Completing The World's First Blockchain Real Estate Transaction With Edward Rodriguez

Welcome to the Next Level Income show where it's our goal to raise your income, investments and your life to the next level. I'm your host Chris Larsen. You can get your free copy of our book@nextlevelincome.com just click on the book link. Also, if you're an accredited investor, be sure to check out our Invest link to learn how to gain access to our self storage fund as well as other institutional quality real estate opportunities. Today. You are not going to want to miss this episode with Edward Rodriguez. Starting at 11 years old, he started a chain of hot dog stands and from there he built a business in commercial real estate, was a quantitative analyst for a fund, and ultimately started mining Bitcoin before launching a new blockchain technology. You're not going to want to miss today's episode with Edward Rodriguez. Today's show is sponsored by Money Insights and their investment optimizer strategy. In my book, I share how I use the same strategy starting over a decade ago to invest my money in two places at one time. This strategy has been used by the wealthiest for generations for estate planning, minimizing taxes, preserving wealth and increasing stability for their investments. Now you can do the same thing. In addition, you can build a plan to build an emergency fund, pay for college, fund a business plan for retirement, and ultimately optimize your total financial picture. To find out more information, check us out at the Banking link at Next Level Income. Edward J. Rodriguez is the CEO of BPN Capital Group, a Miami, Florida based multi service defi firm powered by blockchain technology. Edward is a serial entrepreneur with two decades of professional experience. He's founded multiple companies including Blastbooks, a social media marketplace for college students to buy and sell college textbooks for free, and DRMM Properties, a commercial financing firm. He also has experience as an independent consultant performing quantitative risk analysis for elite investors as well as funds. Currently, along with BPN Capital Group, Edward is focused on integrating the commercial finance industry with blockchain technologies, specifically through tokenization of valuable hard assets. Edward, welcome to the show.

Thank you.

Thank you for having me, Edward. No, I'm really excited. We were talking a little bit before the show. Your story really appealed to me, which I'd love for you to share with the audience in a minute, but also just what you're doing in the blockchain space. And a lot of our audience members that are listening, they're very accustomed to real estate, they're accustomed to commercial real estate and doing these deals. And one of the missions of Next Level Income is to provide our Investors these opportunities, I can't wait for you to share how you are sharing things that were reserved for billionaires and hedge funds with just the average everyday investor. But before we jump into this, Edward, would you mind sharing a little bit more about your background, how you ended up here in Miami in the United States and what you're up to today?

Definitely. Hi, my name is Edward Rodriguez. I'm the CEO and founder of BPN Capital Group. I'm originally from the Dominican Republic and I moved to Miami in 2005 and it was, it was coming to my second home pretty much. I started in management in real estate barrier on my brother when I arrived. Had already been in the industry for 10 years. I was blessed to literally he took me under his wing and, and pretty much taught me all the tricks and pretty took really, I say make me fall in love with it really. And through that, then I became my commercial real estate agent. Right before I became a commercial real estate agent, I introduced to some private clients to do quantitative risk analysis for them. I had a great mentor that was retiring and pretty much was looking for someone that was not a yes sir person. And when I was introduced to him, he saw this guy that pretty much, if I don't agree with something, I'm gonna tell you.

My man, my man. I love it.

So right off the bat he asked me a couple of questions and obviously I was not in agreement with it. And after that he was, you're the guy. I mean, he had met with Harvard graduates with guys that were trying to get exactly what he was offering and none of them were able to pass the test. And here's this guy. At the time I was 17, about to turn 18.

Seventeen, yes.

