Monday, December 04, 2023

Real estate provides excellent opportunities to invest Trade Dollars that will generate cash profits. Real estate isn’t a particularly liquid asset, but real estate becomes more valuable over time and provides an excellent inflation hedge and tax shelter.

Since Trade Dollars come from selling surplus or from additional new business and have a low incremental cash cost, many investors find that they can be more aggressive in pursuing investments such as real estate. Because Collective Currency exchange members can earn Trade Dollars without significantly affecting cash flow, investors can buy speculative properties and wait for values to go up. In some cases, it’s even possible to walk away with a pocket full of cash.

Even if the investor is forced to sell at a paper loss, the sale can still represent a cash profit. Here’s how it works....

Let’s say a business has an incremental cost of 35 percent in its Trade Dollars.

The business owner buys a piece of property for $100,000 trade, so the cash cost in the property is $35,000. If he sells it for $70,000 cash, he has still doubled his cash investment while reporting a $30,000 loss on his taxes. The IRS doesn’t care whether you pay for the property in cash or Trade Dollars. The reportable loss is still the same.

Investing Trade Dollars in improvements to a hard asset like real estate is another way to generate cash profits on Trade Dollars, since the investment enhances the cash value of the property. For example, a doctor has paid for re-plastering and painting of a house, had a new sidewalk put in, has renovated a garage, and made other improvements using Trade Dollars. Since the doctor’s cost of a Trade Dollar is only his unsold time, the actual cost of the improvements is negligible.

Even when a contractor isn’t a Collective Currency Exchange member, members are still able to finance improvements with trade. Vacations, vehicles and building materials can be bought with Trade Dollars, which can be traded to contractors.

Where electricians, re-modelers, plumbers or other contractors are exchange members, owners can easily upgrade the cash value of their property. If the real estate is income producing property like rentals, the improvements can generate immediate cash through rent increases.

Developers have been known to offer residential lots or condos to trade network members. Using the property as surety, they can begin spending trade credit even before the property is sold. They may offer it for 100% trade, or for a cash/trade blend. Sometimes they will accept the down payments in trade, and the buyer is responsible for a cash mortgage on the remainder. Creative financing is still financing.

Another good example is of a member acquiring a 0% interest trade mortgage as demonstrated by this true story. A man moves to a new city and opens a dry-cleaning business. A trade broker walks in, and sees what he would have to find the dry cleaner in terms of goods or services in return for the dry cleaner offering his services to the trade network. The dry cleaner is renting an apartment and would like to own his own property. The trade broker found him a new-build condo unit for $150,000. With a pledge to pay back $30,000 in dry cleaning credit annually for 5 years (no interest), the deal was done. The developer was instantly credited the $150,000 in trade credit surplus, while the dry cleaner's account went correspondingly into deficit. The dry cleaner found that each time he issued more Gift Certificates to the network they came back with new customers and usually some cash business added on. The dry cleaner decided to issue the Gift Certificates faster, and paid off the network for their new condo in two years, at their cost of goods, while growing their business.

Real Estate

  • 100% Trade
  • Cash / Trade Blends
  • Trade Down Payments
  • Trade Realtor Fees
  • Lots, Condos, Houses, Commercial, Globally!