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All Forum Posts by: Vadim Kleyner

Vadim Kleyner has started 2 posts and replied 6 times.

Post: Why Are Bitcoins So Popular? Bitcoin Real Estate Investing?

Vadim KleynerPosted
  • Gates Mills, OH
  • Posts 10
  • Votes 5

Whether you’re thinking “Bitwhat?” or “I’ve been bitcoining for years...” digital currencies are a hot topic with consumers, investors and the media. But what is a bitcoin? And how does it work? Bitcoin is a type of cryptocurrency – a digital currency (meaning there’s nothing to hold in your hand) that circulates without a central repository such as the Federal Reserve. Of the 690 cryptocurrencies that exist—with a total market cap at about $8.5 billion—bitcoin is by far the largest and best known in the marketplace.

Users typically purchase bitcoins with physical currency (Dollars, Yen, Euros, etc.), then use their bitcoins to purchase products or services, or to invest. Bitcoin transactions are recorded in the blockchain (the decentralized public ledger of all bitcoin transactions) that is safeguarded against tampering.

That’s the short answer. The trickier question is: how important is digital currency to the future? And if you don’t use bitcoins today, will you be left behind? We’re bitcoin users here at Brelion for a reason: we know the importance of trying out new technologies before we implement them for our users. Here’s what we know, and what we’ve experienced first-hand.

BITCOIN: WHY NOW?

The Internet is designed to connect people without the limitations of borders. Digital currencies like bitcoin take this one step further – allowing people to make transactions anywhere without the barrier of national currencies. A bitcoin owned by a user in Japan is worth the same as a bitcoin owned by a someone in the U.S. With international borders being both blurred – and reinforced – the need for a “borderless” currency is greater than ever. And bitcoin is the first major alternative currency to gain acceptance in the modern era, with millions of everyday people investing or transacting via startups. In fact, venture capitalists have invested over a billion dollars in bitcoin (CNN).

THE PROS OF USING BITCOIN

In our experience, cryptocurrencies can save everyday people – not just tech-savvy users – considerable money, time, and worry over their purchases and identities. Some of the advantages of bitcoin include:

  • Enhanced Personal Security: Bitcoin protects against identity theft by maintaining personal anonymity of all its users.
  • No Borders: Bitcoin does not recognize international borders. In other words, if you use bitcoins abroad, you need not exchange your home currency for another country’s. Bitcoin users can send and receive money from anywhere in the world at any time. You no longer have to worry about borders, bank closings, or other restrictions to accessing money or making purchases.
  • No Third-party Interruptions: Bitcoin’s cryptographically secure peer-to-peer trading system prevents governments, banks, other financial intermediaries, or other bitcoin users from interrupting or manipulating transactions or freezing bitcoin accounts.
  • Low Transaction Fees: Transaction fees are kept low as a result of bitcoin bypassing intermediary institutions.
  • Low Inflation Risk: Bitcoin is gradually minted at decreasing fixed rates, creating a moderate and favorable amount of deflation for as long as new bitcoins are minted.
  • No Money Is Withdrawn: With bitcoin, you send bitcoins out, but no money is withdrawn from your bank account. Hence there are no hidden fees associated with transfers.
  • Easy to Carry: You could hypothetically fit a billion bitcoins on a USB drive. Try fitting that many dollars in your pocket...

DISADVANTAGES OF USING BITCOIN

Like many tech revolutions before it, bitcoins have had their share of bad press and confused consumers. A few issues have arisen, including:

  • Slow Transaction Processing: The bitcoin network handles less than two transactions per second. VISA can process thousands of transactions in that same second.
  • Price Fluctuations: The market value of bitcoins has fluctuated dramatically in the past few years. Its price in dollars lost two-thirds of its value after climbing 8,500 percent in the first eleven months of 2013. (HuffingtonPost) This volatility is mainly attributed to growing demand of bitcoins against a limited supply, as well as current events that affect digital currencies. For example, when the British voted in favor of leaving the European Union the price of bitcoins jumped up but the Dow went down. Many experts predict that the price volatility will relax as more businesses and traders use bitcoin. (Bitcoin.org)
  • Lack of Regulation and Oversight: Other bitcoin controversies have stemmed from political disputes and even some criminal behavior involving people purchasing illegal items anonymously with bitcoins. These issues have led some to suggest that bitcoin has become a “victim of its own success.”

