Buying RE with Bitcoin
Denver, CO · Member since 2016 · 114 posts · 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?
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’m 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..
Interesting thread, although I think you just set up a straw-man argument with the statement about the internet in 1995. The internet was a viable platform back in the '90s. The internet companies that failed, failed because they didn't have a viable product or service, not because of the underlying technology of the internet. BC is not a currency being used by the masses for any reason.
Like I said earlier, I remember bitcoin when it first came out & it was still in the single digits per bitcoin. I could of mined it. I doubt most people even know that at one time, you could of "created" your own bitcoins & litecoins out of computing power magic. The novelty of bitcoin for non-criminals, was finding places that accepted bitcoin to spend. Bitcoin was also & still is the wild west in regards to it's use in the darkweb, the INSECURITY of storing your bitcoins, etc. Now they have exchanges, which are still not as secure as they are advertised to be by the operators. They are still insecure to those of us who know what they are doing & have a desire to steal bitcoins. I still remember an article about a guy who threw out some old hard drives, which unfortunately had his bitcoin wallet on them. At that time bitcoin was still in the $200-$500 range, and he had over a $1M in bitcoins on them. He was an early adapter and mined his coins.
Unlike bitcoin or other cryptocurrencies, we know where gold is stored. Once an exchange or your wallet is hacked, which has and still is happening, you are out of luck.
BC is still not a true investment, in that there is no underlying asset. Unless you count "hope it goes up" as an asset. I mean why is it today $16K vs several years ago when it was $500? What in the "real" world has driven the value up? Block chain is truly the investment. It's not a smoke & mirrors concept. It's straight up math & technology. Various industries are now starting to utilize it for true real world services. IMO, the "pipe dream" of BC is definitely driving the creation of all these other crypto currencies. With all of these crypto-currencies, which one is going to 1)be accepted by the world-wide banking industry, 2)be accepted by the regular man on the street that wants to buy some gas at a gas station, groceries, clothes, etc. At the price point now, BC can only be "used" for big ticket items & that if it is accepted. Sure you can cash out, but what happens when a bubble is determined, like the housing & stock markets, it's value will crash and crash hard. If it is not accepted by the banking industry, it won't rebound to where it was. Parts of this country haven't rebounded from the real estate market crash.
I do wish I had spent more time setting up my lab to mine both BC & LC. Who knows, I definitely would of been a crypto multi, multi millionaire, but I doubt it b/c I'm sure I would of cashed out at some point before it headed north of several hundred dollars
Fair points. I'm not trying to convince anyone to buy or not buy bitcoin I'm just stating MY investment thesis. If you are confident in yours why don't you put your money on it and short it? Bitcoin futures are now trading on CBOE.
I do think some of your points are outdated though. No one (aside from ideologues) seriously considers bitcoin a currency anymore, and there are secure ways to store your bitcoin using hardware wallets but it's tough to convince normal people to do it which I think will hamper it's adoption. And as far as the darkweb you do realize every transaction is recorded on the public blockchain right? Here is one of mine, I can't hide if I wanted to anyone with a browser can look: https://blockchain.info/tx/4705d24ddac8f5fa4c82170...
Any time any one wants to spend bitcoin on anything he basically needs to announce it to the entire world...
So anyone who uses bitcoin for illegal purposes is not the sharpest tool in the shed. =) It's literally the most transparent and traceable transaction medium mankind has ever seen lol
It’s funny you should ask. I saw a condo for sale in the Miami market today, and the seller will *only* accept bitcoin for payment.
Yeah I've seen residential properties but I'm really looking to use leverage and not just straight up pay in bitcoin.
I read a WSJ article about this.
Personally I have no interest in bitcoin. My main reasoning:
Money is often defined in terms of the three functions or services that it provides.Money serves as a medium of exchange, as a store of value, and as a unit of account. Medium of exchange. Money's most important function is as a medium of exchange to facilitate transactions.
For none of these 3 things does Bitcoin pass the sniff test - some might say it might be in the future - I don't buy it.
I'm selling the stuff. The other thing that creeps me out is the anarchic bent of many of the evangelizers. In some circles you will be ostracized/labeled any number of bad things by saying anything bad about bitcoin.
Bitcoin literally does all three things you are describing. The only reason that it can't really be used as currency right now are the fees are too high because it's running into scaling issues, and the volatility is preventing anyone from trusting it as a day to day currency. Both of these have very smart people working on it so I'm still bullish. But even if it never supplants money I think it will certainly supplant gold and silver as a store of value, and do it very soon.
