Brief Summary
The speaker discusses merging real estate and Bitcoin investments to create a diversified portfolio that leverages the strengths of both asset classes. They argue against viewing Bitcoin and real estate as mutually exclusive, advocating for their integration to capitalize on liquidity, stability, and growth potential. The speaker details their strategy of using real estate cash flow to acquire Bitcoin, aiming to create a unique investment product that combines the benefits of both worlds, and eventually taking it public.
- Diversification through merging real estate and Bitcoin.
- Leveraging real estate cash flow to invest in Bitcoin.
- Creating a unique, publicly traded investment product.
Introduction: Bitcoin vs. Real Estate - Why Not Both?
The speaker opens by addressing the common debate in the Bitcoin community about whether Bitcoin or real estate is the better investment. They argue that this is the wrong question, suggesting that investors should consider integrating both asset classes into their portfolios. The speaker shares their experience from a space where they advocated for including real estate, Bitcoin, and stocks in investment strategies, rather than pitting them against each other.
Merging Real Estate and Bitcoin: A Synergistic Approach
The speaker details their approach of merging real estate and Bitcoin investments, highlighting that their real estate holdings generate cash flow used to purchase Bitcoin. They emphasize the complementary nature of the two assets: real estate offers stability and low volatility, while Bitcoin provides liquidity and growth potential. The speaker points out that illiquidity can be beneficial for investors, preventing them from making hasty decisions, and that time can resolve many investment challenges, particularly in real estate and Bitcoin.
Cardone Capital: Integrating Assets into a Public Company
The speaker discusses their plan to integrate real estate and Bitcoin into a publicly traded company, Cardone Capital, to leverage the advantages of both asset classes and the stock market. They criticize the linear thinking that pits assets against each other, using the analogy of Coke versus Pepsi to illustrate that both can be viable options. The speaker highlights the benefits of real estate, such as leverage through loans, tax efficiency through depreciation, and equity principal paydown, which are not available in Bitcoin.
The Advantages of Combining Real Estate and Bitcoin
The speaker explains that real estate offers leverage, tax efficiency through depreciation, and equity principal paydown, while Bitcoin does not. However, the cash flow from real estate can be used to buy more Bitcoin, creating a synergistic relationship. Both assets benefit from appreciation and the potential devaluation of the US dollar, while real estate also benefits from rent growth. The speaker dismisses the idea of solely investing in Bitcoin, emphasizing the importance of providing value through real estate, such as homes and jobs.
Creating a New Investment Product: Real Estate and Bitcoin
The speaker explains why they can't take a Bitcoin-only fund public but can create a new product by merging real estate and Bitcoin. They envision a long-term mortgage product that is friendly to both Bitcoin and real estate, potentially a 20 or 30-year mortgage that combines the strengths of both assets. This product would be designed to avoid margin calls and leverage the cash flow generated by the combined investments.
The Miami Deal: A Case Study
The speaker describes a recent deal in Miami, Florida, involving the purchase of 346 units for $122 million, with $15 million allocated to Bitcoin. The purchases are made in cash and placed into an LLC structure. The speaker then offers investment opportunities to their audience at the same price they paid. The speaker plans to create 12 such funds this year and merge them into a public company, anticipating a double or triple increase in valuation.
Fund Economics and Risk Mitigation
The speaker discusses the economics of the fund, explaining that adding a Bitcoin component can increase the internal rate of return from 15-18% to 35-45% with minimal risk. They emphasize that the real estate provides a safety net, even if Bitcoin were to drop to zero. The speaker highlights that this approach is attracting individuals who are new to Bitcoin, as they are investing in real estate that, in turn, invests in Bitcoin.
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