Ultimately, bitcoin’s biggest challenge is image-related: While its technology-based algorithms and modern computation can potentially be faster, more secure, more transparent, and less expensive, many people find existing financial services—credit cards, bank accounts, Venmo, cash, etc.— to be fast, secure, transparent, and inexpensive enough. (Forbes) Bitcoin has yet to significantly challenge the strength of the dollar in most types of exchange; the dollar’s biggest asset – public faith – is Bitcoin’s biggest liability.

THE FUTURE OF BITCOIN

Despite these challenges, Bitcoin has shown remarkable resilience over the years. It continues to reshape transactions and finance on and offline, with more and more people drawn to its advantages: safe transactions and low costs without regulatory bureaucracy. Moreover, its behind-the-scenes trading technology has the unprecedented power to fortify all kinds of transactions and services across a multitude of industries. The more people learn about bitcoin, the more they will want to try it out to not only make purchases, but also to invest in securities such as real estate. Could Bitcoin be used to make crowd investments in the near future? Yes - we are doing it at Brelion https://brelion.com/home/bitcoins

On a personal note, I have bought and sold bitcoins, loaned bitcoins to others and collected interest on bitcoins. I sold my iPhone on a bitcoin market place OpenBazar similar to eBay and the transaction was pretty seamless. I’m a techy and alternative investment strategist with an unquenchable thirst for new technology, to me; bitcoin not only make sense but also is the future. It may take awhile for mainstream society to catch up with me but I’m confident it will happen and probably sooner than you think.

Post: Real Estate Crowdfunding Attorney from sunny SoCal

Vadim KleynerPosted
  • Gates Mills, OH
  • Posts 10
  • Votes 5

I would love to connect. Amy, I will send you PM

Post: Purchasing real estate outright VS through Crowd Funding

Vadim KleynerPosted
  • Gates Mills, OH
  • Posts 10
  • Votes 5

Yes both are, still you have consult professional, each case has it intricacies :)

Post: Purchasing real estate outright VS through Crowd Funding

Vadim KleynerPosted
  • Gates Mills, OH
  • Posts 10
  • Votes 5

As of this past December, buying is still more affordable than renting in 58 percent of U.S. housing markets, while rent prices outpace weekly wage growth in 57 percent of markets. (Realty Trac) These statistics, while painting an undesirable picture for renters in certain parts of the country, illustrate a golden opportunity for real estate investors expecting home values to appreciate. With the internet creating more investment outlets than ever before, investors such as yourself face several questions, including:

  • How should I invest in real estate?
  • How can I achieve high ROI with a minimum of risk?
  • Do I need guidance on my portfolio or do I want to invest with greater autonomy?

Two major trends have shaped real estate investing in recent years: Direct Real Estate Investing (such as turnkey) and Crowdfunding. These methods differ in some substantial ways, but each presents a unique way to profit from real estate.

An Overview

Direct Real Estate Investing

Real estate investors often purchase homes or condos that a real estate company has “turned over”, meaning already renovated and rented out to tenants. The general process is simple enough: You identify an area where you plan to purchase property, and then contact a company for a listing or for guidance on available or soon-to-be-available renovated homes in the area. Due diligence is an important part of the process—visiting and assessing the neighborhood, property, and the development company itself when possible for extraneous risks. After vetting a property, you advance straight to the closing process. The arrangement often includes ongoing management, so you can sit back and collect your cash flow.

Crowd Investing

Crowd investing, commonly called “Crowdfunding”, harnesses the power of the internet to fund real estate projects. In previous blog posts we examinedCrowdfundingin general, as well as forinvestorsandreal estate companies. Though the idea of Crowdfunding may intimidate more traditional investors, the best Crowdfunding platforms streamline their processes for ease-of-access. Moreover, an unprecedented amount of investors are inclined to embrace online investing on a mass scale in the very near future.

A Comparison

Diversity of Options

Direct Real Estate Investors could feasibly buyanytype of renovated, tenant-ready building. The most common turnkey investments, however, are single-family homes or small-to-midsized apartments.

Crowd investors choose from many different kinds of real estate projects—single-family or multifamily homes, apartments, large and small commercial buildings—most of which are awaiting construction or renovation. Some platforms host projects locally and globally. Most offer equity and debt investments, with minimum investments as low as $1,000. And while certain platforms only permit “accredited investors” to invest, there are increasing opportunities forallinvestors—especially among platforms that have filed underReg A+ exemptionsand/or upcoming SECCrowdfunding exemptions. These new rulings permit nearly anyone in the world to invest.

