Incentives Rewired: Bitcoin’s Role in Reshaping Real Estate

It all comes down to computers communicating. The information superhighway can be a confusing mix of on ramps and off ramps. Bitcoin is worthless artificial gold. Is it still rat poison? Probably rat poison squared. We need to get into the world of OK, this is actually foundational technology. What the Internet of money? Does is it creates a single. Network which can do a microtransaction to a giga transaction. The Internet is going to be one of the major forces for reducing the roller gun. The one thing that's missing that that will soon be developed is a reliable E cash. All righty, welcome back to Final Settlement. Today is Monday, April 21st, 2025. Bitcoins pumping a little. The rest of markets are are down. Exciting times. And we've got a great podcast for you today. Two fantastic guests, Leon Wankum and and Kelly Lannon. And really today's pod is going to be a broad overview of of the convergence of Bitcoin and real estate. And I would say Kelly and Leon are really the two most prominent sort of foremost minds at that intersection, really articulating the ways in which Bitcoin can be infused with, with real estate de risk real estate to a certain extent. And really, you know, one thing that Leon, Leon has talked a lot about is, you know, there's just monetary premium associated with the real estate market today, 300 trillion roughly. And most people use real estate as a store of value today. For the past, you know, 50 years or so since we left the gold standard, real estate has been a form of money in the sense that people use it as a store of value. And so now that we have Bitcoin, the sort of store of value perfected digital sound money, we may see that that monetary premium premium erodes over time. And there's a lot of opportunities to build products around that convergence of of these two asset classes. And so super excited to have the guys on on the show today. How we doing voice? Thanks. For having us. I'm particularly excited not only because the the price is bumping this morning, but this is a conversation long overdue. I feel like we've gotten more interest on the on ramp and early riders side around investors and developers looking to infuse BTC. And then I consider Leon and Kelly good friends. And I think Kelly, me and you might go back to 2020 bitlock boom when there was only about 180 people crazy enough to to descend on Texas, Dallas, TX to attend a conference in the middle of COVID. And Kelly since back then and Leon as well. But Kelly, I just remember viscerally explaining how real estate and Bitcoin needed to be infused in Bitcoin loans. So it's it's an awesome and a privilege to have you guys talk about this today. Yeah, that was a good time. I mean, I would say, I would say both of you are also sort of emblematic of the type of individual that you know, we try to search out and also try to find us in terms of early riders on ramp, the Guild that we launched last week, it's, it's folks that have sort of external expertise if you will. And so, you know, both of your expertise in real estate, then finding Bitcoin and sort of trying to merge those two things is something that we're going to see across all industries over the next several decades is people taking their experience and learnings from other parts of the world and society, other asset classes and bridging the gap to infusing Bitcoin in those things. So maybe that's a good place to start maybe for both of you. Maybe we could start with Leon in just terms of your, your background, particularly in real estate and then how you sort of came to Bitcoin and saw the convergence between these two fields? Yes, first of all, thank you for having me guys. And I'll make it short. My background in real estate sort of that's the family business. So to say something, I grew up upon construction sites, real estate developments where places I've I've been around in my youth and then while studying financial economics and prior to that I studied philosophy. I kind of fell down a Bitcoin rabbit hole, eventually writing my master's thesis about Bitcoin and then joining the real estate construction business in 2016. And for a couple of years, I didn't put much thought into both asset classes in terms of combining the two. I thought about real estate as one business and Bitcoin as a savings technology. But over time, I realized basically what you just laid out, that real estate, in fact, it's not just a business, it's actually a savings technology. And then I came to the conclusion that Bitcoin is a better savings technology. And that led me down the path of thinking about how to combine the two to strengthen real estate and make use of Bitcoin as a superior store value. Awesome. So I, I came to it from a similar perspective. I grew up here in Phoenix, AZ. My dad's been a home builder since the late 80s. And I always tell people that I never got grounded. I just got sent to the job site. So I've been around real estate development and construction in the single family space in in the multifamily, small multifamily space for pretty much my whole life. It didn't really occur to me what was going on until probably 20/16/2017. I joined a organization called the International Blockchain Real Estate Association, which was a real estate focused blockchain effort that focused on public blockchains, which at the time was basically Bitcoin. And I did a trip to New York City and I stayed there for about a week in advance of the conference. And I kind of came to the conclusion that, you know, this this method of development that they do in Manhattan is obviously much different than Phoenix. But I went down the rabbit hole of like, why is that? So after I got back, I started reading all sorts of things. A familiar thing for a lot of Bitcoiners is Strong Towns by Chuck Marrone. That's a good book. There's also a website. So I've been following his work since, yeah, since about then. So almost 10 years and that kind of lead from the association that I had joined kind of falling apart to jumping into Bitcoin full time. And that was about the same time that Bitcoin standard got published. So from there I kind of just married my experience the the principles that I had learned from strong towns and then the principles of sound money and trying to figure out how exactly, you know, this should work. How I grew up in the in, you know, Phoenix with suburbia as a, it was a way different development model compared to, you know, most of the major cities of the world that are at least, you know, a couple 100 years old. So that's kind of how I, I got into it. I started Bitcoin urbanism at the same conference that Michael and I met one of the other guys in Bitcoin gave me a good ration of grief at the bar for not just starting to write. So I kind of just did that and you know, more or less here, here we are. So I'm, I'm excited to have this conversation. I know that there's a lot of drive by comments on Twitter or other things where people are talking about it. And Leon's done a wonderful job on various podcasts discussing the various routes to kind of siphon away the store value premium from real estate, which is kind of an artificial store of value and has been for, you know, at least the majority since the 70s. And then back into a hard asset Bitcoin, where we can hopefully get some, at least from my perspective, some holistic changes to a Bitcoin urbanism environment. So. Wonderful. Yeah. And so just to, to pull on that thread of, of the monetary premium a little bit more in terms of, you know, why and how real estate has become a predominant store of value over the past several decades. It really speaks to, you know, broken money and the idea that, that you can't save in Fiat, you can't save in Fiat currency. So you need these other alternatives, whether it's real estate, equity markets, etcetera. So maybe we can, we can start there in the sense of, you know, the problem and, and really the Fiat problem and how sort of unsound money has led to some perverse incentives in, you know, the real estate market and real estate development in particular. And so maybe maybe that's a good place to start for for both of you is, you know, really what is the problem at hand in terms of, you know, why, you know, Fiat and unsound money has led to all these various issues within the real estate market and real estate development in general do. You want to go? You want? Yeah, No. Leo, you, you go first. I'll follow up after you. OK, sure. I think if somebody is listening right now that isn't real estate development. What I'll now portray as a problem, I think for most of us is actually not a problem. It's actually the reason why real estate has been doing so well. But what I'm describing now is the negative effects of monetary inflation. So as new currency units enter the market, existing currency units lose purchasing power and people are forced to invest, and they invest in scarce assets. And one of the assets that people chose is real estate. That is due to the scarcity of land. So real estate has been tied to wealth for thousands of years. But if you think about it, it was the agricultural capacity of land that made it valuable, not the scarcity. Because on a gold standard, gold was scarcer than land. So people used gold to store value, and then they used land, for example, to run a business or to make money. And land was also tied to political power. So in ancient Greece and Japan and India and Rome, all these different cultures, if you owned land, you were considered somebody eligible to vote or eligible to carry certain political power, right? But what happened in 1971 is as the money started to expand, as the monetary supply started to expand, you can actually see that the price of real estate closely follows the supply of of money. So if you look at M2, the rate of monetary expansion since 1971 was between 7 and 8%, depending on what statistic you're paying attention to. And residential real estate, for example, grew by around 6.7% at the same time. So it very closely follows the expansion of the monetary supply. And this is also because people get loans for buying real estate. So it's not just the scarcity in real estate that favors its use as a store value. It's also the ability to get loans to purchase the real estate because that has an interesting effect. If we say the expansion of the monetary supply is 8% and real estate grows in market price by 7%, if I take on a loan and I have a leverage of let's say 5, it doesn't grow by a factor of 7, it grows by a factor of 7 * 5. That's why buying real estate and investing in real estate on leverage with borrowed money allows you to actually outperform the rate of monetary expansion, right? And that is why people chose real estate as their preferred store value. And today, we can safely say that real estate is the most used store value in the world. But that dynamic changes with Bitcoin because Bitcoin without leverage over the past 10 years had a compound annual growth rate of over 50%. And since 2010, when it had its first market price, Bitcoin had a CAGR, so a compound annual growth rate of over 140%. So it becomes very obvious that since Bitcoin emerged, there's no need to invest into real estate. People can just save in