All Forum Posts by: Jesse M.

Spencer, kudos to you for even opening up this line of thinking; you're ahead of the curve. Some of my thoughts as a hodler and investor : 

1) My intention is to spin the majority of my crypto earnings into CRE because I view CRE as a "safe" investment. As such, I'm not 100% sure of my comfort level in the syndication holding reserves in BTC. I am a maximalist and do consider BTC as a hedge against the dollar, but again, coming from the view of CRE as being a "safe" investment, I'd have to do some thinking on this. I feel it would have to be timed to the halving market cycles in some way.

2) A major consideration (if I were to contribute as an LP with crypto) is the tax implication. Right now, I pay 15-20% on long term capital gain when converting BTC to fiat. It would be a huge plus if I could send a sponsor crypto and pay zero tax on it! There isn't much clarity on this right now, as far as I know. Interested to see how this develops.

3) My views are not unique and you're right to pursue this in earnest. There will soon be a lot of crypto people wanting to diversify into RE and if you're on the front line, you're going to earn some nice cake. 

This forum skews our view. It seems there are a lot of low/middle class people trying to invest in real estate but the reality is that RE is a rich person's game. Crypto is just too high risk for those that already have wealth and want to secure it. I try to make money any which way. 

99% of the people on here think they are smarter than the average joe. So "writing off" something as new and groundbreaking as Bitcoin comes very naturally to them. Guess it never occurred to them that profiting from a risky asset and then using those profits to invest in a less-risky one could be worthwhile. They will buy in when the institutional investment comes and validates their "newfound appreciation" for immutable and fungible money. Oh, the institutions are already here? Oopsie.

Put a single-digit percentage of your net worth into Bitcoin and hold it for 10 years. If you don't do it actively, your 401k will do it passively for you, eventually.

Agree with @Marlen Weber. I'd put it all into a syndication as an LP. They'd be looking at quarterly cash flow in addition to appreciation without having to lift a finger. I don't buy into the whole "Chicago is a bad investment" chatter. There's plenty of meat on the bones here. 

I'd say that I want to see the best overall returns possible, in the long run. I'm not necessarily investing for monthly/quarterly cash flow but rather for total return for reinvestment after sale. So I'd probably go for higher IRR but my mindset may change as I get my hands in more deals. I don't like the idea of changing splits but would really have to see the numbers.

@Spencer Gray replying as an LP, the pref rate is obviously the first thing we're gonna see so there's some importance there but I'm personally OK seeing 7%, which I did indeed on a deal that just closed. Lower than that I would want to see a better split.

@Mahesh Sam the reason why those properties look attractive is because they are in unattractive neighborhoods. You won't find deals like that in "desirable" neighborhoods

@Account Closed don't waste your breath trying to convert anyone here on cryptocurrency. The ones that believe are already into it and the others won't be believers until their brokers start hawking it for diversification. Real estate investing is the home for luddites. Obviously there are savvy investors that are also in REI but I think you catch my drift.

Here's my question though. How are you tracking the BTC income for taxes? None of the current software offerings are good enough to track this so are you doing it manually? How are you "proving" the USD price of BTC on a given day when you take receipt of funds? 

 It's far west side Chicago; right on the edge of the city limits.

Nice job Gary. There are so many of these types of buildings in Chicago; I've lived in one many years back. Curious about your inspection process with all those units. I assume you didn't inspect every one? 

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