Table of Contents
Cryptocurrency, blockchain technology, and NFTs have risen in popularity in recent years. Media outlets are now discussing crypto companies the same way the Wall Street Journal covers other investment assets.
Some stores are beginning to use crypto for certain transactions. Even the Federal Reserve has been monitoring the growth and impact of crypto along with other regulatory agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
If you are already investing in crypto, then you may be interested in diversifying your investment portfolio and trying out other assets. Many cryptocurrency and blockchain investors are taking interest in trying their hand at real estate investing.
Crypto investors are able to use a blockchain-based solution to gain exposure in real estate. But alternatively, they can also go for the more traditional approach, which requires them to learn about real estate basics.
It is important to learn about the relationship between crypto and real estate, as they are both very different asset classes with different investment characteristics.
Five years ago, most landlords and investors felt that using volatile assets like crypto to secure property transactions was too risky. However, cryptocurrency is now more commonly used, so investors are changing their minds. [1]
This means crypto investors who are looking to diversify and invest beyond the stock market can freely look into commercial real estate investing or buying rental properties like single family homes.
Cryptocurrency in Real Estate
Right now cryptocurrency is being used in the real estate industry to buy properties in the real world as well as in digital spaces. After all, it is a type of digital money that only exists in coding that is worked into a blockchain. It is never in a tangible form. All transactions are recorded on decentralized, encrypted databases. [1]
Cryptocurrency is supported by blockchain technology. It is essentially a ledger of digital assets and trades. This is how cryptocurrencies are recorded and tracked. All crypto transactions are verified in the records whenever sales and trades are made. Because there is no centralized authority, cryptocurrency cannot be verified or monitored by the government. [1]
Some real estate transactions use popular cryptocurrencies like Bitcoin. However, there are also certain transactions that use other cryptocurrencies specifically developed for real estate investments. Now real estate investors are keeping an eye out for cryptocurrencies and developments within that industry. Real estate agents and sellers alike are beginning to list properties for sale both in Bitcoin and in dollars. There are now landlords who accept rent payments in cryptocurrencies.
But this is also happening the other way around. Crypto traders are now also considering ways to get started on real estate investing. Those who have already hit big in the crypto market are now looking into tying their volatile asset to a tangible asset such as real estate properties. Others are balancing their portfolio by buying property using their cryptocurrency gains. [1]
Building up your digital wallet may help you gain tangible assets in the real world. So why is real estate investing so attractive for crypto traders and investors? There are a couple of reasons for this.
Why Crypto Investors Are Diversifying their Investment Portfolio with Managed Real Estate
Crypto and real estate have many investment characteristics that sharply contrast one another. That is what makes them work so well together as part of a diversified portfolio. Real estate is known for its strong cash flow and stability. On the other hand, cryptocurrencies can give investors faster transactions and lower entry costs. [2]
Real estate investing brings certain benefits for crypto investors. For example, using blockchain technology allows for efficient and transparent real estate transactions. Investing in tokenized real estate also allows you to generate passive income through rental distributions without the need for a property manager. [2]
Both the cryptocurrency and real estate markets are dynamic and subject to changes and trends. That being said, crypto investors may invest in real estate, particularly apartment complexes, to reduce risk. Investing in real estate can provide a more stable and tangible asset class that complements your crypto holdings.
Apartment complexes can generate steady rental income, providing investors with a reliable source of passive income. This income can be used to cover expenses, reinvest in other assets, or accumulate wealth over time.
Real estate can even act as a hedge against inflation. As the cost of living rises, rental income and property values may also increase, providing a level of protection against inflationary pressures.
Real estate also helps crypto investors with appreciation. While cryptocurrencies have seen significant price appreciation in the past, the real estate market has historically shown steady long-term appreciation. Investors may view apartment complexes as a way to build wealth over time through property value appreciation.
Real estate can help balance your investment portfolio if you are a crypto investor or trader because it is a tangible asset that provides stable cash flow. This is appealing for investors who prefer to hold tangible assets that they can physically own and have more direct control over.
However, it is important to note that there are drawbacks as well. Since accepting crypto is voluntary, real estate sellers may choose whether or not to accept cryptocurrency as legal tender in most jurisdictions. This means the seller has to voluntarily accept digital currency before you can use crypto to purchase real estate. [2]
Best Investment for Real Estate Investors: What is Multifamily Syndication?
For accredited investors who want to diversify their portfolio and not rely too much on crypto, there is one strategy that can generate a strong and consistent cash flow without stressing you out with responsibilities like tenant management or rent collection. Multifamily syndication solves two of the biggest problems real estate investors usually run into when it comes to multifamily investing.
First, it allows real estate investors to participate without the huge barrier to entry that is normally associated with buying an apartment complex or a condominium. On your own, you will have to pay millions of dollars to buy a large multifamily property. Real estate properties are generally expensive, but properties with multiple units are even more so.
But because multifamily syndication involves multiple investors pooling their resources together to purchase a single real estate property, it is much easier to get involved with.
Real estate syndication is a deal that is arranged by a syndicator who acts as the General Partner (GP). Their job is to formulate the business plan, locate the real estate property, build the legal structure, and look for investors who will serve as the Limited Partners (LP). Most of these deals are exclusive to accredited investors. [3]
Investors will provide most of the capital needed to obtain the property, and in exchange they get a share of the monthly rental income. Depending on the deal structure, they may also get a share of the equity upon resale. Every syndication deal is different.
Syndicators often create a limited liability company (LLC) or a limited partnership (LP) for the syndication deal.
Multifamily apartment investing has another big challenge for investors and that is property management. If you do not have experience when it comes to running apartment complexes and being a landlord, you may find it difficult to run a multifamily rental property on your own.
Not everyone has the time to run an entire apartment building, collecting rent, handling tenants, managing emergencies, paying for repairs, etc. However, this is essential to the success of your investment as you have to make sure your property is actually generating rental income.
This is a major challenge that requires time, money, patience, and lots of energy. This is why multifamily syndication is so appealing: property management is handled by the syndicator as well.
Even though syndication deals can be made with just about any type of real estate property, multifamily syndication is the most popular strategy due to the strong cash flow and the passive nature of this investment. It is the perfect choice for crypto investors looking for ways to diversify their investment portfolio.
Owning a large rental property has several benefits, and you can enjoy all of them without having to manage an entire apartment building by yourself, thanks to multifamily syndication. Investors participating in the syndication deal also share the risks involved, meaning even if the investment fails, it is still a much softer blow compared to being the sole owner of the property. [3]
Why Choose BAM Capital for Multifamily Real Estate Syndication
For crypto investors, having a tangible asset that produces stable income is ideal. With multifamily syndication, they also get to enjoy a passive investment with a strong cash flow.
The key is to find a reliable syndicator that you can trust. BAM Capital is exactly that.
This Indianapolis-based syndicator has a strong Midwest multifamily focus, prioritizing high quality real estate properties that are Class A, A-, and B+. Known for its consistent track record and vertical integration, BAM Capital will guide you through every step of the syndication process. [4]
Thanks to their vertical integration, BAM Capital can handle everything from negotiating the purchasing of multifamily investment properties with proven upside potential and in-place cash flow, to handling repairs, renovations, and property management. [4]
This company is also known for its award-winning strategy that mitigates investor risk while creating forced appreciation. In fact, this syndicator now has over $700 million AUM and 5,000+ units.
No investment is without risk. Make sure to consult your investment advisor or speak to a BAM Capital investment team member before making any financial decisions.
For accredited investors who want to enjoy the passive income and all the other benefits of being in a multifamily syndication, look no further than BAM Capital. Schedule a call with BAM Capital and invest today.