Bitcoin by default. And that creates a problem because it creates competition for real estate, meaning people now have a different store value that they might prefer. You asked me what the problem is. The problem of the past 30 years, in my opinion, if we talk about architecture and also what Kelly alludes to, urbanism or urban design, there was no need to provide housing of quality because people bought it anyway because they needed to place their money somewhere. And that's something that can safely save from experience over the past 10 years, especially since 2009 when interest rates were below a percent in Europe. Also in the in North America, people had such high demand for real estate than in deals. Some of the people that bought real estate from us, they didn't even see the real estate. We just sent them the numbers and they sent somebody to look at it just to check that we didn't lie to see that it's fully vacant, it's fully rented out. But sometimes the buyer didn't even look at the asset. And I think that is actually crazy. And that is a prime example of how broke money can also break incentives in the investment world, because you should not invest in something that you don't understand. Very well said. So I'll. Try not to echo a lot of the things that Leon has said, which he's very much exactly correct that real estate in general is a game of leverage. And it's managing leverage so that internally your your Irrs are better than they normally would be if you would just bought the asset, you know, fully with equity. But Leon is generally correct in that the amount of credit that has become available specifically for real estate becomes a a feedback loop. In addition that the the inflation that occurs allows you to theoretically, you know, increase rents at the same rates and keep your asset value the same. So the the other flip side of that is that with all of the credit printing that happens, governments are able to regulate things to a greater degree. So a good example of that is the the US home mortgage market which is a highly regulated basically commoditized investment, whereas around the world most mortgages for homes are floating rate mortgages. So the US is a very special case where the investments or excuse me, the the mortgages that are made are fixed for a very long period of time up to 30 years. Some commercial mortgages may even go to 35 or 40 years depending on the circumstance. But it's important to realize that it's a very captured market as far as regulation goes and that they're able to do that because they can print money essentially to afford the regulations. And that's from a high level perspective, from the, from the lower local jurisdiction perspective, they're able to control what gets built and how. So for real estate developers, it's looking at a, a formula essentially of if I have a piece of property here and I know that I can get a specific zoning which allows me to increase either the density of residential units or a different more intense use type, whether that's commercial office building or tower or whatever it is. Think about the value of the land being held under by a pressure cooker. And that pressure cooker is zoning. So if you're able to change the zoning and raise your limits, then you've created a substantial amount of value that otherwise wouldn't have existed. So for real estate developers, at least particularly in the US, being able to change where your limit is, is where a lot of the value is and why why it becomes such a lucrative business in that regard. So when you have a combination of the leverage that's available for real estate owners, the leverage that's available for developers, and then being able to navigate the the the processes effectively and successfully, then you're able to create a substantial amount of wealth using the tools and systems that exist as a result of Fiat money, in my opinion. So yeah, that's that. That's really, in my opinion, kind of what drives a lot of the value that people use and they're able to pull it out with with creative money. Yeah, I think one thing in our mental model from a high level perspective and we all experience this with our friends and family that maybe made some capital in real estate. They think like they're geniuses and they think that at no point can you invest in real estate and it goes down. I experienced this personally with family in 21 when they all wanted somebody to buy a house and and that's the first time I think for a from a while that people are actually underwater right now is the lower interest rate and in 21. But I think what Leon said, it's really the model around expansion of the monetary units and ultimately the distortion of not only capital allocation, but the second and 3rd order effects. So like equities, bonds and the real estate or the largest, right, roughly 121, thirty trillion for equities and bonds and then roughly 40 trillion in real estate. As you start going further and further from the value of the underlying asset or commodity, you start, right, because equities have value based on cash flows and other parameters. And then bonds also have value in real estate dependent on location or other productive underlying fundamentals. But as you just start to increase more units and look for something that Leon says really well is its relative scarcity versus absolute scarcity. And so people are pricing that all day long. And as more units come into the system, it just gets further and further distorted. I would make the case and you guys are closest to this today at this exact moment, it's the most distorted it's ever been just simply because they're more, there's more monetary units in the system. And Mike, just commenting on what you said, I can also feel that since 2021 when interest rates started to go up, you basically see that the demand and the liquidity available for real estate went down. And from 2009 or the end of 2008 until 2021, interest rates were so low. There was so much liquidity available to flow into real estate that was easy to make a quick buck, so to say. But due to the structural problems that the expansion of the monetary supply has created at this point, inflation that actually helps real estate development because inflation also means the debt that you take on today will be worth less in the future. But the problem is, as we are hitting the end of a long term debt cycle, inflation is so strong that it increases maintenance and construction cost to a level where the incoming liquidity cannot make up for anymore. So I think so right now we're sitting at sort of like a scenario, I call it the crossroads or paradigm shift. But if you're working in real estate development and you're aware of the fact that inflation has been rampant over the past five years and nation states need to be able to to dampen it a bit, you need to find other ways to juice up your returns. And Bitcoin, of course, comes in handy here. Yeah, absolutely. And maybe maybe we can dive in there now you know how, how does Bitcoin influence this equation and how can you know, a sound of a form of sound money actually improve all these incentives that we're talking about? I think one of the things that you both alluded to and even just anecdotally, I think we see it is the the degradation of quality of building infrastructure, new home constructions. I see this everyday. It's like it's just we're, we're so far from what you know, it used to be 50 years ago or even, you know, 20 years ago in terms of the actual quality being put forth by new builds. And I think part of that is, is exactly what you're describing. It's the, it's the misaligned incentives and then ultimately the misallocation of capital where no one really care, you know, the, the person building the home doesn't necessarily care how high quality is it is if they know they're going to be able to sell it because it demands there basically. So maybe now we can sort of transition to, you know, how Bitcoin fits into this equation in in both of your minds. And maybe just before that, just adding the layer into inflation affecting CapEx and OpEx, because again, well, this is a specific to real estate, that degradation we feel from the quality of service when we buy food all the way to the infrastructure we live in and operate. And so I think it's important we're like that's breaking down and then Bitcoin as a natural solution, if you guys can touch on that. Go ahead, Leon. You're first. Kelly, don't be shy, you know he likes piggybacking on Leons. Alright answers. Right, here we go. So from my perspective, the, the, the, the CapEx and Optex situation is, is difficult to manage because your, if your costs arise, you, if your costs rise because of basically printing more money and adding more currency to the pool, then it's more likely, at least in my experience the last couple years is that those costs are very sticky when not coming down. So if you're in a, in a, in a situation where theoretically your rents would rise because they added more money, it goes to what Leon is saying is that real estate is not scarce. So they build more unfortunately, if your costs aren't coming down because they've inflated the currency to a degree and then they're also building more units or that, you know, real estate is a process. So if they started building stuff in 2019 that's now just coming online, then all of your costs are elevated, but the rents have come back down from where they were. So now you're in a position where your CapEx is, you know, maybe 510% higher than you had originally anticipated it being, but your rents are down 5%. So now you've got a 15 point swing in your margins because you were trying to basically game what was going on at the time with what is the reality now. So that's where you start to feel it in like the quality of the construction. Because if you're going through the process and, and costs are going up 510% and you're signing, you know, change orders once a week because lumber has gone up or drywall is not available or whatever it is, you have to start cutting costs somewhere, right? You have a set amount of money you have, well, you have, you more or less have a set amount of money. You're either using your bank capital to build it and then you have some equity or you're having to get more equity from your partners in order to finish the job. And that's one thing that they, that they don't like doing is giving you extra money to finish the job. So at that point you have to become creative and say, OK, what kind of product can I deliver by removing certain things that are, you know, considered like quality of life enhancements, right? If that's in a, a community area, how can I get away with not putting in a BBQ, right? So that may save me on my change order for drywall or lumber or something like that. So you get to a point where I say, OK, well, in the design as well, how many corners can I remove from a unit? And that's it. That's an actual consideration, right? So if you have an elevation of a home that has various depths and all of these things, every corner that that elevation has with the change is more expensive to do. So that's, you know, one thing you see when you see new homes is that they basically just look like a four sided box, right? And that's the most cost