Real estate investor Grant Cardone is expanding his multifamily housing fund strategy by pairing traditional commercial property investments with Bitcoin allocations. This hybrid approach offers exposure to both real estate and digital assets, combining their unique benefits.
The company recently launched its fifth commercial multifamily investment property: a 366-unit housing complex purchased for approximately $235 million. In addition, the fund includes $100 million in Bitcoin (BTC), Cardone told Cointelegraph.
According to Cardone, real estate provides low volatility, tax benefits, steady income generation, and stable value. When combined with the high volatility of Bitcoin, the fund offers the best of both worlds. This structure enables rental income to be funneled into additional Bitcoin purchases, creating a unique synergy between the two asset classes.
“The goal is to take that vehicle public and turn it into shares,” Cardone explained. “We believe that combining real estate and Bitcoin as a publicly traded stock is like creating digital asset treasuries. But we have a real product—real assets, real income, real tenants, real customers. We have free cash flow.”
He added, “That property will generate about $10 million in net operating income annually, which we can use to buy more Bitcoin.”
This innovative combination might pave the way for new strategies within real estate investment trusts (REITs). REITs are portfolios of physical properties listed on stock exchanges, providing investors passive exposure to real estate assets.
### Challenges Facing Crypto Treasury Companies
Related: [Metaplanet’s Bitcoin gains fall 39% as October crash pressures corporate treasuries]
Most crypto treasury companies raise funds through issuing corporate debt and equity to finance cryptocurrency purchases but often lack an operating business that generates consistent cash flow.
Cardone pointed out, “If the company is just Bitcoin, why would I invest in it? Real estate is the best treasury company you can build because housing is a non-discretionary product—you have to buy housing.”
Venture capital firm Breed has noted that the absence of operational businesses is a key reason why only a few treasury companies will survive the next crypto market downturn.
Treasury companies experienced a broad downturn in September after the multiple on net asset value (mNAV)—the price premium above a company’s total asset holdings—collapsed. When mNAV is above one, these companies can borrow additional funds to finance purchases. However, once the mNAV falls to one or below, their access to financing evaporates.
This situation can force overleveraged companies, unable to meet their debt servicing obligations, to either offload cryptocurrencies onto the market—further driving down prices—or declare bankruptcy.
Grant Cardone’s hybrid fund strategy, combining stable real estate income with Bitcoin exposure, presents a compelling model aiming to mitigate these risks by grounding digital asset investments in tangible operating businesses.
https://bitcoinethereumnews.com/bitcoin/cardone-capital-combines-real-world-utility-with-bitcoin-strategy/
