Buying RE with Bitcoin

Creative Real Estate Financing
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Buying RE with Bitcoin

Jerry Shen
Denver, CO 路 Member since 2016 路 114 posts 路 99 votes

I've got some bitcoins that I would like to use to purchase real estate. Are there any institutions that will accept bitcoin as downpayment for a loan? 

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Chinmay J.
Investor 路 Northern, VA 路 Member since 2016 路 1k+ posts 路 904 votes
8y
Originally posted by @Jerry Shen:
Originally posted by @Chinmay J.:
Originally posted by @Jerry Shen:
Originally posted by @Daria B.:
Originally posted by @Jerry Shen:

I've got some bitcoins that I would like to use to purchase real estate. Are there any institutions that will accept bitcoin as downpayment for a loan? 

 Admittedly I鈥檓 not up on the new craz...what is bitcoin?

It's a decentralized digital currency. Basically a way to transact and store value without any middlemen (banks, governments, etc). It's been on a tear this year (my initial investment grew 2000% in 8 months) so I'm looking to cash some of it out into RE but I would rather pay in bitcoin directly than cash out to dollars because cashing out large amounts of bitcoin can move the markets (if I sold $1M of bitcoin I would get a lot less because the entire market would see my sell order and it would drive the price down) than if I just used it directly in a transaction.

Good luck explaining that to a seller and the Title Company. I completely understand, but most people are clueless as to what you are saying..  There are still people out there who only deal with cash, and are queasy about using credit or debit card to make purchases. 

Why not liquidate your investment in small chunks, and wait for market to adjust rather than in one lump sump of $1MM.  May require some patience, but trust me, this stuff is not easy for some people to follow... 

My issue with that is I would have to liquidate before I would like to. A lot of deals fall through in due diligence and if I have to liquidate early I could lose out on significant gains. For example, even if I liquidated by bitcoin just a month ago, it would have lost 50% of its value.

I understand this is not easy, but this is the creative financing forum so trying to think creatively here =)

I'm afraid you are assuming that Bitcoins is not going to crash tomorrow, right? lol..  

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  • Jordan MoorheadBusiness Member
    Real Estate Agent 路 Austin, TX 路 Member since 2015 路 5k+ posts 路 3k+ votes
    8y
    Jerry Shen maybe you could do a seller finance deal and get the seller to accept bitcoin as a down payment?
    [email protected]512-888-9122
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    2Reply
  • Jameson Sullivan
    Real Estate Broker 路 Tacoma, WA 路 Member since 2016 路 545 posts 路 252 votes
    8y

    @Jerry ShenThis would be interesting. I wonder if you could find someone or an institution that is bullish on bitcoin also that would loan you 3MM for the purchase of the building with 1MM of it being "traded" across for your bitcoin and the remaining 2MM being collateralized by the property. Is there a way to stick the BC in some kind of escrow that is controlled by the lending institution so they can continue to cash in on appreciation and then they can cash it in at a later date rather than you doing it today? That way you get your cash and they could potentially see huge increases on their Bitcoin?

    All that said, I don't think cashing out 1MM would move a 300BN market so significantly that youd lose your shirt. But I'm not the one with 1MM in Bitcoin so don't ask me :D

    0Reply
  • Jeremy Climie
    Investor 路 Hobart, Tasmania 路 Member since 2014 路 14 posts 路 10 votes
    8y

    @Jerry Shen If you don't want to have to sell your Bitcoin, check out Salt lending. They are going to do crypto backed lending.

    https://coinmarketcap.com/currencies/salt/

    I don't know heaps about them, and I don't think they're actually lending yet but from memory they were aiming to be there in the first quarter of 2018 or so. Anyway, might be worth a look if you want to try to get the best of both worlds. 

    1Reply
  • Jeremy Climie
    Investor 路 Hobart, Tasmania 路 Member since 2014 路 14 posts 路 10 votes
    8y

    By the way, if you do look into it and it works out for you, please let me know how it goes.

    0Reply
  • Drew FeinPro Member
    Attorney 路 Denver, CO 路 Member since 2015 路 208 posts 路 104 votes
    8y

    @Jerry Shen, I'm interested to hear what you discover.  If you're looking to expand into the Miami residential market, you could always purchase this condo with your BTC.  My funds are mostly in ETH, so I guess I'm out of the running.  :) 

    1Reply
  • Chris Gordon
    Rental Property Investor 路 Venetia, PA 路 Member since 2015 路 107 posts 路 47 votes
    8y

    so you have a store of value that will decrease in value if you liquidate it? You want me to give you real estate in exchange?