effective way to do it. So in the, in the business is called value engineering. So you value engineer, you know absolutely everything that you possibly can to reduce your costs in advance of knowing that you know, something's going to happen and my costs are going to go up. Or if you're in the middle of it, you're, you're trying to figure out how do I remove certain elements that I haven't yet built in order to offset some of the costs that I'm facing now. So if you do that over a long enough period of time, let's say 50 years since since the Nixon shock, then what you're left with is basically what we have today. There's a very famous inspect home inspector who's actually based out of Phoenix, who has a very big following on TikTok and Instagram where he goes and shows people videos inside behind the walls of how the construction is done right. So there's, there's all sorts of videos where, you know, the the wall in your bedroom isn't even connected to the trust in the house. It's literally just a floating hall with drywall attached to it. Or the fact that there's holes around, you know, an electrical panel where water could get in behind. You know, that stuff is all supposed to be insulated and not, you know, subject to to shorting out terrain, but still the quality of the stuff that's going on is just, you know, bad. In addition, think about it this way. If you have specific labor costs that you know will go up with time because of inflation and you have piece meal crews or whatever it is who work on a per job basis, they'll they'll walk off your job for a dollar, you know, a dollar an hour extra or whatever it is. So that's something that you're always constantly facing literally with every crew that shows up to your job, there's guys that drive around and that are willing to to snag them if they need something. You know, if that happens to them or if they need something done and somebody folded shop happens all the time. Is that I can't tell you how many times it's happened to us in the last five years. Probably happened once every two or three months, depending on depending on the crew. So you in addition to that, if they're working on a piece meal job, right, they're only getting paid to set amount to frame your house. They are less likely to spend 100% of the time getting 100% of the details than they are to just get 80 to 90% and hope that, you know, maybe you won't notice or that the inspector won't notice or that it's really not that important that they can kind of get a work around around it. So after a long time of that, you end up in the situation where we're in now where you go into a house and you're like, wow, is this really, is this really what I paid for? And in, in Leon's comment, it's like, yeah, this is what you have to accept because A, there's not much on the market, B, there's lots of competition. There's ten other people behind you that are willing to buy this and you're more or less stuck with the product that's available. So you know, when we think about Bitcoin in this regard, we think about a hard money that can inflate that if it is going up in value compared to something like the US dollar which inflates at 7 to 8% a year, you know you're losing essentially 7 to 8% of the quality of construction you get on an annual basis. So if you want to use something like Bitcoin and reverse the trend, then you get what we had 100 plus years ago where not only were the homes for the average person great, they're getting better all the time. And that's kind of what we're hoping to get back to, at least on a Bitcoin standard with real estate or incorporating Bitcoin into real estate, which allows you to reverse that trend on your own using the hardest currency, non demand. Yeah, make sure that maybe jumping onto that or into that, I want to talk about the solution that Bitcoin offers for the problem that Kelly just explained. And I just want to make people aware of the financialization of the asset class of real estate. Jeff Booth recently posted a picture and he showed the average price for home in the US in 1944 was $4000, and today it's over $400,000. So that's a 100X increase. And I looked into some more historical numbers and I looked into the Middle Ages in Europe. So in the 15th century in the Rhine area, which is now West Germany. Back then it was the empire founded by Carl the Great and then passed on to his sons. They used the gold based currency called the Rhine Golden, and it was basically a gold currency. And a Carpenter owned around 150 goldens a year, which is equivalent to around $50,000 today. And one year's wage allowed the Carpenter to buy a house, Not a home, a house. So 500 years ago, a Carpenter in the Middle Ages was able to acquire a house, a home with one year's salary. Today, the average income in the US for two people for the two person household is 80,000. Meaning for one person it's 40,000. And since the cost, the average cost for a home in the US is 400,000, it would take the average person 10 years to be able to acquire a home. And I think that shows that the living standards today are not better than the Ware 500 years ago. And the reason for that is because of Fiat money. Monetary expansion makes everything more expensive. From the perspective of a real estate developer, from the perspective of a landlord, I could say that's perfect for me because my product is getting more and more expensive. But as you, Kelly, explained very well, at the end of the debt cycle, the inflation also hits US. So right now we are very concerned about the rising CapEx, maintenance cost, construction cost and also regulation that forces us to provide solar on the roof, sometimes have flowers on the wall, things that don't really make sense and they're not economically viable, but bureaucrats want us to do that. So usually what we do or what we consider is can we raise rents because that's the profit margin. That also creates another problem because it causes living conditions to deteriorate because the price for housing goes up as landlords continuously raise rents with inflation. So I want to provide the solution now because what I personally really like about Bitcoin, both the network and also the money or the currency, however you want to define it, is that it does provide a practical solution to this problem. And I want to give you an example of what we did. So this is a real life example. One of the properties that we run, it's a 70 apartment residential property and has around €750,000 rental income per year. In February or March of 2024, we took 80,000, which is a bit more than 10% of the rental income. We bought 1.7 Bitcoin with it and these 1.7 Bitcoin are worth now more than like I looked last week they were worth about 160,000. Price went up a little bit. So I think that now they should be worth one 180,000 while the rest of the rental income that we saved lost 2% purchasing power due to inflation. So you can clearly see that by using Bitcoin and to create maintenance reserves, we were able to outperform the rate of monetary inflation by a factor of 50. And we all right, so because Bitcoin, we also have now a very good timing, of course, because we went into Bitcoin into the bear market, now we're in the midst of a bull market. Bitcoin is very volatile. So if we talk in three years, maybe the performance will be worse, maybe it will be better. But if we talk in 10 years or 20 years, I can guarantee you the performance will be much better. So you need to have a long time horizon and using Bitcoin, but I think you also need to have a long time horizon with real estate and developing a project. Usually, I would consider the time horizon that I invest in that project to be 30 years. Like that would be the average time horizon I would consider in constructing and managing an asset. Of course, some assets have to be sold in order to have money for the ongoing operations. But because we are a real estate developer and we also manage the assets that we build, we have a long time horizon anyway and Bitcoin fits into that perfectly. And I think maintenance reserves are stage 1 of using Bitcoin in real estate management. Gotcha. Yeah, no, that's, that's a fascinating example or or case study to walk through. I'm curious, like you, you sort of mentioned this, but like the the time horizon or the duration is very important here, right? Because if someone you know, who's a, a real estate guy is listening to this and they know, you know very little about Bitcoin, but they hear it's very volatile, they could say, well, you're just cherry pick picking this, this time frame to and, and it worked out for you. But you know, what if Bitcoin had dropped 50% in that time frame? So maybe if you could put a finer point on the actual sort of synergies in terms of duration of these assets. And and you know how you think about the time horizon of something like this, at least in this first example for maintenance reserves and then we can go into some of the other sort of applications or examples. Sure, make it quick. I said 30 years because that's my personal time horizon. That's quite long, of course. And if you want to flip a property, I'd say construction takes five years at least. It can work out faster. Some people can construct in three years. But on average, if it's a property with let's say maybe 20304050 units upwards, it will take four to five years. And that's the same time period that Bitcoin takes to go through a halving cycle. So Bitcoin goes through halving cycles every four years. The amount of Bitcoin that's being issued every 10 minutes. So that's being released halves. And that usually leads to price increases due to decaying supply in an increase in demand due to a higher price, which usually leads to more press and more demand for Bitcoin. So to shorten the investment cycle, I'd say a four year to five year period is the minimum of holding Bitcoin as a reserve asset. Yeah, absolutely that that's helpful context because and and another way of looking at this or or saying this is, you know, if you look at bitcoins 200 a week moving average, it's pretty much a you know, it's a little bit of WAVY line, but it's up and to the right it it's sort of never goes down. So if you, if you have that at least four year term, 4 year horizon on, on Bitcoin, no one's ever lost money in Bitcoin. And in fact, you know, you've definitively definitely lost money if you're holding dollars over the past four years. So that is also the, there's a delta there. It's not just the Bitcoin outperformance, it's it's also the, the loss of purchasing power in terms of the alternative if you were just holding dollars. Liam, do you have something? OR. I also just. Wanted to kind of shift gears a little bit just to touch on the distortion of the credit markets in real estate as well as not just the money supply. Obviously here in the US we have the 30 year fixed mortgage at extremely low rates either because of the amount of mortgages that are bought up by the Fed, Fannie Mae, Freddie Mac and. Fixed rates extremely low. And just the fact that you can get. Real estate at a fairly low level or leverage on your real estate at a fairly low level maybe one of the reasons that real estate is the largest asset in the world. It's easier to get a low interest rate on, you know, your