Anyone have alternative investments?

[Guest]

There's the stock market. There's a rent house or two.

But what about a vacation rental, memorabilia collecting, oil royalties, tax liens, private equity and anything else? Anyone have any money in investments outside of the ordinary stuff available to us plebs? How did you get into it? How is the return?

[TornACL 7698]

I am still sitting here waiting for my 25 Billy Ripken "fuck face" error cards to be worth thousands each. So far, do not recommend.

[Snake Diggity 4619]

Aside from standard brokerage instruments and real estate (residential/commercial/land), I’ve at least looked into crypto currency, foreign currency, art/collectibles, precious metals, and additional insurance products/investments.  None of them seemed worthwhile to me.  But I am not wealthy enough to feel like I’ve maxed out the reasonable amounts in cash, bonds, stocks, and residential real estate.  Not that I’m qualified to give advice, but if you feel like you’ve got more money than you want to put in the standard stuff, I’d do one of 2 things:

1. Talk to the wealthiest people you know/trust and let them know you have some extra capital you are looking to invest.  They may let you in on investment deals with big potential payoffs that are invite-only.  I have been offered ins to invest in startups but the minimums were always too rich for my blood.  But people can make a shitload of money if they do their homework and are lucky enough to get in on the right deal.

2. Spend it.  If you are accumulating wealth well beyond what you can imagine holding in the standard instruments then at that point it becomes less foolish to buy luxury items like vacation homes, boats, etc.  Same goes for making larger charitable contributions.

[Guest]

17 minutes ago, Snake Diggity said:

Aside from standard brokerage instruments and real estate (residential/commercial/land), I’ve at least looked into crypto currency, foreign currency, art/collectibles, precious metals, and additional insurance products/investments.  None of them seemed worthwhile to me.  But I am not wealthy enough to feel like I’ve maxed out the reasonable amounts in cash, bonds, stocks, and residential real estate.  Not that I’m qualified to give advice, but if you feel like you’ve got more money than you want to put in the standard stuff, I’d do one of 2 things:

1. Talk to the wealthiest people you know/trust and let them know you have some extra capital you are looking to invest.  They may let you in on investment deals with big potential payoffs that are invite-only.  I have been offered ins to invest in startups but the minimums were always too rich for my blood.  But people can make a shitload of money if they do their homework and are lucky enough to get in on the right deal.

2. Spend it.  If you are accumulating wealth well beyond what you can imagine holding in the standard instruments then at that point it becomes less foolish to buy luxury items like vacation homes, boats, etc.  Same goes for making larger charitable contributions.

Similar boat as far as looking at other stuff, but apart from a small position in crypto and metals, haven't pulled the trigger. I think I'm prolly underinvested in traditional stock investments, but it's a level that I can sleep well at night. Obviously I would have done much better if I just dumped it all in and never thought about it again. It's just hard to have a large percentage tied up in essentially one area. Hence the interest in alternatives. 

[Guest]

I have two investments I manage - a small working interest in oil and gas properties and a larger aggregation of royalty interests in oil and gas properties. 

I’m not sure I feel like answering all of your questions. 

[Parliament 14233]

Guns

Ammo

[creeper 98]

I wouldn't necessarily recommend it, but wine has been a great investment.

[troph 24781]

90% of my investments are alt investments. I'm trying to figure out how to finish that and migrate to traditional investments. but here I am looking to get into the warehouse / distribution real estate space. mostly ownership in various private companies, 4 of them actually and then some real estate (commercial office). it's actually all I know investment wise. hell, owning Tesla, Apple, Amazon might as well be stonks to me.

Edited August 8, 2023 by troph

[Rudiger 1160]

Do you qualify as an accredited investor?

[RDCanecutter 26379]

I have land that I allow sharecroppers to work.

[troph 24781]

How did I get into it?  Adjacent to lawyering mostly, but my/our first alt investment was in 2000 before I graduated from law school. We bought what is essentially 2 mailbox etc locations. Made 3x in 7 years. 
 

from there I left lawyering to buy another business in 2007 and we got hammered in 2008-2010. Lost it and another related business. Suuuuucked. Basically bankrupt in 2011. Didn’t file, stuck around to see another day.

fast forward…. 