    0Reply
  • Jeremy Scherer
    Lender 路 Hudsonville, MI 路 Member since 2015 路 35 posts 路 28 votes
    8y
    As stated earlier, no chance 1M is going to move a 500B market. What I didn鈥檛 see stated here was the fact that Craigslist now gives people posting the option to take cryptocurrency as a form of payment. I would start there if you are really looking to pay only in Bitcoin. For all of the crypto haters out there - most people investing in crypto now know that it is similar to the tech/internet bubble, but it would be nice to catch the next Google or Apple. All 1300 aren鈥檛 going to stay forever, but I promise you a few are going to stick and change the landscape.
    3Reply
  • Edwine Alphonse
    Investor 路 Milton, MA 路 Member since 2017 路 21 posts 路 6 votes
    8y
    You can sell your bitcoins and get fair value to some large crypto traders like Circle. They have a Trading desk able to handle large transactions like that.
    0Reply
  • Eric Ciesielski
    Decatur, GA 路 Member since 2015 路 14 posts 路 0 votes
    8y
    just cash it out to USD via coinbase or Gemini
    0Reply
  • Roger S.
    Investor 路 TX 路 Member since 2015 路 393 posts 路 290 votes
    8y

    @Jerry Shen.  A million dollar sell order wouldn't move the price much at all.  There are multiple billions of dollars traded every day.

    0Reply
  • Roger S.
    Investor 路 TX 路 Member since 2015 路 393 posts 路 290 votes
    8y

    What's the difference if bitcoin goes up before you buy the house or after?  You still missed the run up.

    1Reply
  • Brent Coombs
    Investor 路 Cleveland, OH 路 Member since 2015 路 6k+ posts 路 2k+ votes
    8y
    Originally posted by @Jerry Shen:
    Originally posted by @Andrew Ware:

    Sorry my post was muddled. My point was that a bank is going to want stable currency to do a deal that will take a month.

     Sorry I'm not sure I quite understand your point. I'm not looking to settle the amount on bitcoin, I'm looking to settle on dollars. No different than if I had euros and on closing just sent them to the bank at whatever the prevailing exchange rate was and the bank can just exchange to USD.

    I think the point being made by Andrew is that, say you put 20% bitcoin deposit down using today's bitcoin price, but by the time you come to close, it's gone down 25% (meaning you've really only given them 15% deposit, unless they converted it straight away) - they'd be very irate if you then said, but I don't have the other 5% deposit that I still now owe!

    So, unless the Seller is equally inclined to speculate (including the idea of accepting that same 20% deposit using say, a specific sized bar of gold at today's price), it's no surprise that most Sellers still like "stable currency", right?

    0Reply
  • Account Closed
    Earth 路 Member since 2017 路 297 posts 路 187 votes
    8y
    If you are very bullish on bitcoin and don鈥檛 want to miss the up run, don鈥檛 buy any real estate. It is impossible for Real estate price to go up 1000% in a year. Compare to bitcoin, real estate appreciation is too slow and a lot side work. Keep all your bitcoin if you are very bullish on it. If you are uncertain, sell the bitcoin today while it is still a good price, $17k a piece. P.S. I鈥檓 bearish on bitcoin, so I would not touch it.
    1Reply
  • Jerry Shen
    OP
    Denver, CO 路 Member since 2016 路 114 posts 路 99 votes
    8y
    I already invest in real estate I have an office and a mall. Thanks for everyone鈥檚 suggestions I guess I am a bit ahead of the times. And just to state again I am aware that selling 1M in bitcoin won鈥檛 move the market I just used that as a hypothetical number I don鈥檛 want to reveal how much I am selling but it鈥檚 much more than that. And just to clarify I am not looking to settle in bitcoin so the volatility of BTC/USD is not an issue I would pay whatever BTC is required to get to the USD value at close.
    3Reply
  • Ryan Garoogian
    Investor 路 Tulare, CA 路 Member since 2014 路 34 posts 路 23 votes
    8y
    Originally posted by @Jerry Shen:

    I already invest in real estate I have an office and a mall.

    Thanks for everyone鈥檚 suggestions I guess I am a bit ahead of the times.

    And just to state again I am aware that selling 1M in bitcoin won鈥檛 move the market I just used that as a hypothetical number I don鈥檛 want to reveal how much I am selling but it鈥檚 much more than that.

    And just to clarify I am not looking to settle in bitcoin so the volatility of BTC/USD is not an issue I would pay whatever BTC is required to get to the USD value at close.

    Jerry I get your predicament in using your Bitcoins as collateral as I am also of the same mindset that I would rather hold onto my Bitcoins until the last minute and then transfer them to USD to make a transaction occur as I am bullish on Bitcoin. I feel as though it is still very early times for Bitcoin and you won't find many if any lending institutions that will recognize Bitcoin in that way. I do hope that people begin to become more familiar with the technology and what it can do for transacting and validating by the means of the blockchain.

    0Reply
  • Account Closed
    Investor 路 Princeton, TX 路 Member since 2014 路 1k+ posts 路 1k+ votes
    8y

    @Jerry Shen  How much money was made last year by ransomware attacks?  How much of it was paid in bitcoin?  Why did the criminals use bitcoin?

    http://www.newsweek.com/russian-using-bitcoin-laun...

    Unlike what you said... money laundering with bitcoin is a huge problem.