He goes, you're my guy, you see, I'm going to teach you stuff that you're not going to learn anywhere else. He had been in the quantity for close to 40 years. And then he put me in touch with some of his clients as well and he went on from there. And I did quantitative risk analysis for about four years and a half until I got to a point where I felt that yes, the money was great. I'm not going to say it wasn't. The money was fantastic. But I got to a point that I wanted to do more, you know, and I got to a point that I also wanted to try to level the playing field by bringing my talents to commercial real estate and all of the things that I had learned pretty much within quantum risk analysis to my other industries. And it was a great ride. So in 2010, I decided to become a commercial real estate agent. And I did that for nine years. I did it until 2019. I still hold a license, use it mainly for personal investments and friends and family. And in 2013, discover blockchain. And pretty much it's like everything I had been doing in my previous professional life was literally to get in line to what I learned with blockchain. It was the, you know, piece of the puzzle, I could say. And I started mining first. I wanted to really understand the technology because there was a lot of things in the Internet that I was like, I really want to understand it firsthand. You see, I don't want to go by why Joe here is telling me, because then Joe is telling me a, but Nathan is telling me that A is not accurate. So I started build Ethereum rigs. That was my first project. I started building mining rigs myself. I went through a lot of trial and error and I did a couple programming courses in YouTube and I hire a couple of computer engineers to teach couple a thing or two about building a computer. And in 2014, I literally started my mining farm.

This was. And was this in. Was this down in Florida?

Yeah, this was down in Florida.

That is awesome.

Yeah. My hardest lunch in mining was that the heat here, the weather does not help.

Yeah. Because you got to keep the. You got to keep the rigs cool, right?

You got them cool, you got to keep them cool. And pretty much every single person I brought in to help me with the problem was like, at is possible. This is not gonna work, man. I mean, it's. It's 85 to 90 degrees every day here. And your machines produce an excess that will make this room be at 120.

Yeah.

So when I started, I had at a point about 16 Cs on running 24, 7.

Wow.

Yeah. And at a warehouse. And pretty much I literally to a point where I was frustrated. I was tired of hearing no. So I said I got a reset and I got to start from zero. So I started thinking, well, cars produce an immense amount of heat. How do cars actually retain all heat and don't overheat? So I started thinking from. I went through the basics of other industries that had to deal with the same problem. I also look in a YouTube videos of how guys that farm marijuana in house deal with the heat because that produces a lot of heat as well.

From the lights.

From the lights.

Yeah. How about this? I don't have any experience in that nor blockchain mining or bitcoin mining, but yeah, it makes Sense I had no experience in it.

But then I started again researching because everything the pros were me was against my odds. Right. So after a three month period of researching and playing around with what I was doing, I found my solution. So I built in a system, helped me to get the heat outside, similar to how people that farm marijuana inside do it. And aside from that, I created a huge fish tank and I put in some of the miners inside with computer oil. And I bought this huge system that worked like a refrigerant that we have in the car. And pretty much I had this huge thing on top of the tank and hot air came in through one side and coal air came in through through the other. So pretty much I had oil going in, oil going in through this tube and then coal oil now through this one.

Amazing.

And I'm telling you, I was able to reduce from 16 acs to about 2. It was amazing. It was a great ride. I can't complain.

I love it. So you start off and you didn't even talk about your hot dog stands when you were 11 years old. Yeah. So we're going to talk a little bit about you guys. Probably heard that in the intro as well. But what I love about you, Edward, you've been a serial entrepreneur your entire life. So quantitative analysis, seeing how the markets work, going through the commercial real estate and what a decade to be in commercial real estate. Right. Those 10 years. Phenomenal. And starting with really almost like with the shovel mining, literally mining for bitcoin. So let's back up a little bit. So for people that this is a little bit new to, and I'm just reading a statistic this morning, only 6% of Americans own cryptocurrencies. Only 6%. We're still very early on in this. So if you could share a little bit about what is bitcoin, what is tokenization and the blockchain before we dive into what your business really does.

Well, I'm going to make a separation. So blockchain is. You got to see block the Internet. You see, if you go back to the 90s and you will be able to separate Yahoo, for example. Yahoo and the Internet were not the same thing. Yahoo was a company that used the Internet to function. It's exactly the same thing with blockchain. Blockchain is the Internet is the system.

That's terrific analogy.