home here in the US than it is to get large leverage on things like equity and bonds. Was. Was curious kind of how you see Bitcoin leverage and real estate kind of all converging together as kind of Bitcoin especially. Over a long time horizon and and how you see those products working out together. Well, see, I'll take a stab at that. I think that as time goes on and we'll use the example of the US, as their debt gets larger and larger, it becomes more important for them at least to stay afloat to issue more currency, right? So we're kind of at an inflection point where more inflation has to occur in order to keep the status quo, which actually reduces the quality of life for everybody involved. But it's basically just trying to keep the ship afloat. So if you're using real estate is your store value and you're hoping that any gains you can get in rent or reductions in the cost of your leverage is what's going to basically, excuse me, protect your store value in the real estate, your equity in the real estate, Then you kind of have a problem because now you're facing an uphill battle where eventually the, the connection between rising rents and rising property values will break. So there's only so much that people can handle to pay for rents. And then if that's the case and they can't afford your rent increases in order to keep up with your costs, now you have a problem. And I think that there's historical precedent, especially with what's the, the, the, the favorite Bitcoin book when money dies, where they talked about especially how real estate during the, the Weimar hyperinflation did well up to a point. And that point basically breaks when people are unable to coordinate their purchases or their income and these other things in order to pay rent. And if money starts inflating faster on a monthly basis, then you're able to control your rents, then you have a problem. So when you throw in Bitcoin with your leverage or if you're acquiring Bitcoin with your cash flows, then you are able to hedge against this kind of inflation that's occurring, right? Even if your costs are going up and you're you're allocating a portion of your income to Bitcoin, your Bitcoin should at least you know, we're using it the past as as, as, as a guide to the future, that your Bitcoin will outpace the increase in your costs and that you can still stay afloat and a minimum survive, right? A lot of times when these kind of situations happens, it's about surviving, who can survive. So you're able to protect yourself from the OpEx side with Bitcoin by allocating the cash flows and then you're able to protect your equity side with Bitcoin by allocating a portion of your debt to Bitcoin. So Leon has famously written about this. He has a nice website, I'm sure we'll cover that later. That kind of discusses like how do you, how do you allocate to Bitcoin? How much do you allocate to Bitcoin to be safe? Because a lot of times people don't realize that like, you know, even though it's coming from debt, it's actually coming from the equity. So if you are, you know, buying a $10 million property and you want to get, you know, $1,000,000 in Bitcoin, you've got to have that $1,000,000 in equity to put in because that's essentially what's what it's being used for. Now you can explain the benefits and all that which is you know part of what your job is as a as a developer or a long term owner or even as like a A10 year kind of investor, which is a lot of the standard pool of investment for multifamily in the US or even commercial. So I think personally that we are at a perfect time to be discussing this because we are at a point where inflation is probably higher than we think it is. It's definitely been higher than we thought it was in the past five years and. Specifically, operators and developers have to look for a method to essentially protect their wealth over a long period of time. So I'm in the same position with Leon, where our average bill takes from four to six years and that's getting all the plans, all the approvals and all that and then hopefully trying to sell it. Now we're, we're looking at changing our horizon to up to 15 years, which is buying and holding it for a period of time and trying to convince our partners to allocate a portion of that to Bitcoin as a hedge. Now it's not like a, a hedge is like, I'm, I'm more pro Bitcoin and against real estate. It's like, listen, this is a deal. We know that this has happened in the last five years and we want to allocate a portion to Bitcoin to protect our downside, not necessarily our upside, but it's our downside. If we're worried about, you know, 50,000 apartment units coming online in the next 18 months, how do we how do we compete with that, you know, owning 20 to 50 units, right? So it's an important analysis now going forward in my opinion that we are actively at least I'm actively pushing for consideration in our deals. Yeah, this is a a super exciting theme that I think we're all going to have to cumulatively crowd source as a as a like not opportunity, but how it's executed on. And what I mean by that is I've talked to very large venture capital investors that have gone down the rabbit hole and they can't get their LP's and their their general partners to fully embrace Bitcoin. But they're trying to wrap around how do they allocate 10% of the fund for their next fund just to downside protect that. I know Leon and as well as Kelly, you just spoke about it of this notion of protecting against default is a natural like mechanism for Bitcoin to be infused and almost any credit instrument. And so like that's one example, but another one is like the I'm curious your guys's feedback on this. So I had random like experience in real estate. I was with Google Fiber helping get that across the like SE and so would go and pitch NDU owners and commercial real estate. Unlike the the quote we use, for better or worse is like it's like you built a Ferrari and then you have hubcaps on it. If you had like dial up or if you didn't have fiber, it's like you want to increase the the the the value, the equity value of it. And in similar I was that we work randomly and like saw a bunch of capital destruction. But point being is instead of it being Bitcoin, imagine there's like some other notion of you're just adding something to creative. It's like this amazing pool on the roof with a like helicopter pad, like that's effectively what you're putting into the the real estate. And so it's like less about this like notion of it's Bitcoin, it's native Internet beans. You know, it's like there's something there that you can just explain that it's bolted on and it's part of the package that I think that like once we can explain and it gets into the zeitgeist, it'll just be understood. I'm sure you guys have thought a lot about it as well. Well, certainly, certainly trying to figure out how. And then I'm sure Leon can attest to this a little bit better. It's certainly trying to figure out how to properly explain that it's not, you know, we're not adding Internet money to our building. You know, we, we are trying to hedge against what we think is a, an inflation risk in cost and in income that allows us to at least navigate the, the, the period of time it takes to do what you know, we do as a business. Yeah, for sure. I, I agree. And I also say that let's assume we just assume that we understood that Bitcoin is a a better store of value than real estate and we assume that this mindset over time is a mindset that's generally accepted and over time and maybe a majority of the population will have that mindset. And the speculation that is currently happening in real estate is going to move over into Bitcoin. Real estate development as a business will still be interested, right? And there will still be leverage involved, though differently under Bitcoin standard. That's a topic for its own. But what's important to understand is under a Bitcoin standard, if you take our debt, that debt will increase overtime because generally we'll witness deflation. Money will be scarce. Bitcoin is disinflationary. There's less supply over time, meaning it's purchasing power grows over time. So if you take debt that's denominated in Bitcoin, your debt denominated in Bitcoin grows over time. So there will be different risk allocations and risk factors on a Bitcoin standard. But nonetheless, providing housing is a service that will stay interesting. So the real estate business will not go away. That's that's certain. So now the question is how do you manoeuvre this paradigm shift that's happening? And I think that I would await it. I see Bitcoin also. If you add it to the credit structure, it's almost like you're running a successful retail store on a High Street and you open up a website, right? You'll just open up a new possibility, providing the information that you have, which is what products you have at what price to a broader customer base. So it doesn't mean that you stop operating a shop. It just means that you open up a portal into the Internet and you can grow your business much larger. And it's the same with real estate. Assuming the example of having a property or a development worth 10 million, you take on an additional million and and debt on provided as equity to buy Bitcoin. You can actually sleep better at night and focus on developing real estate. You're not so worried about the problems of the political system, geopolitics or other issues because you benefit from the increase in bitcoins value over time and it makes your job easier. And I think any industry over time, I mean, the mining industry is an obvious choice. The oil and gas industry is an obvious choice, but every industry, industry that's debt intense is doing the right move when adding Bitcoin into a credit structure. And this is beneficial for the lender because you hatch against multiple problems, but it's also beneficial for the bank, for the creditor. Because think about it, if you lend somebody money in a debt intensive business, that business becomes increasingly, increasingly risky with more inflation and with the Fiat system in the debt cycle reaching new peaks, new highs, there's a possibility of whoever took out a loan going bankrupt. But if the Bitcoin are then held in a multi custody solution, even if the real estate developer goes bankrupt, you hold custody on the Bitcoin. So also from that perspective, you hatch yourself against against default. So I think it's not just from the perspective of the real estate investor in this particular case, it's also the bank or whoever provides the loan who would benefit greatly from providing additional capital for the purchase of Bitcoin. Yeah, this is the beauty of Bitcoin is the incentive model across from every participant. It makes sense to adopt it. The the sad and, and great part is it's truly asymmetric in the sense that if you adopt it, you will win in the future. If you do not, you will lose. And so it's in that way Darwinistic, which is bad but also or sad, but it's also great for opportunity. It just a contextualize a lot of this. My wife worked for a pretty large tech company and these people make significant amounts of capital. It's kind of Fiat tech company. They take off and you know, bank holidays and work couple hours a day and all