[GLBSE] House for sale: RFC

[eroxors]

How about simply starting a mining operation, or issuing shares for what you have on GLBSE? That way the BTC price will never get out of control and you can "cash out" whatever you need... 15-20k usd and pay it back with dividends. That 300k amount bothers me.

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[BoardGameCoin]

You did not post asking for a GLBSE home equity loan. You posted your house for sale. There is a difference that you seem to be confusing.

++

punningclan: If you're doing a home equity loan you would be asking for something similar to your liabilities, e.g. around $15000 or your current tax liability. Optionally, you could ask for more and intend to invest it in GLBSE. However, if you're asking for a home equity loan, it's still necessary for the holder of the loan to have title on your house. Without it, there's really no collateral you're offering. In a normal/fiat home equity loan, you already have a primary mortgage on the home and the home equity lender places an additional lien on the title, preventing sale without them being paid off.

If instead of a home equity loan you are essentially selling it, then that justifies something more like the $300,000 of market value. Either way, you need to lose title to whatever entity holds your loan/title.

I really recommend using a traditional home equity line, and if you're very convinced in the viability of GLBSE assets, take out twice what you need to pay your taxes and invest in GLBSE equities yourself. There is no reason to issue a security for this: my analysis is that neither you nor your shareholders would benefit in the optimal arrangement, and in many suboptimal arrangements one or both of you would end up royally screwed.

-bgc

[punningclan]

I'm not sure I've ever seen a home equity loan that requires the home owners to move out and pay rent?

You did not post asking for a GLBSE home equity loan. You posted your house for sale. There is a difference that you seem to be confusing.

The title has been some what misleading and I probably should change that though looking at the content of the proposal it becomes evident. Thanks for that.

[punningclan]

I'm not sure how usagi has taken it upon himself to say that I have "spurned his every advance" since I only see one advance telling me how unlikely I'll succeed without his help. I'm sure his help would be appreciated, but I can't help thinking this sentence "I can pretty much guarantee you that if you don't hire me or someone else, you will simply not be able to list. " looks like some sort of threat?

Are you really saying that all the Bitcoineers you profess to stand for have completely decried collateral based loans even given they are the foremost loan instrument in the world?

The poster also needs to keep abreast of the current facts in this proposal.

Thank you again, but please resist the urge to talk for me.

Not a threat at all, and I am suprised you would say that; note the part where I said "or someone else". I was giving you advice.

Anyway, I did send you more than one message; feel free to publish all of the private messages I've sent you; consider them open letters. Be sure to also post your responses. I won't do it though (out of principle).

And no, I really don't think you will even be allowed to list this. I have not said anything to anyone about it except you, and have no plans to do so. If you make my concerns public you do so of your own accord

If instead of a home equity loan you are essentially selling it, then that justifies something more like the $300,000 of market value. Either way, you need to lose title to whatever entity holds your loan/title.

This is definately the primary consideration for his issue in my opinion. I've offered CPA's services to him, but he does not want them. We'll see where this goes, for now I will decline and remain only an "interested observer".

Good luck with this...

Apart from declaring whatever to the whole forum.

In a way you reminded me of the way real estate brokers treat their customers.
 
I apologize but your private message should have remained private, it's just so easy to copy and paste, however given your stance in the follow up it became evident what was happening. I actually went back and edited the comment realizing it was a little harsh.

Thanks again anyhow and I hope I am able to put together something that works and that you can invest in in the future.

[punningclan]

You did not post asking for a GLBSE home equity loan. You posted your house for sale. There is a difference that you seem to be confusing.

++

punningclan: If you're doing a home equity loan you would be asking for something similar to your liabilities, e.g. around $15000 or your current tax liability. Optionally, you could ask for more and intend to invest it in GLBSE. However, if you're asking for a home equity loan, it's still necessary for the holder of the loan to have title on your house. Without it, there's really no collateral you're offering. In a normal/fiat home equity loan, you already have a primary mortgage on the home and the home equity lender places an additional lien on the title, preventing sale without them being paid off.

If instead of a home equity loan you are essentially selling it, then that justifies something more like the $300,000 of market value. Either way, you need to lose title to whatever entity holds your loan/title.

I really recommend using a traditional home equity line, and if you're very convinced in the viability of GLBSE assets, take out twice what you need to pay your taxes and invest in GLBSE equities yourself. There is no reason to issue a security for this: my analysis is that neither you nor your shareholders would benefit in the optimal arrangement, and in many suboptimal arrangements one or both of you would end up royally screwed.

