All Forum Posts by: Lesley Resnick

Thanks for responding.  This has not been the barn burner topic I thought it would be.  lol

Mining in the early days was profitable.  Today they say the overhead costs, computers and electricity exceed the value of the coins mined.

I know this will bring out the haters and the, "you don't understand bitcoin".  With that said here goes:

Bitcoin hit $23,000 this week.  What does that even mean?  You and I agree that today one Bitcoin is the value a used Honda Accord?  In December of 2019 it was under $4,000.  That is an amazing growth.  Imagine buying a house for 40 and selling it for 230 next year!  Sign me up.  

The premise is that the value of bitcoin is a currency, exchange it to get something in return.  As a currency it is inflationary, you get less for your currency over time.  This sounds great, but prices will rise at the same pace.  If you get paid once a month by the end of the month you will effectively make less than than the month before.  Given the option you will get paid in a stable currency.

For an examples Google: Weimar Republic, Venezuela.  While the causes of the Hyper inflation are different the effect is the same.

 No government or corporation is benefiting from bitcoin.  Regardless of your political bend it is an undeniable fact that governments want to tax and regulate and companies want to monetize.  In fact the early signs of the governments crack down are showing up in the tax code.  I can easily report currency swap trades, but if I trade bitcoin, then I must file a separate schedule for them.  

Facebook tried to start its own digital currency and was shut down.  Why would it allow Bitcoin to continue?

The Digi-dollar or the Digi-Yuan will render the Bitcoin useless as a currency. There is widespread agreement that a completely digital currency is necessary. The first government to issue one will have a significant competitive advantage in remaining or becoming the reserve currency. The pay off would be 2 people in third world with phones could transact in dollars with out any knowledge of the US or speaking English. While there are a lot of critics of the dollar and fiat currency, the US still owns assets. What is the Grand Canyon worth in a liquidation? Bitcoin on the other hand owns nothing and is accountable to no one. My bank gets hacked and I get my money back from them or the FDIC. What about Bitcoin, While block chain is a great idea, it is not fool proof. It will someday be hacked. To geek out a bit, I believe the block chain data is secure by its distributed nature, however access to it from the Client, (purse) will be compromised. If I have your pasword, (cats name, younges child, etc), I can access your account.

The press has been covering the fact that Wall Street is getting into Bitcoin.  These are the same people who brought us the Credit Default Swap and we all know how that turned out.

Bitcoin is speculation.  There will be people who make big money speculating and there will be a lot of losers in the game.  It is not investing and as long as people do not think they are going to retire holding bitcoin they should be fine and potentially could make a few bucks.  I, on the other hand am not a speculator.   

I question the importance of an accounting system for most investors.  If the property is stable you will most-likely have 2 transactions a month, mortgage and rent income.  The key is to use dedicated accounts.  Co-mingling accounts is a no-no.  

If you are renovating a house, you may have 20 transactions, more if you buy materials often.  I run my renovations out of an xls.    

The time and cost of maintaining a system does not provide me any additional value.  When I can no longer manage the business without an accounting system, I will hire a part time bookkeeper.  

 I do run a property management software that tracks rent, tenants, building repairs, etc.  If you run more than 10 properties, then it is worth the cost and time.

What did you buy? Where.

I have been looking at family owned land and they only know how much each member should get.  I tried to explain what my costs would be and they had no idea what I was talking about.  It was like watching a TV investor show.   You bought for 100 and sold for 200, you must have made 100.  I will probably wait for the right opportunity to build a road.  

In spite of what Ray Dallio and others say, there will only be FIAT currencies going forward, barring a catastrophic event that eliminates 90% of the population and all modern versions of government. 

Going back to the most basic level, people would carry around a sack of gold or other store of wealth and trade it.  Then the gold standard was created.  Someone holds onto the gold and issues you a piece of paper as a bearer note.  I know economists and some politicians think the gold standard is a great idea and going off the gold standard was the beginning of the end.  There is never a discussion of bad actor scenario.  A government that refuses to freely exchange their currency for hard the asset backing it.  Further, what if they just lie, we have enough gold to exchange every note, but in reality they do not.  If there was a run on the federal reserve, there is nothing they could do to recover.  Printing money with out gold to back it would be a crime and thus create a FIAT currency.

In my view all of these crypto currencies have a limited life.  The day the DIGI Dollar or the DIGI Yuan is released there will be no market for the other cryptos except among criminals and speculators.  The governments of the world are not going to give away control of the world's finance and their own economy.  A large scale adoption of crypots will result in there no longer be a reserve currency, this would create booms and busts the world has never seen.  Without the dollar as the world's reserve currency, WE WILL ALL SUFFER A LOSS OF STANDARD OF LIVING.  If you think we are prepared to go to war for Oil, wait and see what will happen to keep the reserve currency.

Will covid kill cash?

Digital payments have been growing by leaps and bounds but will this health crisis be the final straw?

I have seen a lot of local businesses request that you pay digitally or in some cases no longer accept cash.  Paying with cash is a far more intimate exchange than using a card.  You hand the cashier money and they make change from a draw that is filled with cash from pervious customers.  The clerk makes change and hands it to you.  It is counted, put back in the customer's wallet and they leave with the money and any germs that may be on the money.  

Some of the new apps and cards that you can just tap against the card machine reduce or eliminate the extra contact.

Collectively the federal government (Treasury, Federal REserve, DOJ) have been trying to limit and/or eliminate it for years.  Will this be the event that is needed to end cash as we know it? 

We are not in a RE crisis.  This is a health crisis causing an employment crisis.  Fix the health crisis and we can get back to paying off this absurdly large debt.

I hate to sound morbid, but all the doom and gloomers out there will like this....

The death toll is highest among the elderly.  Many of them have large holdings that are not as productive as they could be.  The general wisdom is that as you age, you take on more conservative investment strategy.  Many of the "Greatest Generation & Boomers", own their houses outright and are currently occupied by a one person, or by no one, since they are in a care facility.  The crisis will accelerate their passing as a cohort group, their properties will pass on to their heirs and in many cases be liquidated.  This will open up a stock of housing that has been off the market for 30+ years.  By definition, increasing the supply will lower the cost.

Lastly we are in for huge changes to everything in our lives.  No one knows or can predict where this is going.  All I can say is that in 10 years we will look back and say this is the point at which it all changed.  

I would contact the landlord they currently rent from.  If you buy the property and they are in a lease, you are largely stuck with them for the term of the lease. Unless they don't pay and or trash the place.

There is no exact science to this.  If the tenant is motivated to lie, it would be difficult to catch.  I will give you my brothers number as my employer and my friends number as my landlord.  It is only a matter of time before you run into a situation, where the tenant lied or there was a straw man renting the place for someone else.  

You will find the commercial landlords are tougher to get information from.  They need to deal with fair housing and privacy.  The smaller the landlords are more more likely to share detailed information.  I have never had another landlord lie to me, just to get a tenant out.  I find it unlikely you will run into that situation.  

Questions I ask:

How long have they lived in that location 

Have they ever been late?

Were they evicted?

Is there any reason you can think of that would make me not want to rent to them? 

It depends on the price point.

If you are higher end, then credit score matters.  If you are in a lower price point.  They generally do not have good credit and they have been in trouble at some point.

The goal is they have no evictions or recent criminal.  It is critical to verify employment and speak with the previous landlord.