Gold, Silver and Crypto Assets, you and your bank

in #gold7 years ago

I thought I would share this experience I recently had with my bank here in Canada. I buy rental properties and I also hold gold, silver and more recently cryptocurrencies, ICO tokens etc. I deal with a lot of different banks and credit unions and for the most part they are very similar when it comes to doing the deals. You prove the property is worth the money and you prove that you can afford the payments. You provide tax returns and paystubs, job letters as well as rental agreements etc. In Canada we are very conservative, so much so that bank usually only consider 50% of the rental income to service the debt even in areas where there is less than 0.5% rental vacancy rates, usually areas I like to buy in. Think about that, the bank considers that the property will be vacant 50% of the time in their risk analysis lol. I love national banks that have no regional specific risk assessment.
This latest deal we negotiated a mortgage assumption as the sellers needed to get out of the property and the mortgage penalty would be very high, so we negotiated down the price as we agreed to take over the mortgage. I have never dealt with this particular bank before and during this process because of the properties I hold, I triggered a special clause... I needed to show 100K liquid assets to qualify to take over this mortgage.... I should mention that the mortgage is less than 200K with renters already in place.
I like my assets outside of the system... however I also really like real estate. I hold gold, silver and cryptos as part of this strategy.
When I was told that I needed to prove that I indeed had theses, I am sure they were thinking everything would be paper.... surprise surprise, I showed up with screenshots of my crypto wallets as well as with some gold oz.
This must have been exciting news because before I knew it I had the Branch Manager, head financial advisor in the office with me and the loans officer. I then began to explain what cryptocurrencies were and why they are indeed liquid and the advantages of the blockchain, funny enough they mentioned volatility, money laundering, drug dealing, I countered with Jamie Dimon and HSBC.
So after about an hour of conversation, they seemed convinced and informed me that no one has ever tried to list cryptos as an asset class before and this was a first for them.
So it is possible for cryptos to exist within the current financial system, even though they may one day replace the current way we do things, can you imagine SALT and Proppy getting together, crypto down payment and mortgage secured by the blockchain.

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That's a very cool story - It's interesting that you were actually able to convince them. It's hard to imagine a stuffy bank that knows nothing about crypto to get a crash course on it and then say "OK.. seems legit" Did you show them that you were able to instantly move money around and could cash it out? Great job on helping to push it. I'm sure thewy are going to sit around their dinner parties and talk about how they used crypto as proof of assets for the first time ever. Undoubtedly someone will ask them what crypto is and word will continue to spread. They may even start asking customers if they have crypto as proof of income - which could spur more questions. There is no doubt that banks will be looking at it from a very different point of view before long. They will not be able to ignore it and will likely look for ways to cash in on it.

Thx for that, I started to follow you. Real Estate has been a love of mine since I was a teenager. My parents were both real estate agents and my dad used to be in trades. As a family we used to buy and sell, fix and flip but now I am in the accumulate cash flowing properties in undervalued areas and rent mode. That story was my first experiences with a bank policy around property acquisition. I was wondering where the line would be before roadblocks started to pop up and I found it.

Congratulations! You're article was mentioned as a favorite in the Top 5 Real Estate Blogs of the Week . Keep up the great work!

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