I’ve invested cash, started companies as a co-founder and have taken advisor equity with varying equity stakes from 0.75% up to 100% across the following industries:

B2B distribution (2)

Retail (1)

Consumer products (1)

Manufacturing (1)

Hospitality (5)

Software (2)

Real estate (2)

”Pimp my Jet” (1)

I’ve had the following returns:

35x

25x

8-10x and counting 

 4x and counting 

3x

3x

2x and counting 

.5x 

5 at $0.00 (pain)

1 completely TBD

1 never got off the ground

I’ve had 2 home runs out of about 15. It’s about 1 out of 10 if you’re really good (it means I’m due for more losses). So if you do 1 you need to do 10. To do 10 you need to see 50+ (really 100+) and pass on most. I was lucky … in 2013 I realized my law desk was a poor man’s private equity desk. I got to see dozens of deals every quarter I worked on, most not available to me but they were in front of me to do the work so I got to evaluate quality with a lot of quantity. It made evaluating the few that I had chances to take a risk on easier. 

I need a couple more to hit in the next 10 years and I’ll be done. 

 

 

Edited August 9, 2023 by troph

[Hornbeliever 712]

I have crypto that I luckily got into in 2017.

AndI know you said rental home was zzz zzz, which I have in city, but I’m laddering some CD’s for Jan 2024 to buy a property in the country somewhere.  Could be rental that might be long term or air bnb.  Could be land only.  I’m not sure but I know I’d like some more country in my portfolio.

[pantone159 719]

8 hours ago, FirstTimeCaller said:

But what about collecting? How did you get into it? How is the return?

Investing in collectibles only makes sense for things you like collecting for their own sake. They generally have poor returns, especially considering transaction costs, liquidity, and the alternatives. But if you like something enough to collect it, you have something cool, and usually worth at least something, for your fun. It adds some financial diversity. But if you are just looking for an investment, collectibles would just be a money pit.

Stacking precious metals could be an example of that, if you want to channel your inner dragon, you could collect gold pieces or whatever, and have something to sell if you wanted or needed to. But I would not expect high returns.

[Biff Tannen 45663]

I'm waiting for you all to die and then I will plunder your remains.

[Surly Bevo 24908]

I’m emotionally invested in the football team of my university that I love reaching the promised land under the leadership of an offensive wizard who is a recovering alcoholic that then reformed himself with the guidance of Satan.

Does this count?

[troph 24781]

my bestie has a beanie baby worth $50,000 except she took the tag off long ago so it's worth $0.50.

[Boss Hogg 808]

There’s plenty of companies out there that do syndicated real estate investments in things like large multi family projects. Your return is obviously much less than the principals, but I had a small amount in one that did flip. With the rental income over the course of project it was like 2.2x in 4 years. It does feel like a bit of a scammy space though in general. A lot of marketing to gullible people willing to part with some dough. Principals get fat off your contribution of capital. 
 

Oh and when I first started making money I put small amount in a local food startup that is basically a zombie co. 
 

A lot of these things are just who you know. And you might just be hearing about the less desirable options. Then your capital is locked up. 
 

Probably the most liquid, uncorrelated alternative asset class is crypto, but buyer beware big time. 

[troph 24781]

37 minutes ago, Boss Hogg said:

There’s plenty of companies out there that do syndicated real estate investments in things like large multi family projects. Your return is obviously much less than the principals, but I had a small amount in one that did flip. With the rental income over the course of project it was like 2.2x in 4 years. It does feel like a bit of a scammy space though in general. A lot of marketing to gullible people willing to part with some dough. Principals get fat off your contribution of capital. 
 

Oh and when I first started making money I put small amount in a local food startup that is basically a zombie co. 
 

A lot of these things are just who you know. And you might just be hearing about the less desirable options. Then your capital is locked up. 
 

Probably the most liquid, uncorrelated alternative asset class is crypto, but buyer beware big time. 

a ton of truth here. 