that. She doesn't listen to this. So I could say that, but point me is she told me, she told me the other day that so she's on this call with 20 people and they asked a note about, I don't know how it came up, but it's like what would happen if you won the lottery and 18 out of the 20, her and one other person were the only person that didn't answer this this way would say, buy a house. These people cannot afford a home. And she was just shocked because she just doesn't, you know, a lot of people just don't recognize how perverse this problem is because as we all know, you know, feeling secure is a big is a core part of like humanity. And if you can't have your own home, a lot of people don't feel like they can raise a family, they can have kids. And there's just a lot of deep underlying tones that why this is so important from the individual all the way to the, you know, producer of the properties. Yeah, it's a, it's a reasonable point. And you know, a quip that I've heard many times before is like, you can't live in your Bitcoin, right? So like there's, there's obvious utility value associated with real estate. And so to Leon's point, like real estate development's not going away overnight, but there is going to be this, this transitionary period where people start to realize that there's just a sort of more pure form of savings technology that exists. And so they don't need to necessarily, you know, buy the second, third home to store value. They can just buy Bitcoin. You know, I'm curious, you know, we before we, we hit record, you had mentioned that you were at a conference that wasn't a Bitcoin conference, it was a real estate conference. And you were, you were sort of talking about these ideas and these themes and concepts to folks. I'm curious how that was received. And sort of like, you know, I think we've sort of outlined the clear problem here in terms of Fiat inflation, the degradation of quality in real estate over time and this potential solution. So like what is in your mind sort of the, the disconnect that still remains in terms of people in the real estate business who are listening to this conversation or were at the conference where you spoke? What is what are the sort of the few things that they need to understand to realize that this is something they they need to think critically about or they're just going to get left behind basically? I think I'll ask answer your question shortly about how my presentation was perceived by the real estate crowd. But I think Kelly, I'd be interested to hear also how you see it. But talking about myself, real estate development and construction is very stressful. So days can go from 6-7 in the morning until 11:12 at night and you have very little time. So you have very little time to dedicate yourself to studying other technologies or other fields. And especially when interest rates are low, things are going so well that you quickly dismiss other opportunities or other technologies because you think I'm doing so well, I don't need that. I think the reason for myself, I why I became so interested in Bitcoin was because I also learnt about Bitcoin before getting into actual construction and I was sort of addicted to falling to learning about Austrian economics. So that's how Bitcoin really connected with me because throughout school I always knew something is wrong about the inflationary Keynesian monetary system, that we live in it. But I could never really, I didn't really understand why I couldn't point my finger onto the exact issue. And then Austrian economics and learning about the different School of Economics that really helped me to understand the superiority of Bitcoin as a store value. Because we also have to say, especially in the US, there are tax advantages that exist around real estate investing that make it very interesting. And these tax advantages do not yet exist for Bitcoin, even though I believe over time, game theory will cause any jurisdiction that understands the properties of Bitcoin as a scarce form of money to classify Bitcoin as money as what it is, or as legal tender. And don't tax transactions because as long as you tax transactions on Bitcoin, it cannot be used as money. And that is a problem today. But once the tax incentives that exist around real estate will also exist in Bitcoin, I think it'd become more obvious why Bitcoin is such a good store value and not talking about the real estate crowd. So I went to Toronto, some friends of mine there that became friends over time now because we've chatted a lot, They run a real estate brokerage firm called Brockstar Real Estate and they also provide additional info and insights for their clients through a podcast and a newsletter. And I talked in front of I think it was like 1000 plus real estate investors. And I'll be very honest to you, I was shocked by how positive they received whatever I presented to them because when I talk with friends and family still until this day, they don't really understand what I'm doing. Some of my very close associates that I work with and my partners, they do by now because I spent a lot of time writing on this and sharing my articles with them. But business partners that we work with on the construction side especially, they think I'm just a nice guy. That's like a little bit crazy and they hope that I'm not going to go bust. And then within the next decade, that's really their mindset. So then travelling to North America, I think you guys are also a bit ahead of the curve. I have to say that you people in Europe, they tend to adopt technology a little bit later because they are very much intertwined into traditional family structures and communities. And it's similar in Japan. You don't want to make a mistake. If you make a mistake once, people will tell you your whole life you make a mistake. If you make a mistake, It's my perception from North American culture, both Canada and the US, if you make a mistake, people say that he took a risk, he'd do better in the future. So that's why I think that whatever I had to say was perceived well. And, you know, I had interesting conversations afterwards, and I think it's kind of exciting. I feel very, very energized and motivated when I think about the possibilities that Bitcoin brings to the real estate sector. Yeah. What were, what were some of the follow-ups? I'm, I'm sure people came up to you after your presentation and and were curious to learn more. What was what were some of the sort of highlights or excerpts from from some of those conversations? Some people outright said why should I even own a property? I'm just going to sell it and put all my money into Bitcoin. And I said, you know, that's generally speaking not probably not a bad deal. But for example, if you are a real estate developer, you can actually bring your knowledge into a deal, put in zero equity and get 50% of a property. Meaning, let's assume that I have knowledge about real estate development and I have good contacts to a bank and somebody else brings the equity. I can secure financing from the bank and then construct the building. And I brought in 0% equity, no dollar, and I get 50% of the property. That's a good deal. But if you have money that you want to save, just put it into Bitcoin. There's no need to invest it into real estate. That's actually true. Yeah, Yeah, it makes sense. Also where the energy comes from in the sense of we've talked a lot about why this is an opportune time, but to give it some backing in 21, when the price of Bitcoin was rising, we had a lot of conversations with real estate developers and individuals, and it was still very hard. You know, real estate's flying, everyone's happy. The people that we got a lot of traction with and experience specifically in Texas was like with YPO groups, individuals that are running businesses feeling inflation post 2020. But now you have this flipping where interest rates rose faster than they could have ever expected. You have the you know the Bitcoin price going over six figures, which is a is a big moment I think from a psychological perspective. And then this new administration that has become friendly all that converging with the natural increase in inflation and the the cost of goods to produce and then as well as not being able to keep up with rent that it makes sense that now people are looking for solutions. And so, yeah, I don't know Kelly, if any of that supports kind of where you're seeing the the feedback or openness that's probably changed for the past, you know, call it 6 to 12 months versus past, you know, few years. I would say that that people are kind of starting to come around and for, I would hate to use like my experience and say, unfortunately, you know, our properties aren't performing as well as they should be. But it's one of the things that we have to explain and say, hey, you know, internally we know that our costs are going up or that rules are changing and we can't collect the rubs that we used to. So it's, it's a conversation of, OK, well, we know that regulations are getting a little bit tighter than what we would like. Rents are down, you know, 5 to 8% depending on which part of town you're in. And then our expenses continue to go up like 3, you know, at 3% like clockwork. So what, what are we going to do? You know, I'm, I'm in the process of putting together a package to basically show a current pool of investors like, listen, this is something that we can consider. You know, we, we are, we're paying our loans, We have some excess cash. We should consider, you know, putting in 1015% of our cash flows into Bitcoin. And it's not so much that like this is the the Hail Mary to, to get, you know, some sort of specific return that everybody wants. It's like, listen, this is kind of the situation we're in. There's a lot of units coming online. Our expenses are still going up and we are, you know, spending a lot of time managing how to prevent this from happening. This is still where we are. It's it's probably my new hobby horse that, you know, we are at that inflection point where it's like this needs to be something standard that we present. In the past, it's been much harder. I've I'm in the same situation with Leon where, you know, if we are talking to either family and friends, where you're passing, you know, the hat around for money to raise capital for a new project, that it's like Kelly the the the Bitcoin guy is asking for money. Are you going to actually build the building? Are you going to just buy, you know, Bitcoin and send me pictures of somebody else's building? And it's, it's, it's said in jest, but from that perspective, it's like, yeah, I, I'm still kind of in that position where, you know, I wouldn't say I'm not being taken seriously. I'm definitely being taken more seriously with Bitcoin at, you know, 85,000 or up to almost 110,000. So. OK, well, you know what, what's he talking about? Why are, you know, why, why is this happening? And then we, we also have the same conversations where, you know, if we're asking for investor money, if we need 50% equity to get bank financing to construct something, it's like, well, why are we giving you 5 million? Why wouldn't I just buy Bitcoin? And I think I heard at a presentation one time, it's like, well, you, you should, you should definitely