Cryptos to function. Right. So blockchain can use for everything. You see, you got to see blockchain as this accounting system that is unoptable. And the information after it gets published, cannot be tampered with. That's really the big problem blockchain resolves is transparency. You see, I can tell you something today and go back in two days later and change it. You won't let me. You see, also for me to legally make a change, if, let's say I'm doing on a smart contract, it leaves a trace on when I made the change, at what time I did it, and from which IP address, I can even add which IP address I did it from. You see, that's what blockchain gives us. I mean, the other day I was giving an analogy to someone that didn't understand it and didn't understand the benefits. It didn't matter what I said, he didn't understand the benefits. And I said to him, all right, let's make it simple. You see, our government just issue a couple trillion dollar bailout. Not bailout, a stimulus for Covid. Right. Well, let's say we all Americans, we go ahead and say we demand for the government to show us what they did with our tax money. Right.

We want to understand.

Right. Well, the government unfortunately will take at least three to five years to come back with an answer. God knows if the answer is going to be accurate. Right. Well, if the government had a blockchain system implemented to do all of this, it will take less than three days to give us something. Not only that, they could tell us it's in a public ledger, go revise it, go review it. That's the beauty of it, you see. They cannot tamper with the information after it's done. That's really.

Wouldn't that be awesome? I can't wait till that day comes.

Well, I mean, I think that the benefits of blockchains to humankind, and I have said it before, I think it's the best and most advanced technology that humankind has ever encountered with. And I think it's one of the industries that in 10, 20 years, the same thing that happened to the Internet back in the early days. Today the Internet is part of our lives and it's pretty much we use it to our gps, we use it to order food, we use it to order a taxi.

I mean, and now we got 5G and you can be anywhere and have high speed. It's amazing, right?

It's amazing.

Yeah.

Is the same type of thing. I mean, I'll say that people cannot take their eyes off blockchain because it's going to be in almost every single technology that we are going to be used. Going to be a Part of it. And a lot of people don't understand how cell phone technology works. Do they really need to? No, they don't. It works.

You see, we're electricity. Right. You know, I always, you know, people talk about, you know, I love that analogy. It's like, you know, I don't understand. How do you understand how electricity works? Like, really understand how electricity works? This is coming from an engineer. Like, they got taught how electricity works. I still couldn't explain it to a layperson very well. You don't have to. You just know when you plug it in, it works. You know, when you turn the owner. Yeah. So, Edward, what do you see as the big. Obviously, commercial real estate. Let's hold that for a bit. But what other areas do you see as big opportunities with blockchain, you know, with respect to sectors that are gonna. They're gonna rapidly transform and benefit from this technology?

Well, my mission for the past, I will say three years, crypto was the first use of blockchain. Right. Because a lot of people don't understand. Blockchain is not a new concept. Okay. This was introduced in 1991.

91, yes. Didn't know that.

Unfortunately, it was not accepted. And no one saw what. The kind of benefits that this could actually give to humanity back then. Until this person or this group called Satoshi Nakamoto saw what happened in 2007 and said, enough is enough. Okay? Enough. Enough is enough. And he came up with a white paper for a peer to peer currency, which is Bitcoin. Right. And it's the first use that pretty much blockchain has had. From there came Ethereum, then Litecoin, and the rest is history. Right. Then all the others came from that.

Do you know the name of the guy that developed Ripple?

I actually have spoken to their group in the past, but now I forget their name.

His name is Chris Larson. I wish I had figured that one out. Yeah, he founded Eloans and then Ripple. Yeah, he's definitely a little bit more. More higher net worth individual than this Chris Larson. I can tell you that.

Well, I can tell you something. His vision today is one of the. Because a lot of people don't understand it. The repo network system is being used by a lot of banks, and it makes the wiring system that's been obsolete for God knows how many years. It makes it seem like a thing of the past. You can transact within seconds. Interesting. Yeah. I mean, what Ripple did for the wiring industry, I think is revolutionary. And I think it will keep advancing with time and Again, it was the first. It was the first use of the technology. The technology can be used for so many other things. I just gave you the example for the government. You know, it could be used in the medical industry, it can be used in the automobile industry, it can be used the energy industry, can be used in the biofuel industry. Again, you got to think of it as this huge accounting system that's uncorruptible. That's really how you have to look at it.

