RealCrowd on Hard Money Lending

Broadmark Capital's Adam Fountain shares his insight regarding the role of hard money lending in Real Estate investing in this podcast episode. I found his strategies for mitigating risk particularly interesting.  

While most of us do not have the liquidity of a multi-million dollar fund to make multiple loans at the same time, there are still ways we can use diversification to reduce risk.  One strategy is to invest in a fund like Broadmark Capital. Alternatively, investors can use crowdfunding sites to purchase portions of debt offerings to spread their investment capital out over several loans. 

My personal strategy is to make multiple investments of equal amounts so that the total investment income will be greater than any single investment. For example, if my average return is 10% and my investment unit is $1000, I will make at least 11 investments of $1000 so that my investment income can make up for a failed loan. 

RealCrowd is a real estate crowdfunding platform for accredited investors. However, they do have a lot of free learning resources available to the public. 

Fats Domino (1928-2017)

New Orleans Music Legend, Fats Domino passed away October 24th, 2017 in his home in Harvey, Louisiana.  Having personally lived  in New Orleans,  I experienced the impact his music had on the local music scene more than 50 years after the apex of his fame.  The city will pay tribute to him by holding a Second Line Parade on November 1st. 

Below are links to some of the obituaries that I personally enjoyed reading. And for Lagniappe, I have also included the link to one of my favorite Fats Domino songs.

Protectionism: a Euphemism for Crony Capitalism

While protectionism seems to have strong supporters within both major political parties, it often falls short when put into practice.  George Will's Washington Post editorial shows just how difficult it is to implement protectionist trade policy in the modern economy. Multinational corporations with international supply chains create an economic impact that extends well beyond the borders where their headquarters are domiciled. It is very difficult, if not impossible, to punish intended targets without causing significant collateral damage. At best, it is a futile attempt to appease a nationalist base. At worst, it is an opportunity to perform a favor for a special interest.

I wonder if the 7000 direct Bombardier employees or the thousands of indirect employees supported by $3 billion in materials Bombardier purchases from the US suppliers every year feel protected by the tariffs. Do more expensive airplanes and the resulting higher ticket prices help Delta Airlines and its customers sleep more soundly at night? 

Quadrupling the cost of an airplane seems like a high price for the American consumer to pay to protect Boeing's opportunity to create a competing plane in the future. Unfortunately, this is just one example of cronyism created by protectionism.

Like Mr. Will at the end of his article, I am left wondering,

 Who will protect Americans from the radiating mischief of protectionism?

Cryptocurrency Explained

While many of us have seen news headlines about bitcoin, very few of us have a good grasp of what cryptocurrencies actually are. Despite not having a clearly defined purpose, cryptocurrencies have gone from non existent to a $100 billion asset class in less than 10 years. It is probably too early to decide if cryptocurrencies are the new gold or the next asset bubble. Either way, there is clearly a lot of interest in learning more about cryptocurrencies and what roles they will fill in the future.

Chain CEO Adam Ludwin provides a great explanation of cryptocurrencies on a recent blog post.  He goes into great detail outlining the features and limitations of cryptocurrencies and decentralized applications in a way that the average reader can understand.  While Adam does suggest that current cryptocurrency valuations are probably too high, he argues that real value is the ability to make uncensorable transactions.

My top 3 current use cases for cryptocurrencies are included below (with examples). If you can think of any others please include them in the comments below.

  1. Transactions across national borders (Remittance payments)
  2. Transactions in countries during periods of hyperinflation (Argentina 1990s)
  3. Prohibited transactions in a failing socialist economy (Venezuela 2017)


Using Technology to Unlock Value in Real Estate

Listen as MIT's Steve Weikal and RealCrowd's Adam Hooper discuss some of the ways technology may impact Real Estate in the near future.  I found the sections regarding the Uberfication of buildings to increase usage of space during idle time particularly interesting.  They also discuss how implementing blockchain technology would help address many current challenges of researching title for real property.  Listen to the entire episode on the RealCrowd Website.

RealCrowd is a real estate crowdfunding platform for accredited investors. However, they do have a lot of free learning resources available to the public. 

Venmo Socialism

While CNBC's Ali Montag's weekend article warns readers about Venmo Socialism as it pertains to rising brunch cost, the impact of the economics lesson extends beyond the table. 

Water consumption, corporate tax code, taxpayer funded private stadiums, and large itemized personal income tax deductions are a few pertinent examples where costs and benefits are not divided equally. Even worse, they create a perverse incentive to increase consumption to further maximize the benefit for the recipient at the expense of the larger group.

However, splitting the bill is not inherently flawed. Paying back a friend for buying concert tickets next to each other, roommates pooling their money to buy a larger TV, a town using tax dollars to build a park are examples where pooling resources allows the group to increase their benefits without increasing their individual costs. Just like at brunch, it gets harder to evenly distribute the benefits as the size of group grows.

I hope the next time you come across a special interest asking for special consideration through the tax code, it raises the same ire as paying "your share" of your brunch-mate's two extra mimosas.

EconTalk on Populism

While they get a little off topic, Professor Philip Auerswald and Econtalk host Russ Roberts discuss the recent rise of populist movements across the globe.  Professor Auerswald's asserts that the density of urban communities enables cities to evolve at a faster pace than their rural neighbors.  It will be interesting to see how society and its leaders address this growing divergence. Click here to listen to entire episode.

Welcome to the Ever Curious Skeptic



Hopefully this will be the first of many posts. As this is my first foray into blogging, I greatly appreciate any feedback that will improve the experience. Please use the contact us to share your thoughts on how we can do better or content that would be good for the site. 

- The Ever Curious Skeptic