We had to privilege to sit with Joe Bettag from Coastal Properties to discuss crypto, blockchain, and the future of the real estate industry.
Based in Jupiter, Florida Joe Bettag is a licensed real estate broker in the state of Florida and is considered one of the most respected residential and commercial property specialists. Not only that, but he is also extremely well versed in blockchain technology and has a lot of interesting insight to share. Let’s dive right in!
ForumPay 1) When deciding to accept crypto payments at Coastal Properties, what was the most important advantage when partnering with ForumPay and how did ForumPay stand out from other crypto payment solutions?
- Joe Bettag: The only process that I am aware of in the U.S. where title insurance is included in the purchase of real estate with crypto – what does that mean? Without title insurance a buyer has no guarantee on the quality of title – are there liens, are there possible mortgages on the property that are still on the property? FP services offer huge advantages – instant conversions and a level of compliance to insure confidence in the transaction. Currently, we are not aware of any national title underwriters that will provide title insurance with smart contracts or exchanging a crypto wallet for real estate.
2) To the skeptics out there, what would you say are the greatest benefits of purchasing real estate with crypto?
- More wealth has been created from real estate in the U.S. than any other investment class. Real estate offers much more than just price appreciation such as crypto – for home ownership, you save money each month when paying rent for a similar property and deduct the real estate taxes and any interest on each years’ tax returns saving you tax money plus a great hedge on inflation. For real estate investments, you receive cash flow when being rented and deduct as expenses on your tax return on any real estate taxes, interest, and insurance, you also can depreciate the property for additional yearly tax savings. When you sell that investment property, you can then do a 1031 tax free exchange and re-invest all your profits tax free into other real estate. Another huge benefit is diversifying into different asset classes to spread out any risks if one asset class takes a big hit for whatever reason. This is how the most successful investors in the world create huge wealth – follow the smart money!
3) As someone who is very well versed in blockchain technology, which aspects of accepting crypto do you consider the most beneficial for the real estate industry?
- Benefits – It is another source of funding real estate purchases. Any crypto holder considering looking at buying real estate should have a good understanding why certain markets in the U.S. are doing better than others from a demand/supply basis. What is causing states like Florida and Texas to have so many people moving there while many people are fleeing New York and California? How does that impact real estate value now and in the future? Why are we seeing Miami becoming the Crypto Capital of the U.S.? I believe that all these questions are tied together when you look at what drives people to invest in crypto as many believe that U.S. Dollars aka Fiat Money is being devalued by the huge increases in money printing being done by the Federal Reserve and that it is better to replace the fiat currency with something better that will hold its value better over time – that can be said for both crypto and real estate as you should have both! The same type of independent thinkers that question the soundness of Fiat Currency tend to be in the realm of Libertarians where they place a high value on independence and freedom of choice. They tend to believe that they can make better decisions as an individual than being dictated by a centrally controlled financial system. This is what “DeFi” is about and how FP states that is “the catalyst for the democratization of money” is on its website.
4) What setbacks do you think the industry is currently facing moving forward with crypto payments and what do you consider the first step in overcoming these challenges?
- The crypto and blockchain technology is in a rapid pace of development with government behind the curve in understanding the technology to be able to regulate it intelligently. The financial services industry which includes real estate is where blockchain will have a profound impact over time in creating more efficiencies and cost savings. From a current risk/reward standpoint any real estate transaction that involves the use of crypto should be following well established compliance standards which FP follows. Owners of crypto that are trying to buy real estate right now directly by trading their crypto wallets with no title insurance as well as potential government regulatory exposure in not following AML (Anti-Money Laundering), KYC (Knowing Your Customer), OFAC (Office of Foreign Assets Control) and FinCen (Financial Crimes Enforcement Network) requirements may be paying a high price later in terms of a possible OFAC, SEC or IRS audit. This is why I like FP as that uncertainty and risk is removed from the process for both the holder of crypto that is buying as well as the seller of the real estate as both parties may have exposure if that transaction is later to be found suspect.
5) It seems like you’re a strong advocate for educating the masses on blockchain technology. Could you elaborate a little bit more on that?
- One of the current challenges is to get the real estate profession more knowledgeable about Crypto, Blockchain, and tokenization to help to navigate their customers on the best options. By having accurate knowledge, the real estate professionals will have more confidence in understanding this opportunity to feel comfortable to discuss with customers. Very shortly, my Team will be offering various classes to the real estate professional community on a national basis which in turn will then start creating a national network of agents and brokers that we hope to do business with.
6) What are your hopes for the coming years as far as crypto playing a role in major industries?
- We are right now in what I believe to be a solid 6,12 or even 18-month stretch of what will be passed as law in defining digital assets and determining core regulations for what gets defined. Following that I believe will be a rather tumultuous period of classification of all existing assets, from BTC, ETH, utility coins and security coins as well as NFTs (art, real estate, etc.) and thousands of altcoins, wherein we will then see numerous arguments and fights ensue (legally) to avoid fines and lawsuits, as well as thousands of altcoins fade into the sunset. I believe that the financial services industries that includes real estate will be seeing one of the largest impacts by blockchain. Think about where the internet was around 1995 if you were around then and what it is now. We are at that stage with blockchain and just in the first or second inning with very exciting things we cannot yet imagine!
- One of the great options we have not spoken about is how Crypto holders can use their crypto as collateral to free up some value to then use towards the purchase of real estate and keep the upside to crypto at the same time. Based on some recent conferences, interest, and turn out, we believe the market is hungry for this knowledge and becoming more prepared each day to use crypto for real estate and will embrace blockchain technology over the longer term.
7) Before we go, is there anything else you’d like to share or mention?
- Boy! We covered a lot today in a short period of time and there is so much to explore. We do have what looks like will be a great event coming up in Tampa Bay on November 4th and November 5th called the Florida Bitcoin and Blockchain Summit at the Amalie Arena with Cathy Wood, Founder and CEO at ARK with be a keynote speaker. For more information, folks can go to www.floridablockchainsummit.com.
If anyone wants more information from me, they can find me at www.coastalpropertiescrypto.com
That should be it and it was a great pleasure in discussing some of the topics on crypto and blockchain today! Thank you!
Stay tuned for more from Joe Bettag and ForumPay’s co-founder, William Erbey, discuss the topic in more detail and share some great perspectives and expertise.