Love it.

Yeah. And I mean, I see it being part of our lives, of our everyday.

And, you know, just the things that can do for freedom and, you know, the ability to maneuver around the world. And we just had a guest on the show talking about, you know, these digital nomads that travel the world and they don't really have a home country. And it's really. It's really interesting if you put those two concepts together. So, Edward, let's talk about BPN Capital, this momentous transaction that you guys are on the verge of doing here. And, and really how you are, I would call it, democratizing these investments for your average everyday investor.

So first, let's go back to one days. You see, my one days, I saw that there were a lot of investments that were reserved for groups and funds or investors that billions under management, you see. And I always ask myself, heck, how can I give this access to your traditional guy, to your. That only has 100,000 to invest or maybe 5,000 a year? Because not all of us have the same act capital? And it was frustrating, I must admit, it was frustrating. Because when you see someone making 100% of return the day that we close, and then you see someone in a real estate transaction making a 5% cap a year on their money is like, for Christ's sake, it's a huge gap. And the reality is it's a huge advantage that people that have a lot of access to capital have. How can I level the playing field? And that's why I said earlier that when I discovered Blockchain at the beginning, it felt like the missing piece of the puzzle, you see. And I had to go to this venture that in 2018, I remember like today telling my wife, it's time. I'm going to let her get out of everything else I'm doing, and I'm going to concentrate 100% on this project. And she goes, what project? And I go, well, I'm going to concentrate on the Higher Asset Tokenization project. She had been hearing me talk about it for five years.

Can you repeat that one more time. What did you call it?

Hard asset tokenization Project.

Hard asset tokenization.

Correct. And when I said that, she's like, oh God. Because she knows how I get when I get like this and when I get invested into a project, she saw it many times and pretty much she's like, this guy is going to go crazy on this new idea and he's going to put a ton of money into it. I had a huge team of lawyers already ready to go to start this. And at the beginning she didn't get it. She couldn't understand a lot of what I was doing when I started back in 1314. But I think after 15, 16, she started understanding what I was doing and she started seeing how revolutionary the technology was. She finally came around and came on board and became the CEO CFO of the firm.

Wow. And what is her background, Edward?

She's an accountant. So she's a fraud. Certified fraud examiner.

Awesome.

Yeah. So pretty much correct. It goes hand in hand with a lot of what we do. And I mean at bpn we are capable to go back to the point that you were making to say, hey, commercial mortgage backed securities. A lot of those loans get packaged into bonds and sold in the secondary market to only high net worth investors that kind of have the capital to say, hey, we have a couple billion under management, we can afford to buy trade of 100mil or 500mil or 700mil, you see. And because of that, they get access to one of the safest investments out there. And it's kept, you see, it's kept trapped. Aside from that, they also get access to deals where they're capable of saying, we're going to put in 20% of what it costs to develop this project, but we want 50% of the equity on day one. If you digest and understand what I just said, they're putting 20% down of what it costs and they want in return 40 to 50%. The day they close, they just made either 100 or 150. And on their money the day they close, okay? And the reality is that structure is there and it's always been. But if you don't have, man, if you need 100 million to complete a project and that's 20% of what it will cost, only a billionaire can bunny up 100 million. No one else in their right mind is going to go up and say, I'm going to write up a check for 100mil and my net worth is 150.

Even then, the centimillionaires in this country, there's a lot of them, but it's still a very select pool. So how does your company take that structure and bring it down to for instance people that are listening on the show, lots of accredited investors, they say hey yeah, I could invest 100,000 but not 100 million.

