All Forum Posts by: Gabriel Tapang

@Bill Brandt

Truths. In this case, the crypto was gifted to me back in 2017 but it was 'seasoned' long enough

I just received the clear to close today! Signing for the property this Friday 8/13

For all you crypto investors wanting to convert and buy property, Cross Country Mortgage is one of the few lenders out there that will accept crypto converted to USD but be forewarned - they will need to source the funds

I thought this article from chartr.co was interesting as it shows Zillow has bought more homes last quarter than it has in the history of its home flipping side hustle. I didn't even know Zillow flipped homes. Apparently, they are averaging $20k profit per flip. Not sure if this is a good or bad thing for smaller investors. If you have the 'abundance mentality' there's plenty of deals to go around for everyone and good for them - a billion dollar company like Zillow getting into the flipping business reassures us that the current market is ripe with deals. Otherwise, this is a pretty big competitor!

In terms of volatility, if you look at historical charts of both the Prime rate and 1-year treasury rates, they look almost identical with the Prime rate consistently higher than the 1-year treasury rate. My HELOC at my local credit union charges Prime rate +1.25 so it is currently at 4.5% I would say the pros of a HELOC are being able to keep a cash flowing property without having to sell and leveraging the equity to buy more cash flowing assets. The cons are fluctuating interest rates and the possibility of losing the leveraged property if you are over-leveraged and find yourself unable to make the payments.

DETAILS:

3 bed, 1 Bath, 1,345 Sq Ft
Seller-Financed @ 0% interest
ARV: $125,000
Price: $ 4,750
Monthly Payment: $177
Repair estimate: $50k
Down: $0
Market Rent: $975
Assignment Fee: $9,800

Photos:

I'm calculating this as 14.84% ROI, am I right ($9,576 / $64,550)? If the market rent of $975/month is accurate, then $975 - $177 = $798 monthly cash flow. If you had $64,550 cash on hand, would you purchase this, assuming the numbers are accurate, without a team onsite if this is out-of-state? What about if you had a good PM in the area? Seems like there is plenty of equity in it, but I'd imagine you would have to do your due diligence of the area (i.e. employers in the area, Class A/B/C neighborhood, population trends, etc.) before making a decision.
Would you guys buy this? Under what conditions would you go for it (or not)? Thanks!

@Greg Scott I definitely agree that cash is King and completed the cashing out step and showed proof of funds in my checking account. I guess since it is Crypto they want to properly source the funds, so I'm having to show that I am owner of the account the funds came from. I received an update this morning that it is with underwriting and will provide an update on what happens.....

The lender I am currently working with for an out-of-state investment property has told me they have just recently started accepting crypto but only if the following guidelines are met:

1.  For the proceeds from a bitcoin or other digital currency exchange to be considered as an eligible asset, it must be converted to U.S. currency and deposited into an eligible asset account. All assets must be verified.

2.  The source of a large deposit may be from bitcoins or another digital currency, provided there is documentation to show the funds coming from the digital currency account that was owned by the borrower.

I am having issues with #2 because my personal digital wallet is not tied to my name, like most financial accounts - it is tied to a 42-character alphanumeric sequence. They are not accepting screenshots unless it shows a URL with my name showing on the account. It's already been 4 weeks past initial closing date because I have been going back and forth with the underwriter for clear to close and they are charging me $200+ per week to keep the rate locked at 4% :(

Has anyone had any luck using crypto to pay part/all of their downpayment with a lender? How were you able to do it? Thanks!

My understanding is comps are generally used for residential real estate, while the income generating potential of commercial property is what determines the value. I think you are on the right track with the cap rate:

cap rate = NOI / property value

so you should be able to price those turnkey 3-4 year old multi family  properties to sellers if you know the cap rate of similar buildings in the area and what they are bringing in for rents