    0Reply
  • Jerry Shen
    OP
    Denver, CO 路 Member since 2016 路 114 posts 路 99 votes
    8y
    @michael Diggs What does ransomware have to do with money laundering? Either way there is far more cash used for both purposes than cryptocurrency do you think the government hates cash?
    0Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer 路 Redding, CA 路 Member since 2009 路 7k+ posts 路 4k+ votes
    8y

    @Jerry Shen why when bitcoins doing so well for you do you want to buy real estate? What type of real estate are you looking for, and where? It seems like there should be sellers that would be willing to take their equity or at least a portion of it in trade for bitcoin. Is it possible to transfer Bitcoin to someone else, or does it need to be liquidated? What was your initial investment into bitcoin (if you don't mind sharing, and how long were you invested?) There's been some posts recently discussing the issue, so I'm curious. 

    0Reply
  • Matt R.
    Sherman Oaks, CA 路 Member since 2013 路 3k+ posts 路 2k+ votes
    8y

     The guy in the article was running an exchange, sort of like a bank, and he was also connected to another earlier huge exchange scam. That was his expertise. Money laundering happens, cash or coins and yes much more(99.5%) is done in regular cash seeing that these coins represent .05% of currency. To lump in bitcoin as cause for that would be the same as lumping in the average bank customers cash deposit when certain banks launder money. False equivalency is probably the case for either situation.  

    Just wait til some of these billion dollar ponzi schemes brewing in crypto pop...should be very soon. When those get public news attention, it will look real bad but again would not be a fair representation for the coins in any significant percentage. I am sure the press will hype it up though and these identical ponzi schemes run in just cash all the time too. 

    My point is cash has no exclusivity on being legally clean and far from it. Coins will also have it's criminals just like all other currencies do. The good news for crypto is even criminals think it has value now馃榾. 

    0Reply
  • Brent Coombs
    Investor 路 Cleveland, OH 路 Member since 2015 路 6k+ posts 路 2k+ votes
    8y
    Originally posted by @Account Closed:

    Jerry want to reiterate what the Tasmanian said about salt lending.

    Also LOL wrt the ransomware how many of them wanted the end user to go to the store and buy moneypaks and use those?

    I give up: What did the Tasmanian say about SALT lending?...

    0Reply
  • Brent Coombs
    Investor 路 Cleveland, OH 路 Member since 2015 路 6k+ posts 路 2k+ votes
    8y

    Yeah, but of course, it's the general ignorance that most people still have about bitcoin (despite, or because of, the media's recent attention to it), that will allow its price to do what it will do!

    0Reply
  • Brent Coombs
    Investor 路 Cleveland, OH 路 Member since 2015 路 6k+ posts 路 2k+ votes
    8y
    Originally posted by @Account Closed:

    @Brent Coombs

    Yeah try to explain crypto to most boomers and you either get dog head cocked to the side confusion or irrational anger.

    Salt Lending uses your crypto as collateral for loans.  This is how OP gets to hold his BTC and realize whatever gainz are left in it (It's got to retrace soon this looks toppy at least short term to me) while getting his cash down payment for a real estate.

    I'm just wondering why your earlier "Tasmanian" response to Jerry seemed so sarcastic, is all...

    0Reply
  • Account Closed
    Investor 路 Princeton, TX 路 Member since 2014 路 1k+ posts 路 1k+ votes
    8y

    Well... I agree with JP Morgan Chase.  Bitcoin is a fraud and it will collapse.  Of course they can spend a few billion dollars shorting it which will not exactly help prop it up.  LOL

    https://www.marketwatch.com/story/dimon-calls-bitcoin-a-fraud-and-may-have-delivered-the-biggest-blow-to-the-digital-currency-2017-09-12

    0Reply
  • Brent Coombs
    Investor 路 Cleveland, OH 路 Member since 2015 路 6k+ posts 路 2k+ votes
    8y
    Originally posted by @Account Closed:

    Well... I agree with JP Morgan Chase.  Bitcoin is a fraud and it will collapse.  Of course they can spend a few billion dollars shorting it which will not exactly help prop it up.  LOL

    https://www.marketwatch.com/story/dimon-calls-bitcoin-a-fraud-and-may-have-delivered-the-biggest-blow-to-the-digital-currency-2017-09-12

    Whereas, your "Salt Lending (google it yourself) uses your crypto as collateral for loans. This is how OP gets to hold his BTC and realize whatever gains are left in it (It's got to retrace soon this looks toppy at least short term to me) while getting his cash down payment for a real estate" comment to me, was actually a (perhaps unintentionally?) useful reply! [I had looked it up]...

    0Reply
  • Account Closed
    Investor 路 Princeton, TX 路 Member since 2014 路 1k+ posts 路 1k+ votes
    8y

    @Brent Coombs  I am not sure if they have met the benchmark of actually making loans yet.  Their website looks like that is the plan.  Of course they are also trying to "launch loan fund".  I wonder how many people with money are lining up to take bitcoin as collateral when most experts are saying bubble.

    Anyone offering credit default swaps on loans backed by cryptocurrencies?

    How many people will use the loans to buy more cryptocurrency?

    I also love this video.

    https://www.youtube.com/watch?v=T8-85cZRI9o

    0Reply
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