All right, so pretty much let's go to the commercial mortgage backed security because we were doing one as we speak and it's called I'm excited to hear this token security. And pretty much it's an award first class asset that sits on downtown Miami in area four. Fantastic tenants. And we can get this loan done with UBS or any other CMBS lender out there. And we chose to do it this way because we want to give the access to the investors that are so lucky to have a lot of money under management. So what we do is we tokenize it using blockchain and investors the opportunity of buying tokens that represent a portion of the value of the whole mortgage. So instead of selling it to a single lender, which we already, when we came out with this structure, we had lenders approach us and said will you sell the whole thing to us? And I'm like guys, it's like, do you listen to what I said? No, that's not what I'm intending here. That's not my intention. My intention is to give the access again to accredited investors, small family office and small funds. Yes, you can participate. We don't have a problem with you guys participating because I don't believe in should leave you out of it. No, I believe we should all participate but also give access to the small guys that don't have so much money on their and many sub beauty that now you can say hey, even though I only invested 100k gonna be able to profit the same way someone that's worth 2 billion, 3 billion is able to capitalize on these opportunities. And on the other note, the other structure that I was telling you that they come in regularly with 20%. We already have a structure like that. You see we have a building in downtown Miami that's going to be coming up by a well renowned developer that has built a couple of most iconic buildings already in South Florida that we're doing on a structure with them. We're investing.

Not the, not the recent ones though, they had to tear down, right?

No, no, no, not at all. I mean this, these are groups that have been because in luxury buildings of 60 to 100 stories.

You got some beautiful, beautiful properties down there in Miami. Just gorgeous. Amazing.

Correct. So pretty much they're going to be able to do the same thing the billionaires are to do. The only difference is they have a lower coming price and there's no limit on how much they can invest. They want to invest, they're going to be able to invest 1,000. And pretty much on day one when we close that, they're going to own 40% of the equity, that structure. So we're raising 20% of what it costs to build this project and the cap back 40% of the equity. They will make 100% of the money on the day we close.

Awesome.

Aside from that, the the project is finished, which it takes about three to four years to complete the construction, the building appreciates another about 60 to 70%. So not only now have they appreciated 100% on day one, now have an extra 60 to 70% after the project is completed. Total profit of 170%.

Beautiful.

See that's what we're looking for. That's the type of access we're looking to put in their hands and to be able to participate within this structure before we're reserved for a very select group that had a lot of money under management.

And just to be clear, Edward, you have built the infrastructure to make this happen going forward. This isn't a one off thing.

That's accurate.

Yeah. Which is awesome. So I want to stay in touch as you continue to build this out and do more deals. What are your predictions for the next five years? So we'll stay in touch in the future here as you continue to build this out. But what do you think this is going to look like after these first deals get done?

I can tell you I have had a couple bank top executives, even one of the founders of a bank, reach out to talk about what we're doing. And I was very clear to them. I told them, listen, this is a thing of you jump on the bank wagon now you come in late and unfortunately by then you're going to have to pay a premium. So you decide which way of history you want to be. Do you want to be a raptor or you just want to be a follower? If you wait three to five years, you're going to be a follower. If you jump in now, be a disruptor and pretty much, I mean the next three to five years are going to be very exciting because we're not looking back. Okay. After these things get done and we're literally following every single regulation there is to make sure that done properly. And we're not calling our Tokens, anything but security tokens because that's what they are. And I mean is going to be a new age because we're democratizing and we're saying, hey, instead of having all the wealth reserved for the already wealthy, why not give access to the accredited investors and small family office to join in and participate in the same type of structures that are currently reserved for the billionaires. And I think that that's one of the biggest takes that I take from what we have done. A lot of other fantastic firms out there that have put in their piece of their grain of sand into what we're doing. I can tell you the next five years, our dream is to in five to 10 years have this group of either companies because we know that there are a lot of other companies that are going to borrow this.

Yes, absolutely.

We're looking to be similar to NASDAQ pretty much where we're going to have trillions and trillions of dollars that will go through this industry, this brand new industry that is coming into play now that levels the playing field and says, hey, not anymore. What was done yesterday is not what the future holds. And there's a lot of problems that we resolve also. It's not only the technological advances. If you look at the securities market and the secondary commercial mortgage backed securities market, it has a huge liquidity problem.