I do think some of your points are outdated though. No one (aside from ideologues) seriously considers bitcoin a currency anymore, and there are secure ways to store your bitcoin using hardware wallets but it's tough to convince normal people to do it which I think will hamper it's adoption. And as far as the darkweb you do realize every transaction is recorded on the public blockchain right? Here is one of mine, I can't hide if I wanted to anyone with a browser can look: https://blockchain.info/tx/4705d24ddac8f5fa4c82170...
Any time any one wants to spend bitcoin on anything he basically needs to announce it to the entire world...
So anyone who uses bitcoin for illegal purposes is not the sharpest tool in the shed. =) It's literally the most transparent and traceable transaction medium mankind has ever seen lol
The transaction can be traced, but not the person. That's what makes it popular in the underground & one of the reasons why the banks don't accept it. Granted, once I know you as an individual are tied to a transaction, then I can see what you have done in the past and any future transactions. But I first have to positively identify the person with a certain transaction. The block chain being public is irrelevant, if I can't do that.
BTW, hardware wallets are insecure as well, just a little bit harder to crack into than the software based ones. Mainly because the opportunity to break into it, should not be available as much, as a software wallet.
FYI, my day job "might be" focused around LEGALLY breaking into things out on the interwebs.
@Jerry Shen I apologize if this is a repeat of info or if it constitutes an "application" that you don't trust, but your thread prompted me to locate Propy.com, whose website says "Propy allows buyers, sellers, brokers, and escrow/title agents/notaries to come together through the utilization of a suite of smart contracts on blockchain to facilitate transactions." I have no stake in anything crypto, thus appreciate the interesting thread and feedback from all.
I do not trust smart contracts at this point. Impossible to tell which are scams and which are real and which have idiots writing the code.
I do think some of your points are outdated though. No one (aside from ideologues) seriously considers bitcoin a currency anymore, and there are secure ways to store your bitcoin using hardware wallets but it's tough to convince normal people to do it which I think will hamper it's adoption. And as far as the darkweb you do realize every transaction is recorded on the public blockchain right? Here is one of mine, I can't hide if I wanted to anyone with a browser can look: https://blockchain.info/tx/4705d24ddac8f5fa4c82170...
Any time any one wants to spend bitcoin on anything he basically needs to announce it to the entire world...
So anyone who uses bitcoin for illegal purposes is not the sharpest tool in the shed. =) It's literally the most transparent and traceable transaction medium mankind has ever seen lol
The transaction can be traced, but not the person. That's what makes it popular in the underground & one of the reasons why the banks don't accept it. Granted, once I know you as an individual are tied to a transaction, then I can see what you have done in the past and any future transactions. But I first have to positively identify the person with a certain transaction. The block chain being public is irrelevant, if I can't do that.
BTW, hardware wallets are insecure as well, just a little bit harder to crack into than the software based ones. Mainly because the opportunity to break into it, should not be available as much, as a software wallet.
FYI, my day job "might be" focused around LEGALLY breaking into things out on the interwebs.
But any time you want to convert that crypto into fiat you have to go through an exchange. And all exchanges have to comply with the same KYC laws that any financial institution does (you should know that based on your day job). So yeah, if you ONLY transact in crypto you can stay anonymous but as you yourself said crypto is NOT a valid currency which I completely agree with.
My take on it is: liquidity and volatility are polar opposites. And crypto is incredibly volatile. The whole ecosystem (and trades) is valued at hundreds of billions, but most participants bought in at well below 1/10000th of current prices. The current trading volume is mostly one crypto sloshing into another crypto, not billions of fiat flowing in and out per day.
Like @Jerry Shen we too have a crypto position that's a much larger portion of our liquid funds than we feel comfortable with due to recent run-up. Re-balancing is not an option, it's mandatory. Trying to cash it out has been challenging -- exchanges go down at inopportune times, and Coinbase's limits mean you can only cash out 780,000 a year -- and that's if you time selling precisely when your limit reaches maximum.
There is a huge exchange risk. To put it mildly -- to purchase RE with crypto means shifting the exchange risk to the seller. Like MtGox, an exchange could be robbed and freeze assets at any moment. Holding coins there for any amount of time is risky.
Even settling in dollars the title company and bank would have to trust the exchange holding the funds as collateral won't pull a MtGox. You could ask them to just monitor your wallet to ensure sufficient funds, but then they'd have to trust your security policy and procedures are at least as good as the exchanges.
The ecosystem has much maturing to do before you'll be able to do what you want easily, IMO.
p.s. I'd appreciate any heads up on safely cashing out if you have pointers.
p.p.s. ours are mined, total investment roughly $0
p.p.p.s. About 20 bitcoins stolen by MtGox.