[Guest]

2 hours ago, Boss Hogg said:

A lot of these things are just who you know.

Seems to be the thing, reading Troph's posts. He seems like a miniature Berkshire Hathaway.

[troph 24781]

2 hours ago, FirstTimeCaller said:

Seems to be the thing, reading Troph's posts. He seems like a miniature Berkshire Hathaway.

chick here but otherwise I aspire to it, but alas my two best returns were 0.75% and 3.5% stakes. still amazing outcomes but my larger stakes are solid to good unless strike outs which suck.

I think real estate is a great way to start, so is buying a small business or starting one and just banging out the sweat equity. heck we started with mailboxes etc. that's almost laughable. like anything else you will fail, you need time and opportunity to learn from mistakes. that's why I mentioned being nearly bankrupt in 2011 - that was about the midway point from start (2000) until now (2023). made good money, lost it all, had to start over, 10-12 years later doing ok.

the biggest mistake folks make is investing in anything that comes there way because it's there. you have to build a pipeline - of people and deals. find a guy (or gal) (or several guys/gals) you trust who have deal flow and follow their lead). that's the original point of angel networks. my best deals so far I followed someone else I trusted.

as mentioned the other entry point is real estate, even smaller commercial properties.

so if you want to do it, you need to put in the effort to network, be ready to make several investments (alt investing version of diversification) and you've got to be ready to fail and succeed because there is zero chance you won't fail some.  honestly, it's hard work, but to me so is pouring over market research reports for self directed traditional investing which I'm terrible at.

Edited August 9, 2023 by troph

[Incredulity 11649]

Would you be willing to share the business type and any critical factors/decisions/fortunate occurrences in your most successful endeavors?

Just out of pure curiosity.

[troph 24781]

you're going to be shocked at the lack of a system here... it has been relatively intuitive and right place right time, not formula or math based but it points to the importance of finding quality people who are looking for capital or advice. and truly I'm just mediocre at it. I wished I had taken some different career choices so I could be more big time but hey, I've carved out a path for me I guess.

the top two?

one was a couple of guys that worked in the bar industry for a while, worked up through the employee ranks, started a bar it was doing ok, started a second one it did great, then I hopped in on a second location as general counsel at the parent company level and rode that to a 25x. I did nothing but lawyer shit for them. 

the other one that was a really awesome win was cash and advisor equity. met the founder in an executive suite. he ragged on me for having the corner office with a view in that suite, like I was spending too much money. He had a back corner office, cheapest exterior window office in the place and had 3 other people in there with him. he had made a name for himself at a 1990s public company that became infamous, then started a company and exited successfully and then started another company and was looking to raise capital. I *should* have hopped on that full bore and helped raise capital, instead I thought, nah I'll just put some money (emphasis on some) and he fucking blew it out of the water. I was an advisor until Series A then he moved on to a bigger law firm, but it sold for a healthy 9-figures a few years back. 

Both of these had a track record, both I had some amount of relationship with, both were modest risks for me and I would not lose everything. 

One of the real estate deals that was a solid 3-4x was connected to one of these guys. 2 of the zeros were connected with one of these guys. 

sometimes I look for an easy fix, decent business, not rocket science and maybe a sales guy that can win an account with ease but he lacks legal, finance, strategic thinking. found one and I'm basically a full partner with him and what he needed was a balance sheet clean up. had some loan shark debt and some other crap, had a bad, bad partner we kicked out years before and we needed to turn the screws a bit more after I became his partner (buyout 1 was too generous in hind sight, so we did a second buyout in the form of a restructure). I got a bank to loan him money too on a signature (my god his financials were terrible). but we cleaned up his balance sheet, negotiated hard style out from under a partner buyout and that freed him up to sell. His gross revenue is up 200% since I got involved.

I generally bet on people, not the idea or the business. I'm not smart enough to fully understand if their business is going to make it or not, but the other thing I look for is a sales oriented leadership team.  Don't get me wrong, I evaluate their idea, any existing financials, look for systemic problems, and do some real analysis but when push comes to shove I'm more inclined to bet on a guy I really believe in way more than a business I believe in.

