The new great crypto collapse looks like great news for real estate investors.
While it is always sad to see good individuals duped into losing money in scams and poor investments, those who have wisely been disciplined to put their capital into real estate should be very happy right now.
The New Crypto Ice Age
In case you missed it, the collapse of crypto exchange FTX has rocked the investment world, leaving a million or more of its investors owed billions of dollars.
Among them are even once highly regarded startup investor VC fund, Sequoia Capital. Which has had to apologize to investors for losing in excess of $210M of their own investors’ money in FTX. After having to write off their entire investment to zero.
After having already been in a ‘crypto winter’, this could be the last straw that throws the space into a new ice age.
Blockchain and digital currencies may be the future in the long run, yet many more funds and companies that they have backed in this space are likely to fail in the meantime. Especially those playing with NFTs.
Even bonds are looking shaky. With cities like San Francisco admitting they are facing a $200M shortfall in income as office vacancies soar to 30%, and human capital flees.
Flight Capital Likely To Head To Real Estate
Hopefully investors of all types and sizes are waking up to the fact that chasing ghosts on the fringes is even worse than gambling in Vegas. You just get all the losses, without any of the experience.
Even gold has become scary, with so many questionable websites, and poor pricing. Plus, it does not produce income. Which is so very much needed with no jobs out there, and an anticipated period of high unemployment, high inflation, and no meaningful economic growth.
Real Estate Investment Strategies
There are many opportunities in this market. You may buy and hold for income, tax benefits, and value add returns. Or flip and cash out to meet rising demand. Especially to those willing to accept low cap rates in exchange for more safety.
Pick Who You Invest With Wisely
More important than any specific asset class or strategy, is wisely choosing who you invest with. Big names, news headlines, and lots of zeros or parties in the Bahamas clearly don’t mean your money will be well protected.
Instead, look to invest with those that have not lost investor money in the past. Even during crisis moments like COVID and the 2008 Great Recession.