Yeah, absolutely. That's what excites me the most about this. Yeah, it's phenomenal. It's phenomenal because even in our deals, you invest 100,000, it's locked up for three to seven years. If you're able to trade that in real time, I think it's just phenomenal and I'm really excited to see where this goes. Edward, if the audience wants to stay in touch with you to follow along, we're going to stay in touch. We're going to follow your story and probably have you back on here on the show to get some updates. But what's the best way for people to find out about BPN Capital? Find out more.

Yeah, they could go to our website, www.pncapital.IO. they could also visit us on Twitter, EPro Network, LinkedIn Capital. And again, I mean we're here to help and we have shown that through history of our firm. We have had a lot of other groups that are trying to do similar things to what we're doing. We have welcomed them with open and say, hey, yes, we're here to help and we're willing to collaborate. And again, even banks, I mean I have had banks Reach out and top executives. And we told them, hey, we're not saying banks are going to go away. Okay?

Right.

We're saying, I'll give you an example on that structure I gave you that we're doing a 20% capital raise. We're doing a hybrid with one of the banks in the US because they definitely understand what we're doing. And we said to them, you're welcome to participate. And when they got what we were doing, this is a deal that they will be willing to pledge 65% of the money to build this project. And we said, we don't need 65%. With 50% we can still give you first lien position on this prop project.

And they like that because their LTV is lower.

Yeah, lower ltv. That means their money's worth more. You see, they get first lean position and they're literally coming in at 50 cents on the dollar instead of 65 cents on the dollar on a 665 million dollar project.

Nice.

So I mean for him is like, thank you, keep it, keep it coming. You know, and yeah, and we were very happy to get to get that type of financial institution to come into play because at the end of the day it's like we told them we can help you do more with the capital you already have. That's what we're doing means you could do more with the same capital you already have thanks to this structure that would allow the guys that were not typically able to do this to do it. And now you have a huge advantage where you're saying, I mean 15 cents less on the dollar in this premium projects.

If you're an investor, if you get to do five deals instead of one, you get to diversify, you get to participate in more opportunities. It really seems to be a win win for all the parties involved. Edward, again, man, I love your story. Starting with hot dog stands at age 11, all the way up to today, pioneering bitcoin mining as well as this new, this new use of the blockchain chain technology. If you could go back to your 25 year old self and give yourself a piece of advice, what would it be?

I will tell myself to listen more. Yes, definitely. I will go back and tell myself.

You might have not got that job though about telling the guy what you didn't want to hear.

Well, not in the sense, no, not in the sense of listening more, agreeing with people, but in the sense of listening more when it came to. Because again, I have, I'm a very lucky person. I have had a lot of great mentors. And some of them gave me great advice that I came only to later on and throughout when I. Through maturity and through time, I seen that. Gosh, I mean, if I'm not complaining, I just think that if I could go back and tell myself, hey, diversify more. Hey, open. Because when I get focused into something I regularly. I don't know if you've seen horses, they put blinders on their sides. Yeah, I can see to the other side. I'm laser focused. I want to see what I'm doing through and. And that's my main thing. And I think that if I could. If there is anything I could change.

Yeah, that's great advice. Again, I think if you ask myself a lot of people having phenomenal mentors, but I would say the same thing. I had some people give me advice. I go back, I'm like, oh, if I only listened a little bit more to that, that would have been great. Edward, it's been a blast having you on. Thank you so much for sharing your story, this amazing opportunity that we're about to face, and I look forward to staying in touch and have you on again.

Fantastic. Thank you for having me. Gladly. Appreciate it. And hopefully we get to do this again.

Absolutely. Hey, Chris, here again. I hope you found this episode valuable. Now, I have one more gift for you. If you haven't gotten my book Next Level Income yet and would like me to send it to you in the mail for free, then go to nextlevelincome.com and click on the book tab. If you fill out the form on that page, I will send you a copy of my book and cover all the shipping costs as a thank you for being a podcast listener. Also, please, like, share and take 90 seconds to give us a rating on Apple Podcast.