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Author Topic: Using Bitcoin as collateral for real estate  (Read 1901 times)
keithers
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April 25, 2014, 05:21:07 PM
 #21

Has there been any news or stories of Bitcoin being used as collateral for a real estate purchase?  I know it has been used to make the actual purchase but what about as collateral?

Given the nature of the block chain (ie. public ledger), it would be easy for a real estate entity to confirm a signee's Bitcoin ownership has not changed while still staying in possession/control of the signee.

I think the new US regulation will open up a new world of 'Bitcoin as collateral' and less so as a 'currency' per se.

Not a chance.

Too much volatility in Bitcon and crypto in general.

My $.02.

Wink

In the United States, the only way that you could feasibly use BTC for real estate, would be to sell your BTC, let the cash sit in your account, and then qualify for the loan.   Or pay for the home in cash (from the BTC)
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April 26, 2014, 12:17:40 AM
 #22

They use gold in Vietnam for housing prices, its easy to hand over and agree an amount of.   If you look up the coin prices for all countries, some national currencies are so bad they make bitcoin look comparatively stable.   Its maybe preferable in some countries to contribute btc more then paper notes and gold has its own issue of theft especially in a wild west type country with no proper police or security possible.  
Any stability btc can contribute might easily be a positive for the transaction as a whole

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April 26, 2014, 12:50:47 AM
 #23

Ultimately the answer to this question relies on how heavily each country scrutinizes the verification of the assets.   Because if there is no verification it can be easily used to launder money through purchasing real estate.
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April 26, 2014, 06:28:52 AM
 #24

Don't get me wrong I'm not saying it is out of the question under the right circumstances..  However I wouldn't bank on it, no pun intended.
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April 30, 2014, 02:12:35 PM
 #25

I had this idea also. The German Fidor Bank is open to this concept (they are somewhat a web 2.0 bank and they already collaborate with bitcoin.de). I talked with a representative. They might come up with something this year, with me as a guinea pig.  Wink

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June 10, 2014, 03:32:41 AM
 #26

Has there been any news or stories of Bitcoin being used as collateral for a real estate purchase?  I know it has been used to make the actual purchase but what about as collateral?

Given the nature of the block chain (ie. public ledger), it would be easy for a real estate entity to confirm a signee's Bitcoin ownership has not changed while still staying in possession/control of the signee.

I think the new US regulation will open up a new world of 'Bitcoin as collateral' and less so as a 'currency' per se.

If you use bitcoin as collateral then it would need to be possible for the lender to be able to seize your coins in the event you are unable to make your loan payments.

My question is how would the lender seize your coins? Unless you transferred your BTC to an address that the lender controls they would have no way to seize them. Even multisig would not work as collateral would be seized without the "consent" of the debtor (as they would have consented when they signed the loan agreement pledging the coins as collateral).

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June 13, 2014, 03:27:10 AM
 #27

Has there been any news or stories of Bitcoin being used as collateral for a real estate purchase?  I know it has been used to make the actual purchase but what about as collateral?

Given the nature of the block chain (ie. public ledger), it would be easy for a real estate entity to confirm a signee's Bitcoin ownership has not changed while still staying in possession/control of the signee.

I think the new US regulation will open up a new world of 'Bitcoin as collateral' and less so as a 'currency' per se.

If you use bitcoin as collateral then it would need to be possible for the lender to be able to seize your coins in the event you are unable to make your loan payments.

My question is how would the lender seize your coins? Unless you transferred your BTC to an address that the lender controls they would have no way to seize them. Even multisig would not work as collateral would be seized without the "consent" of the debtor (as they would have consented when they signed the loan agreement pledging the coins as collateral).

Harley makes a very good point that it would really not be possible to seize your BTC in the event of a default.

You would probably be better off selling your coins for fiat then buy the house (or even better use BTC to pay for the house directly).
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June 13, 2014, 05:46:35 PM
 #28

Doubt you will find any lender willing to lend you 30 years using bitcoin as collateral.

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June 13, 2014, 11:44:55 PM
 #29

Doubt you will find any lender willing to lend you 30 years using bitcoin as collateral.

There are some lenders that allow you to use your stock portfolio as collateral to purchase a home.

Say for example you have a million dollars in a diversified portfolio and with to buy a $700,000 house. A lender may allow you to borrow against the portfolio and use both the stock portfolio and the house as collateral for the loan. The catch is that if the value of the stocks were to fall enough the lender can sell the stocks to pay for the loan. The same is true if you were to fall behind on payments.

In theory the same kind of arrangement would be possible for bitcoin.

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