-bgc

So the questions are:

1) How do banks manage home equity loans? They are unlikely to repossess for say a 20k loan on a 300k house right?
2) If in Bitcoin each user is a tiny bank, as many have realized, why can't those tiny banks do what they want?

Not only do banks reinvest their customers interest payments they tried to do the same with the debt also? I'm not asking for that, I'm asking you to be the bank. The bank doesn't take the title on a small loan they expect payment based on an income report you have to supply. I have a Bitcoin income and without much ado can build a huge fund with unending dividends certainly within the terms of this loan. If you default on such a loan then usually the bank will put a lien against your title but they don't abscond with it, which means I'd have to find a way to do something like that in this case.

Perhaps unfortunately no "real" bank is going to loan based on a Bitcoin income, additionally as you might understand I really don't want too declare that as I imagine many of the funds on GLBSE don't for the same reason quite apart from the extreme compounding interest they charge.

[punningclan]

How about simply starting a mining operation, or issuing shares for what you have on GLBSE? That way the BTC price will never get out of control and you can "cash out" whatever you need... 15-20k usd and pay it back with dividends. That 300k amount bothers me.

You could be right and it might be better to start smaller. I actually have some mining rigs but would certainly entertain the idea of taking a collateral based loan to purchase some of the new ASIC miners slated to be released in October. I do like the idea of spreading the risk across multiple funds and my own mining also.

Although another poster suggests an even larger scale plan that would essentially see the creation of Bitcoin Housing and Loan that I certainly see as being part of a healthy Bitcoin future.

[BoardGameCoin]

1) How do banks manage home equity loans? They are unlikely to repossess for say a 20k loan on a 300k house right?

It's true that banks are normally not going to repossess a $20k loan on a $300k house. Often with home equity credit, they just roll unpaid interest into the principal on the loan. Typically the credit line has a limit, in your case probably ~$100k, after which they would possibly require you to pay up or repossess.

2) If in Bitcoin each user is a tiny bank, as many have realized, why can't those tiny banks do what they want?

They obviously can. I'm just trying to scope out what protections any potential investor should require.

Perhaps unfortunately no "real" bank is going to loan based on a Bitcoin income, additionally as you might understand I really don't want too declare that as I imagine many of the funds on GLBSE don't for the same reason quite apart from the extreme compounding interest they charge.

Have you talked to the banks? You can probably get a loan based just on the asset value of your house. It probably won't be on as good terms as it would be if you had income to declare though.

Also, from a strict tax-understanding perspective, to comply with US law you need to report capital gains income realized when you sell your BTC for $ or real-world goods. Until that point, you can accrue without tax liability (at least this is my current understanding).

-bgc

[brendio]

So the questions are:

1) How do banks manage home equity loans? They are unlikely to repossess for say a 20k loan on a 300k house right?
2) If in Bitcoin each user is a tiny bank, as many have realized, why can't those tiny banks do what they want?

Have you ever actually read a mortgage contract (rather than just blindly sign one)?  

1) A bank is well within its rights to repossess for 20 k on a 300 k house. If they then sell for 200 k, they will take their 20 k from that plus costs and give you whatever is left over.

2) Yes, tiny banks can operate according to their own terms and I have already stated my requirements. You appear to be unwilling to actually offer you house as security as stated.

[Bitcoin Oz]

It needs to be legally binding contract otherwise its not really collateral

[punningclan]

brendio is the first one to propose realistic terms. That would be a really interesting first for bitcoin. I don't agree with the "a trusted forum member's word would prevent needing to reveal the address". Holding as illiquid an asset as a house requires extra burden in terms of proof. I would require an appraiser and a fully notarized transferal of title.

I also think you'd need to be pretty bearish on bitcoins to think that a house would outpace them at the moment. A house is certainly at less risk for total loss however, so if the right boxes are checked you could possibly find some investors. Not me, but it's not a totally unviable idea.

-bgc

I have to admit to being somewhat puzzled at the sentiment that rejects collateral. Many of the stock on GLBSE don't even come with an email, a web site or anything and they have thousands of Bitcoins in investment essentially into thin air. I'm backing this idea with a solid investment, one the bank was willing to uphold through all the years of mortgage. Personally I think Bitcoin is going to increase in value, but the shares need to be pinned to the market value of the house and that's why dividends are important here. Another poster mentioned it may be better to take initial payments in Fiat to avoid the issue with increasing BTC value, but to my mind any stock that's valued against Bitcoin has this so called problem. The stock gets more expensive as Bitcoin increases in value, won't that happen to Gigamining or any of them?