All I know is that bitcoin has been , just have to look at Steve Babiak, J. Martin, and my posts (and others) from 6 to 8 years ago. It is, and has always been, quite a commodity.
And, yes, if you exchanged through Mt. Gox you lost 100%. I will not disclose my numbers.
With blockchain, every transaction is recorded (e.g. see my ), hence why governments like buying the currency... for law enforcement purposes. Between lost (or forgotten) coin and government buying, I'd say the total float is too low to ever make BC a widespread 'currency'. But, it's quite a commodity!
And people who claim $0 investment must not have an electric bill like mine was. Between graphics cards and utility bills, hard to claim $0 for anyone I knew doing it.
All I know is that bitcoin has been , just have to look at Steve Babiak, J. Martin, and my posts (and others) from 6 to 8 years ago. It is, and has always been, quite a commodity.
And, yes, if you exchanged through Mt. Gox you lost 100%. I will not disclose my numbers.
With blockchain, every transaction is recorded, hence why governments like buying the currency... for law enforcement purposes. Between lost (or forgotten) coin and government buying, I'd say the total float is too low to ever make BC a widespread 'currency'. But, it's quite a commodity!
And people who claim $0 investment must not have an electric bill like mine was. Between graphics cards and utility bills, hard to claim $0 for anyone I knew doing it.
Is litecoin more currency like?
Matt R. LTC isn’t accepted widely enough if it ever gets to bitcoin scale we will ser
Right on, off topic I know, the offline storage wallets is that something that most bitcoiners likely need?
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’m 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.
just sell the bitcoins 0.5 bitcoins at a time every 30 minutes bro
I don't think US based banks are allowed to accept any foreign currency as is (deposits, payment). It must be formally exchanged to USD first. One would also pay 10% ish fee to convert foreign currency to USD. I think that helps cover the possible fluctuations.
Maybe one day they will convert bitcoin maybe at even higher fees 15-20%,25%? I guess that is partly why bitcoin exist, to eliminate those cross border fees.
Some abstract things to think about:
When the cost of mining and transacting bitcoin surpasses its value...it’s over. All those expensive setups will go down.
It’s not regulated by government, which is a good and very bad thing. The top “very few” own the top “very high” percent of bitcoin. So instead of the market in the hands of the govnt (who is slowly devaluing he dollar), it’s in he hands of a few people, who can make this market as volatile as they want. When one sells, you can bet that the rest will sell.
Amazon and no other large retailer wants to hold bitcoin because they’ll hold a large chunk of the market
1) There is a difficulty algorithm built into bitcoin so this scenario is impossible. Even after every bitcoin has been mined (in 2140) miners will still get transaction fees. The economic incentives to run bitcoin nodes are self-stabilizing.
2) Which government? Almost every developed nation has bitcoin regulations. It's impossible to regulate bitcoin itself but you can regulate at the exchanges when you convert to local currency. As far as the top few owning the majority of bitcoin, this is no more true than the top few in the world owning a high percentage of wealth. A lot of the analysis I've seen on this fails to point out that a lot of bitcoin addresses with a ton of bitcoin are actually owned by exchanges where they could potentially be shared among thousands of people. Volatility is also a function of total market size. On a percentage basis it has gotten way less volatile as it's gotten bigger, and the introduction of bitcoin futures has also significantly reduced its volatility
3) No retailers don't want to take bitcoin because no one will pay a $25 confirmation fee to buy $25 worth of stuff on amazon.
2) Which government? Almost every developed nation has bitcoin regulations. It's impossible to regulate bitcoin itself but you can regulate at the exchanges when you convert to local currency. As far as the top few owning the majority of bitcoin, this is no more true than the top few in the world owning a high percentage of wealth. A lot of the analysis I've seen on this fails to point out that a lot of bitcoin addresses with a ton of bitcoin are actually owned by exchanges where they could potentially be shared among thousands of people. Volatility is also a function of total market size. On a percentage basis it has gotten way less volatile as it's gotten bigger, and the introduction of bitcoin futures has also significantly reduced its volatility
3) No retailers don't want to take bitcoin because no one will pay a $25 confirmation fee to buy $25 worth of stuff on amazon.
I'm talking about the electricity costs of mining and transactions. If there is no change (in the efficiency of algorithms, or upgrade of hardware/tech), all these miners keeping bitcoin alive will pull out because it will cost too much to run. In the long run it will stabilize, but energy cost to reward gap is getting closer, faster.
Good point about controlling the exchange rate, I'll look more into that
If by wealth you mean cash reserves, this is regulated by government. These top cash reserve holders can not greatly change, by any means, the value of the dollar.
Bitcoin looks more volatile than ever IMO.
Ya...And also it'll take 2 days for a transaction 😂