Gold Used as Collateral to Finance Real Estate Investments

[Raymond Ebbeler]

Hello everyone I perused the BP community in the forums section to determine if gold as hard assets (with the ability for liquidation) would have application as collateral for doing a real estate deal. 

I am a collector of gold and silver coins and would easily convert that into hard money. Unfortunately if you have been keeping up with the news "paper" money colloquially called "cash IS trash." Who says that Robert Kiyosaki a multimillionaire. 

They say "follow the money" but I think it should be "follow the gold." There are a myriad of different innovative strategies to finance any deal. I also learned about Binary Options. Rather than talk about this let me show you I subscribe to Michael Maloney's youtube channnel. He is the financial adviser to Robert Kiyosaki of Rich Dad, Poor Dad fame. This IS eye opening and of course it has relevance for the real estate industry...

[Chris Mason]

Originally posted by @Raymond Ebbeler:

I am a collector of gold and silver coins and would easily convert that into hard money. Unfortunately if you have been keeping up with the news "paper" money colloquially called "cash IS trash." Who says that Robert Kiyosaki a multimillionaire. 

 If gold and silver were super easy to use to finance real estate acquisitions, then cash would indeed be trash and this thread would not need to exist. 

As it stands, this thread exists, ergo cash is not trash. 

If we lived in a world where bricks were superior to actual money, you'd just be able to point to a rock and say "look I haz a brick" and someone would lend on it at some interest rate far better than what interest rates secured by real estate command. 

As it stands, money secured by real estate is the cheapest money that exists for non-institutions that need access to capital. I'm not aware of anyone that'll lend at 3.25%-4.75% based on being able to keep a gold brick if not paid back with a reasonable LTV (yup pawn shops think in terms of LTV behind the scenes and would happily hold onto your brick at 25% LTV).

Hell, even a car is useful. I can drive it. A house gives me shelter. If I'm a tech manufacturer then I have a use for gold in electronics, but as a normal person what am I supposed to do with this brick? Paperweight? 

Because of that complete lack of utility, a brick will never be lent on at rates that come anywhere close to what homes and cars get.