do that. But you know, at the end of the day, we all have bills to pay and there's value that needs to be created in order to keep our lives going. So, you know, real estate developments not going anywhere. Shelter is a very much needed service. There's got to be somebody that navigates all of the processes and the construction in order to do so. So we're not trying to close up shop and just sell all the assets that we have. We are just trying to maintain the ability to provide a return for a service that, you know, we've been doing for a long time. It's not, you know, people are still being born. People still need a place to live. People need to shop somewhere. They need to work somewhere like this. This stuff isn't just going away. So the the conversations are how do we protect ourselves into the future and. It's that that's kind of, you know, that's the hardest part of trying to figure it out. So yeah. Yeah, I, I think it's, it's a very important framing in terms of the, the downside protection sort of narrative. Like this isn't a high risk flyer on, on Bitcoin that we're hoping, you know, generates these fantastic returns. Like, no, this is, this is actually to protect your downside in terms of what you're already planning to do and what we can know, you know, pretty confidently in terms of the, the erosion of purchasing power and Fiat is going to be detrimental to, to whatever your long term plan is. And so this is just a way to help protect against that. I guess one, one part that I'm curious about, and we've sort of alluded to this in, in various respects, but like, you know, as this transition begins to play out over the next several years and that huge monetary premium associated with real estate starts to erode, then what does that look like from a sort of profitability standpoint for the average real estate developer? If you know that that premium is getting eroded and, and probably happens gradually. I don't think that that's something that happens overnight. People talk about a similar dynamic with gold and, and Bitcoin demonetizing gold. Like I think that's a very gradual process over probably multiple decades. But how do you guys think about sort of the prospects for a real estate developer in that world where you do start to see that erosion? Like how does that impact their unit economics? And are they really sort of shit out of luck if they're not adopting Bitcoin to some extent in into their plans if that actually starts to manifest? Yeah. And just before you do so, would love to just add the one last point that you had Kelly of the downside protection. I think that there's. A great benefit to Bitcoin in terms of looking at your investments over a long time horizon, but also ensuring that you have liquidity for an asset that otherwise is somewhat illiquid, like if you have. Stable rents and rising expenses, and you have loan obligations. You don't necessarily want to be a force seller at the an opportune price if you're 100% exposed to real estate. But if you have an asset that's liquid 24/7, 365 that is on that is not necessarily tied to the real estate. You can instead sell that if you're waiting for another time to actually sell your real estate, which which is pretty great to have kind of uncorrelated more liquid asset. But but sorry didn't, just wanted to hop in with with that. Point as well. No. And I'd say that you're, you're exactly correct. You're in a situation where you're, if you are a long time owner and manager of of real estate, you are constrained by essentially your cash flows or your your property valuations and your ability to pull out a positive amount of equity, right? So that would be essentially your liquidity in protection. Now, if you incorporate something like Bitcoin as, as a hedge for, you know, downside, then yes, do have an additional release, you know, relief valve if you had to do it. Now, one thing to consider with the, I guess the, the inflation in the money supply is that when you own real estate, right, the idea of protecting your store value is that that inflation can benefit you so long as you, you know, you're not a bad operator, so to speak, of a property. But on the flip side, if you incorporate Bitcoin into that, you are also receiving the upsides to that inflation, albeit at a greater advantage, right? The price rises faster than the inflation does, even if you're using, you know, off market statistics like the Chapman index or, or shadow inflation or what. I can't remember if that's the correct name of that website, but that's kind of like the idea. In addition, Oh man, I lost my train of thought. Leon, you can take over. OK, sure. So I think personally, if you really think about it, if you take a alien perspective, let's say you're an alien, you're looking onto this world and you can see people live very mobile, people travel constantly. We have electronic based currency systems and we are highly digitalized, but still we use tangible objects to store most of our value. So I think there's a mismatch in in the way that we operate as a human species and the way that we store value. And that mismatch occurred due to the absence of a digital store value and due to the existence of land as a scarce good. I can see why we're using it as a as a predominant store value. It's also because real estate yields cash flow, which is not used to analyze it as an investment, but it's used to pay back the bank who gives you money that didn't exist prior to that. It's also very important to understand, I think, the dynamics of the Fiat system. So for an institution that lends money, real estate development is actually great business because you can create money that didn't exist prior to that. And then that money can be paid back with the rental income, which is also rising with inflation. So the interest rates and the difference between the money that you need to pay, maybe a government bank or another commercial bank that's bigger than you that gave you the money to then lend out to. We have a constructed property that's a great business model for for the bank. And that's also why land, why real estate became this predominant store value. But now we have Bitcoin. Bitcoin is the digitalization of value. The Internet is going to move from a place where information was shared and stored to a place where value can be shared and stored. So naturally humanity will accept that and they'll understand that. And that means that if you are in real estate development at this point, I personally would only stay there if you are a real estate developer. If you're a speculative investor, I personally would just move on to Bitcoin, to be very honest with you, but because. Sorry. My nephew, yes. So if you're, if you're on real estate development because you're a speculative investor, I think you would be better off going into Bitcoin. And if you are a real estate developer that isn't real estate development because you like the business, you understand the insurance and out of it. I would suggest to look at Bitcoin to look at ways to integrate it into your business model, using it for maintenance reserves, using it to include it into new project financing. And also what we have not discussed yet, which is very obvious. The refinancing of real estate is one of the most interesting moves that you could do. As the value of your real estate goes up with inflation, you can refi the the portion that you haven't financed yet and put that. Usually you put it into new development. You can also roll it over tax free. But what I would suggest you can roll some of the equity, some of that capital over into Bitcoin. So you don't necessarily need to sell your real estate to benefit from Bitcoin if you are a real estate developer. Yeah. I mean, this is maybe a great transition to that topic, but one thing I wanted to call out as an example, Leon, is we've seen this and these are tropes. There's probably a lot more relevant ones, but I think of The Big Short and then recently in Big Short, they had the strippers that were allocators to real estate. And then right, Like it's because rising interest rate cost of capital, you know, effectively shows everyone they're handed if you're actually an expert or if you are just pretending to be 1. And it's similar with 2021 and the Airbnb crisis. I don't think it gets talked about enough. But in every market, everyone was buying these homes to Airbnb out low interest rates. People have more capital to spend. There's more people working. So there's, you know, more tech companies that have hired. So you have people traveling and have capital expenditures out there. As those interest rates rose, we've seen, you know, the the housing market kind of get hit with these houses not being filled up on vacation to be sold. And this is ties into what we do at early writers. We look at like the venture capital space in the past, call it 50 years, what was spent to be a professional industry meant by people that have built 1st and then allocate second has historically turned into this monstrosity of anybody says, hey, I'm going to go to school, then I'm going to start allocating capital. And as the asset price appreciates or Bitcoin becomes the cost of capital, you hear this theme is the hurdle rate. It becomes very hard for people to return the capital because it's very hard for people to spend their Bitcoin. You have to produce real value in that world. And so maybe some of the strategies to talk about, because we've been approached by different real estate investors that also grok Bitcoin and they're thinking about whether it's to Kelly's point, sweeping cash flow. So like one real estate strategy that they have is producing cash flow dividends back to their investors. What does that look like from some hybrid of BTC and cash or sweeping that to increasing the equity value? So another strategy that this particular investor did was taking that excess capital and then reinvesting in tenant improvements to increase the equity value ultimately to sell. But what does that look like to put that digital Cafe as you reference that as access to now the Internet or Bitcoin and increases that and then the access to equity leverage and refinancing or things that I think are just starting to be seen. Curious how you guys think about that and where you see opportunities, you know, on the horizon. Hi, everyone, appreciate you still listening to the podcast. Hope you're enjoying it. Kelly and Leon really brought a lot of information. It's an incredible and exciting time given the convergence of all things happening global macro, Bitcoin, real estate. As a reminder, we touched about it a little bit on the pod and last week we launched the Guild network for honor and private clients, as well As for early writers investors. If you want to learn more about that, reach out to me personally Michael at on rampbitcoin.com or contact at earlyriders.com. Now as a reminder on ramp offers financial services across the spectrum. So it not only you know, manages multi institution custody to help secure your asset for long term preservation, but also we offer lending, trading, inheritance, planning, Iras and much more. If you want to get in touch with us, learn more about how we can help perfect your custody solution from Single Signature Collaborative