All Forum Posts by: Vince DeCrow

@Joseph M. Than you. Since its in such an early stage that's hard to say. But here is a link to ATLANT's whitepaper. ATLANT calls itself the "Worlds Real Estate Blockchain Platform" and the whitepaper discusses, in depth, the idea of tokenized real estate ownership and the use of blockchain technology to create more efficiency and ultimately lower costs of real estate transactions. 

ATLANT Whitepaper

I agree that regulation seems inevitable. If you are really interested in decentralized organizations (like blockchains), there is a book out there I would recommend that is called "The Spider and the Starfish" that discusses the power, adaptability, and resiliency of decentralized organizations in our society. For example: Craigs List, Skype, and Wikipedia.

-Vince

Zack Bloom Stock markets are reaching all time highs, however I don’t think that means there is a crash among us. What are the reasons you think there may be a crash? I am bullish on the market due to the health of the economy and growth the country has been experiencing. The tax bill being nearly signed into a law also means there will now be be an estimated $1 trillion stimulus pumped into the economy via federal corporate tax cuts from 35% tax rates to 21%. Boom and bust cycles do tend to occur every 7 or 8 years, however there are many indicators that this bull market is nowhere near over. Real estate values also show alignment with boom and bust cycles, but nobody would be able to say that there is, for example, a 2 month lag between real estate markets and stock markets. The last market crash was highly correlated to real estate largely due to the misuse of CDO’s, but if another crash occurs it may not neccesarily be caused by real estate and thus have massive impacts on real estate markets like it did in 2009. In additon, real estate is a huge winner from the tax reform that was passed by the GOP today and this also points towards more aggregate gains for real estate investors. In short, I think if you are worried about real estate values fluctuating, look to invest in the largest markets that have significant history of high job and population growth. These markets would be the most resilient for real estate investments through any kind of economic swings. My company invests in: -Chicago -Denver -Houston -Austin -Dallas -Atlanta -Raleigh -Charlotte Vince

@Miguel G. Thanks. Very helpful and insightful.

@Ian McDonald The principals of my firm (a fund manager), generally put about 10% of their own capital into our funds as LPs. They pay themselves the same pref that all other LP investors get and then collect the promote from the GP side for returns that we earn over the pref. I think investing 10% of the total deal like you used in your example is a good rule of thumb for proving your alignment with investors...it really shows that you are not buying a deal just to earn a fee, but its a deal you feel comfortable investing that amount of your personal money in too.

-Vince

Chris Moore Refer to the following thread for further reinforcement of my suggestion about cryptocurrency vs crypto security tokens backed by real estate. I just sold a property using BitBay’s blockchain smart-contracts on the BiggerPockets forums http://www.biggerpockets.com/forums/223/topics/500242-i-just-sold-a-property-using-bitbay-s-blockchain-smart-contracts

Chris Moore You make some good points, but without supply and demand, how would price speculation ever come into play? For example: If you had an unlimited supply of real estate, or say, beanie babies, then nobody would be inclined to pay more for any for any piece of real estate, or beanie baby, than anyone else. Whether the average joe knows what the actual supply is or not, the price would not be going up without the law of supply and demand because they would otherwise be able to buy at the same price as anyone and everyone else if there was unlimited supply. I do not think cryptocurrencies are a reasonable investment alternative to real estate by any means today. However, for the average joe that you mentioned, is there a difference between a cryptocurrency and a cryptography based security token - probably not. Investing in cryptography based security tokens backed by real estate could become an option for real estate investors quicker than we know...very similar to the concept of crowdfunding. -Vince

Originally posted by @Chris Moore:

I don't think there is any relation between the two at all. 

I would disagree with your statement and have actually written a few blogs on this topic. Let me know your thoughts.

Bitcoin Cash and Real Estate

The Low-Down on Real Estate ICOs

-Vince

@Jared Forman The price of cryptocurrencies rises and falls based on the basic principle of supply and demand. Cryptocurrency's prices reflect the demand for that cryptocurreny's user network, called a blockchain. The blockchain's native currency's prices move based on how many people are using their blockchain...hence the dramatic rise in bitcoin prices due to dramatic rise in users of its blockchain. Bitcoin is not a fiat currency (like certain country's currency's) and I would argue that its unlikely that the value of those certain country's currency's have any impact on bitcoin.

@Tyrel McAllister The crossover from currency/cryptocurrency is made very easy by certain exchanges and websites that are out there today. The ease of trade is part of the reason for the skyrocketing prices.

@Kevin Yi Yes, however like Dave F. mentioned above, a 1031 is not possible with my company because our investments are structured through an LLC. Selling a property and buying an interest in a real estate fund LLC (or syndication) would not be possible because you are technically buying interest in a company - not a property of "like kind" to the one you previously owned. I don't know if all syndications have this legal structure, but all real estate investment funds would.

I have been involved, a few examples below. These properties can be googled, I can provide further details, and all information is available on our website. The people that posted before me about 6% returns are quoting returns based solely on a cap rate calculations and assuming a property is purchased with 100% equity, which is not the ideal way to invest in real estate.