1 min read
Sources:
Kevin's account, Form 1-A
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Short answer
Permanent capital is money the company never has to give back on a schedule: common stock, and preferred that converts to common in 2029, as opposed to a fund investors can redeem. Invisible equity is the gain created when the company buys a property below market: accounting carries the building at cost, so the gain never appears on the balance sheet or as revenue until the property sells, and it is not taxed until then. Kevin models both on Berkshire Hathaway. The flip side is that nobody outside the company can see or verify the cushion. 12
Permanent capital: Stock, not units (no redemptions, no fund term)
Invisible equity: Not on the books (below-market purchases carried at cost)
Tax on it: None until sale
Verifiable?: Not yet (no portfolio appraisal published)
Permanent capital
Kevin’s account
I want to attract and invest permanent capital like Warren Buffett. 1
The mechanism is ordinary corporate stock. Common shareholders have no right to redeem. The preferred pays 7% for a defined period and then becomes common in 2029. The bonds pay 5% and convert. By 2030, on the company’s plan, none of its capital carries a coupon or a maturity, which is the clean cap table page. A fund with redemption rights must keep cash or sell assets when investors leave; a company with permanent capital can hold.
Invisible equity
Kevin’s account
When Reinvest has equity gains from acquiring real estate, they do not get marked to market, an invisible safety cushion, and no taxes are owed on those gains. 1
GAAP records a purchase at cost. If the company buys a $100 building for $80 and improves it, the balance sheet shows roughly $80 plus improvements, less depreciation, forever, until sale. The $20 is never revenue, never income, never a line item. It is why the filed book value of the portfolio, $63.1 million, and Kevin’s market estimate, $85 million, can both be sincere.
The limit
The cushion is invisible to investors too. The offering circular says management believes market value may exceed carrying value; it does not publish an appraisal of the whole portfolio, and only a sale converts a belief into a number. Two individual appraisals exist, for properties bought from Kevin and an affiliate, and both exceeded the price paid. Treat the cushion as the company’s claim, supported by its method and its two data points, and watch the sales. 2
Money that stays, and gains that hide. Both are real features of the structure, and neither shows up in a filing until a sale. 12
Simply put
✅ Permanent capital
➡️ A fund has to give money back when investors ask. Reinvest does not; you own shares.
➡️ That lets it hold buildings through a downturn instead of selling into one.
✅ Invisible equity
➡️ Buy a $100 house for $80 and the books say $80.
➡️ The $20 is real if the price is real, but no report will show it until the house sells.
➡️ No tax on it until then either.
✅ The catch
➡️ You are trusting the company that the $20 exists. Only sales prove it.
Sources
Kevin's account, The thesis: “When Reinvest has equity gains from acquiring real estate, they don't get marked to market, an invisible safety cushion, and no taxes are owed on those gains.” Read the excerpt
Form 1-A, Business; Risk Factors (no public market; management believes market value may exceed carrying value; no portfolio appraisal) Open the filing