My wife's construction business is one of them too, and it should count because I started doing deals before we became romantic. With her it was the fact that she didn't like her existing partner, needed finance/raising capital help and she both knew the market (many years doing it) and she built really sexy homes. Same deal, bet on her not so much the idea.

It has been a bit easier for me because I have something tangible to offer in addition to cash but that raises an important point. you generally can't start hitting big home runs in alt investments right out of the gate.  you have to get into an ecosystem, you need to gain knowledge of some kind and then use that knowledge and the people you meet and know to find and capitalize on opportunities. it's really not much different than job hunting there just aren't hard and fast rules or go-bys.

effectively it's a brand of entrepreneurship. For those with day jobs (I tend to have one of those most of the time too), it has to be something that isn't a total time suck. that's why so many traditional investors end up in real estate when they get the idea of doing alt stuff. you can learn it, invest in it, and it doesn't take all your time. from there you can meet all kinds of folks and then use all of that activity to see if quality surfaces and then take advantage.

I've also missed waaaaaaay more wins than I care to remember. I mean way more, like I could be fucking loaded if I had put more in this one, or bet on that guy, or done that deal. We lost 3-4 spec opportunities during covid that I'm still kicking myself over.  investors got spooked, understandably, but man those deals took off for other builders. I thought this one kid was a fucking idiot. he's VC backed now and has positive cash flow. Honestly, I could keep going on the deals I shoulda, woulda, coulda, and it would put me in a foul mood.

Bottom line for me is I can't do it any other way, I get super bored, I suck at saving evenly every month, I love taking risk, and I don't give a fuck if I die broke. If I want to spend my retirement on a sailboat or in the mountains I can do it rich or poor, doesn't matter. Mexico is cheap, Colorado is expensive, both have mountains.  A brand new Swan is nuts expensive but you can get a sailboat on the cheap too.  everyone dies and can't take shit with them so whatever. 

I think for others traditional investing works. I came of age in the first dot com boom and I tell folks I think I'm the only one who lost money on Dell stock in Austin.

Edited August 9, 2023 by troph

[Cheeseweasel 26438]

5 hours ago, FirstTimeCaller said:

Seems to be the thing, reading Troph's posts. He seems like a miniature Berkshire Hathaway.

She's the Oracle of Odessa.

[Incredulity 11649]

1 hour ago, troph said:

you're going to be shocked at the lack of a system here

I’m not.  I know an angel investor type who will swear his successful investments have had no correlation to the amount of due diligence he has done.   Obviously a game for the bold.

 

 

[troph 24781]

2 hours ago, Incredulity said:

I’m not.  I know an angel investor type who will swear his successful investments have had no correlation to the amount of due diligence he has done.   Obviously a game for the bold.

 

 

The best due diligence is knowing people who are successful in that space having them take a look and having them tell you what they think and then …. listening to them. 

[closetohumping 17433]

Got ten John Smoltz rookie cards.

[StassneyHorn 6573]

Been eyeing land plots in San Pedro Belize. Seems like it’s only getting more popular and more investments are being made in road infrastructure along with a hospital being built which would be attractive to more ex-pats. Same grid concerns as always, but the investment in the north side of the island seems very attractive.
 

This is how I talk myself into vacations and lose money.

[Hefeweizen 5310]

Real estate, if you have plenty of liquidity and balls of steel.  I mean, recently it’s all been great but there can be some wicked swings in value, and you’re fucked if you need that cash fast.

 

I have had opportunities to be in multi family and single family deals and didn’t like the risk profile.  Outside of silly stonk bets I am just way too conservative.  
 

My dad has a stamp collection that was worth several hundred thousand at one point.  It’s not worth anywhere near that as philately has just about died out.  He also collected coins but my sis got those as a wedding gift.  I have always viewed “stuff” with suspicion.

[Boss Hogg 808]

You want to be in the alternative investment game??? I’d like to offer my shares in a fledgling local food startup for private sale. They’re available for ten cents on the dollar. Better act now! These won’t be available for long!!