[punningclan]

So the questions are:

1) How do banks manage home equity loans? They are unlikely to repossess for say a 20k loan on a 300k house right?
2) If in Bitcoin each user is a tiny bank, as many have realized, why can't those tiny banks do what they want?

Have you ever actually read a mortgage contract (rather than just blindly sign one)?  

1) A bank is well within its rights to repossess for 20 k on a 300 k house. If they then sell for 200 k, they will take their 20 k from that plus costs and give you whatever is left over.

2) Yes, tiny banks can operate according to their own terms and I have already stated my requirements. You appear to be unwilling to actually offer you house as security as stated.

I understand, I am very appreciative of this conversation and admit to blindly signing giant piles of paper. What I'm trying to do here is to help discover a new way of managing this and other similar loan types essentially following suit with Bitcoin's idea of simply ignoring the current standards and replacing them with my own/the forums. Why is interest so expensive and how can Bitcoin be used to minimize the expense? It seems like it really should be an option given that the banks and insanely expensive agents process can be side stepped to some degree making for easier entry in to a currently monopolized industry.

What I've realized is I could take the house out of the equation completely and simply start a mining fund to buy ASICs it seems to me though that I should put up some sort of collateral to do this although maybe I'm wrong? I mean with collateral I should be able to do it sooner as opposed to without?

[punningclan]

brendio is the first one to propose realistic terms. That would be a really interesting first for bitcoin. I don't agree with the "a trusted forum member's word would prevent needing to reveal the address". Holding as illiquid an asset as a house requires extra burden in terms of proof. I would require an appraiser and a fully notarized transferal of title.

I also think you'd need to be pretty bearish on bitcoins to think that a house would outpace them at the moment. A house is certainly at less risk for total loss however, so if the right boxes are checked you could possibly find some investors. Not me, but it's not a totally unviable idea.

-bgc

I have to admit to being somewhat puzzled at the sentiment that rejects collateral. Many of the stock on GLBSE don't even come with an email, a web site or anything and they have thousands of Bitcoins in investment essentially into thin air. I'm backing this idea with a solid investment, one the bank was willing to uphold through all the years of mortgage. Personally I think Bitcoin is going to increase in value, but the shares need to be pinned to the market value of the house and that's why dividends are important here. Another poster mentioned it may be better to take initial payments in Fiat to avoid the issue with increasing BTC value, but to my mind any stock that's valued against Bitcoin has this so called problem. The stock gets more expensive as Bitcoin increases in value, won't that happen to Gigamining or any of them?

What's missing here is accountability. If there is no accountability for you to actually hand over your house or other assets, if there is no actual enforcement of your collateral, then there really isn't any collateral at all. Brendio said "I would require an appraiser and a fully notarized transferal of title." Others have hinted in that direction in broader terms as well. I did make an offer to you which you rejected.

You said you would have a representative happily visit you and you have said (to me) "any such help would be appreciated". You have also asked me what my qualifications were, why I thought I could do this. Essentially CPA is an insurance company which also acts as a PR firm and legal company in that we can lend credibility through insurance and we can go after people who break their contracts. But, so far you have spurned direct offers to help you along this path. I think the way forward on this should be pretty clear now. So it's really your call. You need to hire a lawyer or a PR firm. If not me, then someone else

If you disagree, then go ahead and list already. Cut this discussion short because it's clear you're not listening to the comments you are receiving. Hey, I will even buy a few shares. Why not? Sounds like a good plan, investing in real estate  

I didn't mean to outright deny your offer, I'm just not in the position to do anything quite yet. The issue of accountability is an important one and what loaning from the bank etc does is provide that accountability but the real idea I had, the one that I've been bitching about the whole time, is to shake the banks and their crony agents loose. To find a suitable method of building a loan like this that everyone can be satisfied with. I'm personally satisfied with my risk on GLBSE so investing there seems like a good deal, in the same way any purchaser of this stock can rely on that stability.

With that said what I could do is have a notorized document proving the property is mine and a contract written up for the shareholders that makes it legally binding that I must pay the holders in the event of some default? I guess something like that would be a minimal requirement.

[Bitcoin Oz]

You would be better off forming an investment group with under 100 shareholders  to make it easier to manage. This group might then investigate other opportunities to tie real estate investment to bitcoin and appoint a treasurer,accountant and secretary etc.

This group could be managed over gpg email.