Real Estate Ventures
CryptoHippos currently has 4+ distressed properties under a right-to-purchase contract in the state of Florida. The market for distressed properties is unique. We are taking the approach of attempting to consolidate 5-10 proposals that encapsulate such properties in the Florida area. The reasons that the margins for operating a project involving a distressed property are substantially higher compared to a property on MLS (Multiple Listing Service) are primarily due to the unique availability of these situations, the acquisition strategies to find these deals, and the solution rolodex to identify a way forward with respect to time.
While we prosper with better margins to operate, we are limited to the organic generation of leads. There is no platform that encapsulates these situations and presents it in the way MLS, Redfin, Realtor.com, Zillow etc do with properties listed for sale; the best way to find these off market deals is to market, research, negotiate and empathize with an owner, establish a creative financing solution that fits your project's scope and also manages owner expectations. Due to these reasons, we can't identify if a house will be a short-term rental vs long term rental, a heavy renovation with a long term hold, a light repair with a long term hold, or a fix & flip. We also can not assume financing options, solutions, or comprehensive budget because real estate is a case by case scenario. We simply have to analyze on a case by case scenario as these opportunities present themselves. The key is proper analysis, deployment of capital, and execution. To be quite frank, there isn't a best answer that covers all use cases, yet there is a better answer than other answers for each individual case.
We will allow the governance of our community to make the decision for capital allocation once proposals are created with all relevant information provided. The reason we have taken the distressed route is due to the overwhelming data behind the fact that in the short-term, the financing and the valuation behind real estate favors the buyer so heavily, it's almost foolish to buy one rather than doing it yourself. From a financial perspective, us founder's have a fiduciary responsibility to this project to ensure that capital is not deployed in an irresponsible, rushed, or risky manner. The end goal is success with as much risk aversion and maximum upside. If the property fits the bill, an AirBnB rental is a model that we have expressed significant interest in, with the rental incomes net of home financing being funneled back into the community wallet.