on Nov 13, 2020)

And here are the lowest bitcoin prices for each year since 2010.   Despite high volatility,  only once (2015) has Bitcoin's failed to increase its lowest price each year.  2010 - $0.003 (1/3rd of 1 cent)

2011 - $0.62

2012 - $5.29

2013 - $65

2014 - $200

2015 - $185

2016 - $365

2017 - $780

2018 - $3200

2019 - $3820

2020 - $3858 ($16,300 on Nov 13, 2020)

At a minimum, you'll do yourself a favor to learn about bitcoin.  Bitcoin is based on block chain technology which is revolutionizing the world of finance.  During this decade, all countries will be digitizing their currencies using block chain technology.  So it's coming whether you get in early or not.  Over the last 10 years nothing has appreciated more than bitcoin, and it is just getting started.   For the sake of your posterity, get yours now.

Davido Davido · Answer

If you want minimum volatility, you can put funds into a stable coin like U.S. Dollar Coin (USDC) or Tether (USDT).  Those currencies promise zero volatility.  They maintain a one to one exchange with the US dollar.   Celsius currently pays 13.86% annual interest on Tether crypto tokens held on their network.  However, getting paid back in $ is less likely to be a good long term buy and hold strategy.  Until the dollar is directly tied to a fully digitized blockchain it will continue to decline in relative to BTC or Ether.

If you did decide to move more into bitcoin, now would be a good time.  A great many Bitcoin analysts expect bitcoin's price increasing another 25% to $20,000 by year end.  An even better year for BTC is expected in 2021.

Sarah Brown · Answer

Thank you Davido - we have Bitcoin holdings but not interest bearing so that’s intriguing; I’ll research it. My initial thought was that it seems pretty volatile with all the big swings when we’re seeking a monthly income but it’s worth allocating a portion to. Thanks again!

Sarah Brown · Answer

Thank you. Would you have any resources to learn more and or places to purchase them? Do you have notes in your portfolio?

Dan Deppen · Answer

They aren't without risk, but you could buy some performing, cash-flowing, mortgage notes. As long as they continue to perform you wouldn't have to deal with landlording.

Help me see my blind spots?

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