Guidance & Diligence

Direct Real Estate Investors do much of their due diligence themselves—non-local investors especially rely on local property managers, real estate agents, and internet sources for precise diligence on properties. Real estate investment companies help you complete and manage your investments; however, their diligence effort is less robust and far-reaching than that of Crowdfunding platforms.

Crowdfunding platforms usually do a substantial amount of diligence on companies and projects while Crowd investors can tap into a vast Crowd base to gather stronger diligence (imagine 99 investors capable of doing and sharing diligence with each other). Platforms encourage you to ask questions and voice concerns through email exchanges and phone calls.

Although Crowdfunding platforms cannot advise you on individual investments, they help mitigate risk by requiring real estate companies to facilitate project reporting, in addition to their own diligence.

Risk

Risk is inherent to all forms of investment. With Direct Real Estate Investing, risks may include anything from unexpected tenant vacancies, turnovers and maintenance issues. Direct Real Estate Investors can most effectively mitigate risk by hiring a good property management company and diversifying their portfolio.

Crowd investors face risks related to real estate company incompetence, the location of projects, and the project itself. Platforms offer no guarantees that any project will succeed, i.e. will be successfully renovated, turned over, and will generate returns. Preferred debt investors earn monthly interest regardless of how a project performs, but equity investors risk losing their investment entirely—especially if the real estate company defaults on a project.

Crowd investors can help mitigate risk by doing their own diligence, asking other investors (those familiar with the project’s location) pertinent questions, and by familiarizing themselves with all documents, which should outline unfamiliar risks and liability concerns. Of course, platforms can help mitigate risk on their end by providing quality diligence and scrupulously vetting companies.

Rewards

Direct Real Estate Investing is a methodical, long-term investment. Tenants provide you with monthly income while a property’s value appreciates over many years. Additionally, depreciation allows you to recover the renovation/maintenance costs. Profit results from patience, diligence, and strong property management.

Notwithstanding development risks, most Crowdfunding platforms offer above-average returns on residential and commercial projects. Because funds are deployed on a short-term basis, market fluctuations have a minimal or no effect on returns. In most cases, you benefit from value-add price increases rather than appreciation on your investments. Additionally, many projects include a waterfall option in which debt investors share in the overall profits.

Whether Crowdfunding or Direct Real Estate Investing, some properties generate higher returns than others. However the profit margin for both types of investing is comparable, albeit measured over different lengths of time.

Conclusion


As a recap, let’s sum up the general pros and cons of Direct Real Estate Investing and Crowdfunding.

Direct Real Estate Investing

Pros

  • You own the asset.
  • Tenants pay down your mortgage.
  • The asset is tangible (you can leverage it or live in it).
  • Appreciation over time: In thirty years, for example, an asset bought with $50K downpayment could appreciate 900%, yielding a $450K return on your investment.

Cons

  • Starting capital is more substantial—usually at least $20K.
  • Illiquidity: Assets cannot be easily or quickly liquidated; usually takes end of the lease plus 60 days.
  • Fewer opportunities for portfolio diversification among mostly single-family assets.
  • Must rely on property management company for ROI.

Crowdfunding

Pros

  • Professional due diligence supplements your own.
  • Starting investments as low as $1,000.
  • Greater diversification: With $20,000, for example, you can diversify among 20 assets.
  • Fewer post-investment fees.
  • Opportunities for global investments.

Cons

  • The asset does not belong to you.
  • Lower rate of appreciation means less opportunity to earn returns over greater length of time.
  • Limited opportunities for depreciation.


The debate between Direct Real Estate Investing and Crowdfunding should center around you, the investor: your level of confidence, experience, risk tolerance, desired ROI, and life circumstances. Crowdfunding represents a new opportunity for diversification and liquidity. Direct Real Estate Investing is a tangible, long-term investment. Neither method is inherently superior to the other, but each serves different interests. Direct Real Estate Investing and Crowdfunding are durable methods to profit from real estate in your neighborhood and well beyond.So why not invest in both?

Post: Favorite out-of-state turnkey investment areas?

Vadim KleynerPosted
  • Gates Mills, OH
  • Posts 10
  • Votes 5

Marco :)   Glad to see you !!!

Post: Favorite out-of-state turnkey investment areas?

Vadim KleynerPosted
  • Gates Mills, OH
  • Posts 10
  • Votes 5

Please take in to account that OHIO is a judicial state and it takes 2-5 years to foreclose on the house, so Cleveland is still dealing with first wave of foreclosures :)