[troph 24781]

22 hours ago, StassneyHorn said:

Been eyeing land plots in San Pedro Belize. Seems like it’s only getting more popular and more investments are being made in road infrastructure along with a hospital being built which would be attractive to more ex-pats. Same grid concerns as always, but the investment in the north side of the island seems very attractive.
 

This is how I talk myself into vacations and lose money.

We’ve been close to buying in Cozumel / PV and Costa Rica. Never did, just didn’t have the gumption to turn vacation time into business. But it’s intriguing. 

17 hours ago, Boss Hogg said:

You want to be in the alternative investment game??? I’d like to offer my shares in a fledgling local food startup for private sale. They’re available for ten cents on the dollar. Better act now! These won’t be available for long!!

Gotta stop using your product yo. Save some for your customers.

[G650 14229]

21 hours ago, Hefeweizen said:

Real estate, if you have plenty of liquidity and balls of steel.  I mean, recently it’s all been great but there can be some wicked swings in value, and you’re fucked if you need that cash fast.

 

 

Yeah this. But returns can't be beat. It's adjacent to my day job of building subdivisions so I am intimately involved with the economics already, not sure I'd recommend to a rando off the street. I've seen a lot of guys wiped out on bad deals.

 

Something else I didn't get into with the thought of investing but has paid is watches. Even with the little pullback it's way up. Music equipment too.

[Hefeweizen 5310]

On real estate, watch the guys who charge a management fee.  There’s an incentive to let that ride for a while and be in no hurry to finish.  Meanwhile the equity partners are getting cash calls and bleeding until lots are closed.  I steer clear of those guys but real estate is full of true sharks.

[RDCanecutter 26379]

On 8/11/2023 at 8:12 AM, troph said:

We’ve been close to buying in Cozumel / PV and Costa Rica. Never did, just didn’t have the gumption to turn vacation time into business. But it’s intriguing. 

I love Mexico but I wouldn't buy anything bigger than a refurbished VW Beetle there. Easy getting in, but start doing conspicuously well and they've got you hanging by the toenails for whatever little consideration seems fair to them. Nobody ever lost votes milking the gringo. And that's if you're extorted legally.

We are the current manifestation of Cortes and fair game. Of course people are friendly, and some will be real friends, but if Chicago got nuked people would cry for their dead cousin there, and if they didn't have a cousin there, probably a shrug. Some nacos would light fireworks and dance around all chuntaro style. I love Mexico but assholes are assholes.

Funny, the French wrecked shop in half the country and probably killed more people, but they finally left and Maximillian died muy macho, so all is forgiven and the French are cool in Mexico. The White Guy speaking with a French accent on the telenovela gets laid and relaid. So maybe act French. And do something to give back locally, like volunteer English hour at a school or something.

Costa Rica is a different beast. Mexico, for all its own shot-off toes, it's got a pride I respect. Maybe I was too much in touristy areas, but Costa Rica seemed way too ready to do back-flips for a dollar. I'd like to go back when I'm not counting college students every time the bus gets ready to move.

Anyway, Costa Rica seems stable-- compared to its neighbors. Mexico can't control its own territory and has a history of grabbing shit back from foreigners.

[SimonBolivar 10957]

On 8/12/2023 at 3:21 PM, RDCanecutter said:

The White Guy gets laid and relaid.

In my experience, but I'm never after any rich Chilangos.

[wackawacka 177]

Every wannabe seed investor that I have known or met lost way more money than they made. It was done mostly for ego.

To Troph's posts, only invest in alt investments if you can really know the space or have someone who has deep industry knowledge test it out.

I found that you can really make a lot more money in alt investments but sourcing credible ones is the challenge. I rather invest in Joe Bob the plumber who is starting his own SMB plumbing company vs 20 something who is going to burn through capital as they have no go-to-market or even product sometimes.

If I had the time or desire, I would invest in SMB manufacturers in the US or roll-up local service companies that owners are about to retire with no succession plan.

[Boss Hogg 808]

On 8/10/2023 at 2:28 PM, Boss Hogg said:

You want to be in the alternative investment game??? I’d like to offer my shares in a fledgling local food startup for private sale. They’re available for ten cents on the dollar. Better act now! These won’t be available for long!!