Custody or Leaving your Bitcoin on a Coinbase or Gemini, please reach out to us and we'd love to talk with you. Well, I'll jump in the, I think it is a positive effect the the real estate cash flows is a is low hanging fruit. You can explain that like, listen, even even if we're using 5% of our cash flows to hedge, you know, potential expense jumps, then this is OK. Or if it's 10 or 20, whatever it is, that's something that you can easily come to. The The the other aspect of pulling equity out with a refinance is that you know that money is generally tax free. So what do you do with it? Normally you distribute it back to your investors. But if you are in a long term hold position, you can say, listen, here's the thing, we can take this money and we can just distribute it or we can take this money, you know, hold Bitcoin for this amount. You know, we're probably only going to refinance it once, maybe twice over a 10 year old. And we're going to roll this into the returns in a way that, you know, we're not having to sell the Bitcoin at the end of it if we don't want to. We can, you know, deliver PC if that's what you want. Or, you know, you can, you can obviously take this PC and sell it and that's your your gains. On the flip side, what this does is that it, it turns the kind of like a merchant building plan or business plan, which is what kind of my family has done into a long term hold business plan where it's like, listen, we actually benefit the longer we hold this with the refinancing processes and tools that exist in the United States. So if we, if we get all this done and we create this value or you know, if we're doing like a value ideal, like what you talked about, you buy it, you put some cash into improving the, the units or the common areas or you know, repainting the building, doing updates, stuff like that. And you're able to collect rents greater than the cost that you put in on a camp rate basis. It's like, OK, well, now you've created value that you can put into Bitcoin and you can hold it over a long period of time. What that does is it changes it from a transactional nature with real estate to what you know would be considered the norm 100 years ago. It's like, OK, well, I'm a developer, much like what Leon was saying, I'm a developer. I'm going to build this for you with our partners, but I'm going to take, you know, a significant amount of equity. But we're going to hold this and manage it right, because this is essentially our baby. We want this to succeed over a long period of time. We built it. We, you know, we have specifications that we include when we build it because we're managing it in a certain way. You know, we're into ultimately familiar with the build, the building. This isn't like, you know, the fix and flips that were famous in the United States from 2006 to 2008 or even from 2019 to 2022 where it's like, you know, I'm in and out of a property in three months. It's kind of like a lipstick on a big deal where I change the carpets, maybe I change the, the countertops and threw in some new appliances and then all of a sudden the property is magically worth like $100,000 or more. So that's not, that's not what you know we're looking for, although that is a business model that you know works with a high degree of risk. I think it is a good strategy for basically extending the term of real estate ownership saying that like, listen, we can extract some value out of this using the existing credit Fiat system and refinance. We're going to put it into something that can't be debased and we are going to ride this out for as long as, you know, you want to or as long as we can or as long as we've agreed to in that in the end, you know, we're nurturing now 2 assets over a long period of time, our Bitcoin and the real estate itself. So I think it becomes a much less transactional business where it's, it's more of an ownership business and that we're we're doing this because we'd like to do it like Leon said and that we are hoping to provide the higher quality, higher quality of service and the higher quality of product. I agree with you, Kelly, and just to add, I would say approach your portfolio like without an ego and just be very realistic. So if you own assets that are non core seldom and buy Bitcoin with it because Bitcoin is the new hurdle rate, right Michael, like you said, that's that's a fact. Bitcoins increase in purchasing year on average year over year. That's the new hurdle rate. The new hurdle rate will define how people invest their money. And if you understand that, I think it's healthy to look at your portfolio if you are a landlord and if you develop properties and you manage them, sell non core assets to buy Bitcoin, recapitalize with Bitcoin as the capital base of your venture. And then secondly, if you if you own properties with partners that do not want to sell or you do not want to sell because you would have to pay taxes or for other reasons, start with the rental income. Second, secondly, refinance. And also something I just want to mention shortly is Bitcoin mining because what we are doing at the moment, we are exploring how we can incorporate Bitcoin mining into our developments to save on energy cost. So energy costs have skyrocket since the war in East Europe and we pass these costs onto tenants, but it just increases the living costs. So what we are looking to do is we want to incorporate mining. We're doing it right now with individual apartments. And as we understand it more, we want to incorporate also into new developments to basically use the heat that is being produced while mining the extra seat 2, then heat the buildings, heat the pool, have warm water or use it for other needs. So incorporating Bitcoin mining into real estate development is something that I personally find very interesting to save on energy cost. And a nice side effect is it might be centralized to network as well and then for new developments. And that's something I'm eagerly working on with some institutions right now. And I also created a website digitalrealestate.org that you can use to understand this. I want to only ideally, ideally only stunt new development projects Exactly. If we can also acquire additional capital to buy Bitcoin and that would increase the investment performance and it would also we hatch against the downside. So for all new developments, our planners to raise additional capital and buy Bitcoin, we hold the Bitcoin in the same entity that also holds the building. And then we hatch ourselves against the downside, against the possible scenario of the monetary premium that sits in real estate flowing into Bitcoin. We also create this novel capital base that we can then use to potentially also lend against, because you can do things with Bitcoin, you can sell it or you can lend against it. And I think it's an interesting asset to lend against as long as the increase in purchasing power of Bitcoin outperforms the rate of Fiat interest rates. And I think that will be the case for a long time. And what you can see here, actually in the model in the year 2025, you can see there's Bitcoin acquired, sorry, there's a real estate project worth 10 million, and you add a million in Bitcoin on top of it. And then over time, you can see how it increases the investment performance. And it's crazy. I mean, as a Bitcoiner, we understand this, but we've built this model to help real estate developers understand and visualize the paradigm shift that Bitcoin really brings us, this near perfect form of money and near perfect store value. Yeah, it's it's an excellent breakdown and truly like the basis of our full thesis at this firm is what Brian alluded to in the beginning is professional. We've historically in the 1st 15 years of Bitcoin seen the tinkerers that like to play with it, but haven't had the professional experience to understand how do you actually infuse the asset to make it make sense outside of Bitcoin. And the reality is something that we can't really fully comprehend because we're so far down the rabbit hole. But Kelly alluded to it earlier is, well, why wouldn't they just buy it? And it's like, we'll, we'll do it. And the problem is that a, they, they won't do it. And even if they did, they won't hold it through that volatility because there's a lot of work that takes for somebody to see that volatility because we're going to see volatility for a while. Maybe it'll dampen a bit. But the reality is there's a lot of value to deliver an operational excellence from the background that you guys have. And then once you layer on Bitcoin, that's how you blend that return profile to downside protect with the real estate with the upside of bitcoins appreciation. And there's just going to be a lot of money to be made because that story hasn't been told to the private markets yet on specifically private capital. And then obviously the banks are slowly warming up to this. And ideally that's going to blend together because obviously banks have the lowest cost of capital because it's inorganic. But yeah, it's it's truly an exciting time because all of this like story is starting to converge into something that can be distilled and there's a 15 year track record to support it. Yeah, the other, the other component that that just made me think of Michael as like it's similar to the dynamic that we talked about on the custody side of things where, you know, until someone really gets burned or they feel the pain of an inferior custody system, it you almost need that pain in in order to incentivize someone to see the vision of a superior form of custody. I'm saying that's similar in some respect to like what I think how this will play out over the next decade or so is like there will be early movers that that see this and, and understand Bitcoin and understand how it can basically trust that model that we just had up on the on the page. But there's going to be a whole slew of investors and real estate folks who just, you know, either haven't done the actual real work on Bitcoin to to believe that story. And so in my mind, like they're going to have to see some pain of not adopting Bitcoin basically and seeing other real estate developers flourish as they do adopt Bitcoin. And then at some point there's going to be a realization of like, OK, like that is the thing and I need to adopt it, otherwise I'm going to die. Because I mean, that's, and I'm sure Leon and and Kelly, you're seeing sort of some early movement into this space, but I would imagine it's few and far between still like relative to the broader landscape of real estate development. And so I think there there might need need to be a little bit more pain in terms of people, you know, running into these inflationary headwinds in their typical real estate practices before they actually wake up to the solution. Would you guys agree with that sort of line of thinking? Just add one thing. This is actually how Leon and I first hit it off over a dinner a few years ago was referencing. You can make the case that up until today or with multi institution, you couldn't really execute on the strategy because ultimately maybe they they got the strategy right. In the same way it's easy to buy Bitcoin, but it's hard to hold it because you left it on Celsius block by FTX mount Cox, you can go down