Alternative Assets: The response to a frothy and overbid apartment market
Over this last year, we have analyzed over $18 billion in real estate.
We are at the phase of the cycle where capital allocators are at a flight for safety.
Many stocks are trading 35-50x earnings which are irrational.
We have seen many deals sell FAR beyond our risk profile. This leaves nearly no returns on the bone for our investors. This is against our playbook.
Real inflation numbers are above 14+% when measured in the metrics we used in 1980.
This is concerning, to say the least.
As fiduciaries of our investor’s capital, we can not place capital into deals that create no real yield for our partners. Many forecasts of national syndicators are completely irrational and insanely risky.
We aim to be completely risk-averse. While 100+ unit apartment investing in B-class assets is still a risk-averse strategy, what we are seeing is that every asset is being brought at a premium-risking return.
Where do we focus now?
Our focus has not shifted away from multifamily. We are still 100% focused on finding high-quality garden-style apartments with a light value add to create upside.
We have also expanded our vision to a few new asset types. One, in particular, is Bitcoin mining. I know you might be thinking, wait, what?
LISTEN TO THIS.
If you have not been paying attention to what has been happening in the oil and gas industry in Houston TX, or the fact that over 56% of Bitcoin mining is green energy, you are in for a ride and wake-up call.
Bitcoin mining has become one of, if not the most profitable businesses in the world.
While Texas is dominating Bitcoin mining in America, states like Wyoming are making it a mission to own 5% of the US hash rate. If you are familiar with economic game theory and incentives, we are seeing a state rush on Bitcoin mining. Some examples:
- Kentucky creates Bitcoin mining tax incentives
- Nuclear Bitcoin mining coming to Ohio
- 56,000 miners come to Georgia, $62 million investment
- North American Bitcoin Miners are GROWING FAST
There are many more, but I will stop and continue forward.
You may be questioning Bitcoins legitimacy still. Frankly, I would not be surprised in the slightest as most people do and we will do the best that we can to keep you informed with the basic principles in the weeks and months to come.
Imperative Readings to protect yourself this next decade
One reading on the history of money that will likely break your worldview is The Bitcoin Standard. This book spends almost ZERO time talking about Bitcoin and spends 99.9% of its time educating on the history of money.
Another key piece of reading that will allow you to check potential bias and broader your understanding of Bitcoin is the series by Parker Lewis, Gradually then Suddenly.
^^^ These two key readings will likely help you reframe what Bitcoin is not only as money but as a technology that is radically changing the fabric of our society.
Michael Saylor on Tucker Carlson (below)
An eye-opening interview with Michael Saylor discussing Bitcoin and its impact.
To conclude, the cost to mine a Bitcoin is in the range of $6,000 – $9,000. The value of a coin currently is $45,888.
The primary costs are power, your basic mining machines, management, repairs, and the physical building.
We are actively seeking out Bitcoin mining farm deals and building an arm of our team with industry experts to break into this wildly sustainable and lucrative market.
To stay up to date with our deal flow and to have private access to our deals join our investor list.