Wow y’all missed out! I got an email out of nowhere from this one saying they’re considering a lowball offer that’s in the ten cents on the dollar range but could rise to about 25 cents on the dollar if certain incentives are met. Cha Ching!

 

 

[Dbeasy 15040]

I’m looking for someone who has done residential lot redevelopment in Austin, ie scrape a lot of existing old house and rebuild one or more new houses/condos/duplexes on it. DM me if you know someone. 

[Not a Sock 2311]

In all seriousness transferable machine guns have an unbeatable appreciation value. The Hughes amendment means that no new machine guns can be added to the NFA registry after 1986 so the supply is fixed and always shrinking as guns get destroyed or confiscated. There is a high barrier to entry as the cheapest machine guns are in the 10k range now and there is always a risk of legislation wiping you out.

[troph 24781]

15 hours ago, Dbeasy said:

I’m looking for someone who has done residential lot redevelopment in Austin, ie scrape a lot of existing old house and rebuild one or more new houses/condos/duplexes on it. DM me if you know someone. 

We’ve done a lot of them in 04, we are on pause at the moment due to interest rates and risk for at least all of 2024. Happy to discuss. 

Edited October 5, 2023 by troph

[Superhero 8827]

Rare whiskey / whisky prices have gone up several fold in the past few years. Bottles can fetch thousands of dollars now. Look for higher age Macallan, Pappy, Yamazaki, Hibiki, etc.

Resist the urge to drink it, put it away for a few years, and as the demand for rare whiskies go up, sell for profit. 

[UT_OB1 2213]

Let me try the right thread this time. 
 

Magic cards. And make sure to cross the (nerd)streams. I present to you what happens when mtg, Tolkien, and greed mix:

 

“I’ll take it,” said Post Malone who is well known for his ardent and deep-pocketed love of Magic: The Gathering.
We don’t know how much he paid for the card, but it was probably a lot of money, with reports valuing it between $1 and 2 million.

[T’Boo Ted Marshall 2731]

On 9/4/2023 at 6:54 PM, wackawacka said:

If I had the time or desire, I would invest in SMB manufacturers in the US or roll-up local service companies that owners are about to retire with no succession plan.

I'm doing a roll up with a PE group focused on Residential services. I think they are going about it backwards but I'm aware PE wants bigger returns sooner.    

[troph 24781]

5 hours ago, T’Boo Ted Marshall said:

I'm doing a roll up with a PE group focused on Residential services. I think they are going about it backwards but I'm aware PE wants bigger returns sooner.    

I suspect you'll end up doing really well.  the growth/roll up of residential service companies is a tried and true strategy (not without massive headaches you've share about on your thread).

[T’Boo Ted Marshall 2731]

17 minutes ago, troph said:

I suspect you'll end up doing really well.  the growth/roll up of residential service companies is a tried and true strategy (not without massive headaches you've share about on your thread).

It's possible, but what we "should" get has lessened substantially since we changed capital partners and has me gruntled.  

[troph 24781]

13 minutes ago, T’Boo Ted Marshall said:

It's possible, but what we "should" get has lessened substantially since we changed capital partners and has me gruntled.  

money guys suck.

[T’Boo Ted Marshall 2731]

money guys suck.

Correct. It irks me when they use the term “partner” when we brought the thesis and executed 95% of our first transaction. Goalposts move frequently.

[Coelenterate Fuccboi 13088]

On 8/9/2023 at 12:13 PM, Surly Bevo said:

I’m emotionally invested in the football team of my university that I love reaching the promised land under the leadership of an offensive wizard who is a recovering alcoholic that then reformed himself with the guidance of Satan.

Does this count?

Yes, but it’s a ponzi pyramid scheme. Only the “wizard” is getting rich.

[Rimbo 25910]

i gotta watch

[Gatorubet 30185]

i’m into food and shelter right now, and the cost of both are going up!

[Parliament 14233]

2 hours ago, Gatorubet said:

i’m into food and shelter right now, and the cost value of both are going up!

1234