the whole list. And so Bitcoin is insanely volatile and to insert it in traditional financial constructs or instruments and their type of custody, which is single party, you're embedding more risk on top of another risky model because this is all risk, this is investment and you have to lower that that risk. And so that redundancy and fault tolerance built in a multi institution in my mind is how you can actually start to build these contracts where you can at least downside protect that the custodial solution won't fail. And then you have to now execute as the asset manager. So that's, I think, a part of that. Totally, yeah, because we haven't even really touched on that component of it too. But it's like even if you get a real estate guy to believe all this, it's like, OK, well then what? What do I do with the Bitcoin? Do I leave it on Coinbase? Like probably not, can't really do this with the ETF. So you need you need the actual underlying collateral to do it. But then the question is how do you actually hold it for 10 plus years, right. And that's, that's something that I think we're on to and on the custody side, but still very early in sort of the market realizing that. Yeah. I. Would agree. So one of the things that I've mentioned was the you know, when or to Michelle point and to your point, Brian, is that a lot of individuals experiences individual loss or custody problems and not necessarily understanding that there are now, you know, professional solutions where, you know, multi institutional custody is like this is the the Cadillac of doing it in a professional sense, right. So if we're if myself or Leon are trying to convince people like, well, how do I how are you going to hold the Bitcoin when I put it on Celsius or block fly and it's gone. It's like, OK, well, that was years ago and now we have new services that are being provided by something, you know, company like on ramp where you have multi institutional custody, your keys aren't being held by you. It's not on a calculator looking piece of plastic in, you know, the in your junk drawer in your kitchen that you forgot about five years ago, right. So it is changing in that when I've had these conversations before, I'm like, no, listen, like we're not leaving it on Coinbase. We're going to put it in a special custody solution where it's not just going to disappear. These are people who do this professionally and this is how they hold it. But one other thing I wanted to mention is that, you know, when you said that there's got to be paying for this kind of thing to happen, I think we're going through that to a degree now at least a lot of the projects that were built or came online in the US, at least in Phoenix in you know, the 2020 to 2022 or 2023 era, if those are being sold now, they're being sold essentially at cost or slightly below cost. So there, there is no equity for either the builder or the Equity Partners to take home when it's being sold. It's just being sold because it has to go, right. If there's, if the, if the debt covenants are being forced upon them by the bank and say, you know what, it's got to go, you can't afford it. And if the Equity Partners aren't going to raise the money to pay down the loan if they don't meet like a debt service coverage ratio test, then it's like it's OK to the market we go. And I've looked at probably half a dozen deals in the last month. I would say where you're buying it for, you know, ten 2025% below the cost of like what it would take for me to build it, right? And that's not like my fees or the investors return or anything. This is just the sticks and stones cost of doing it. So it's a, it's AI think it's an opportune time to say like, Hey, listen, if we, if we protect our downside from what's going on right now, the pain that you're experiencing, this is kind of a scenario that we can look at and say, OK, well, it's not a, it's not a total loss, right? You didn't get wiped out on your equity. So and then, you know, with multi institution custody, it's like this is, you know, this isn't me holding it on your behalf. This is a third party, a professional service that's holding it. And you can read all about their qualifications. Yeah, absolutely. I know what I said we're. We're coming up on time, but I have a question for you guys in the sense of like the door into Bitcoin from real estate is only so, so big. And as the price appreciates, it gets smaller, right? Because more awareness. People all come to these, you know, conclusions on their own volition. And curious how you guys like talk about or think about it. The reason why I'm asking is I don't know if you've ever, I'm sure some people seen this margin called fantastic movie. I rewatched it this weekend and they ultimately have a fire sell on equities because they're just like the first one, you know, through the door is the one that kind of makes it in that position. And so I think about real estate in that sense. Like obviously the Fed would step in if there's a deleveraging, but it's still the same aspect. Like you can get out of the position for pennies on the dollar, but you're ultimately going to be buying much less Bitcoin once you come if you have a billion dollar portfolio. I'm just curious if you guys think about that or how you think about it or it or talk about it. You know, I, I mean, I have a profound sense of urgency, urgency when it comes to that. I feel that we have to move very quickly, very fast. Bitcoin monetizes so fast that if you don't act quickly, you will be penalized over time. But that pain is also important for you to get going. So I think that people might dismiss it now, but in five years and 10 years, the pain will be so strong that then they'll jump in. So I personally have a very, very strong sense of urgency. But I do believe even if you don't want to go full into Bitcoin, if you don't want to sell core assets, if you don't feel like refinancing property to buy Bitcoin is a good idea, or if you don't think you should include Bitcoin directly into project financing, I think at five years you would think so and 10 years you would think so. Everybody would think so at some point because Bitcoin is the new hurdle of it. It's not going to go away. It just takes time for that information for the majority to be absorbed. Yeah, that's, it's very well said. I think you're starting to see early signs of, of people recognizing that. But like I think, yeah, we're, we're still very early things like, you know, if the US government ultimate issues pit bonds like that would be a a strong signal that like, you know, this is manifesting. It's it's sort of bleeding into all other aspects of traditional finance and and structure products. Who knows if we actually see the, the United States government issue bit bonds as a topic for another day. But something like that would be a a very strong signal to the average person that like, OK, like this is a real thing. Like I need to think about it more critically. But yeah, I know we're, we're a little over time, but maybe where can, where can we point folks to to learn more? Both Kelly and Leon? I know Leon, you're also finishing up a, a book that you've been working on. So want to let you pump that as well. Yeah, I'm eagerly also waiting for Kelly's feedback because what Kelly really did he put me on to or he made me think about the effects of of Bitcoin on architecture and Bitcoin urbanism. So the designs of our cities that are also not only but there are result of of Fiat money. I think that modernism and Fiat money and modern architecture, the Bauhaus and the International Style that came from sub from from urban America in the 50s, it's all intertwined. So they all came into existence in the early 20th century. So they worked in tandem. Sometimes they benefited each other, sometimes they didn't. But there is a big effect of, of the way that we store value and the way that we organize cities because the financialization of the SA class real estate and commuting with cars and so forth has arguably destroyed communities. And that's something that I'm working on right now and eagerly awaiting Kelly's feedback on that. And the book, which has the word, the name Digital real Estate will be released in Q4 of this year. And I have 3 chapters in the book, 3 main chapters. The first one is the investment thesis about real estate and Bitcoin being very similar or the same with Bitcoin being the better store of value. The 2nd chapter really is a handbook of how to include Bitcoin into real estate development. And the 3rd and final chapters on the socio economic effects that Bitcoin as a new hurdle rate will have on real estate investments, interest rates and so forth. And the website that you guys just shared, digital realestate.org, it's for free. So you guys go ahead and use it. You can include Bitcoin into your financing models, and maybe it helps you understand why including Bitcoin into real estate financing is helpful. Awesome. Kelly, where can folks find you? Well, I, you can find me on Twitter slash X at KT Lannon LANNAN or at bitcoinurbanism.substack.com. And that's probably the the best places to go. I, I know I've told Mike about this. I've recently stepped back from the family business and I'm exploring some opportunities to do Bitcoin and real estate more, I guess concretely. So, yeah, reach out to me there if this is something that interests you guys or if you just want to chat about it. I I love getting the DMS because there's always fun conversations after these kind of podcasts and stuff go live. So yeah, reach out to me through the website thebitcoinurbanism.subsec.com or Twitter. Katie Lennon. Awesome. Well, thank you, gentlemen. This has been a fascinating discussion and I think will be very useful for folks in real estate and elsewhere to to learn about this convergence. So thank you both for joining the show. Thanks guys. Thank you guys. Take care boys. Hi everyone. Thanks for tuning in to another episode of Final Settlement. We had an awesome pod with Leon welcome and Kelly and Lannon talking about all things real estate, Bitcoin, and the future they both hold. Appreciate you listening to the podcast. If you enjoy everything that we're producing, please like and subscribe and share it with your network. As a reminder, on Ramp is your trusted partner in securing generational wealth. Whether you're an individual that's been holding Bitcoin for years or a net newcomer looking to build a material position and want to figure out a way not only to secure it against any kind of physical attacks, but also, you know, single custodial failure, but also for friends and family that are looking to get in this space. As you may know, we offer multi institution custody that perfects custody from having a single counterparty be your Bitcoin holder or potentially lose those assets, but then also helping individuals that have historically had to rely on self custody by storing hardware devices spread across their house, city or state. You can reach out to us at honor@bitcoin.com or you can shoot me a note. I'd love to hear from everyone at Michael at honor@bitcoin.com. Thanks. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Ramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. 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