All Forum Posts by: Jerry Shen

Brian please elaborate on how it’s different. At closing bank takes x euros valued at y USD and exchanges immediately or takes x euros valued at y usd and exchanges immediately. Bank gets cash either way

Originally posted by @Andrew Ware:

Sorry my post was muddled. My point was that a bank is going to want stable currency to do a deal that will take a month.

 Sorry I'm not sure I quite understand your point. I'm not looking to settle the amount on bitcoin, I'm looking to settle on dollars. No different than if I had euros and on closing just sent them to the bank at whatever the prevailing exchange rate was and the bank can just exchange to USD.

I got into bitcoin late last year and my holdings are up 2000%. I’m looking to liquidate some of that into real estate but I don’t want to sell and covert to cash hopefully can work with a bank who will accept crypto as down payment

@james they don’t have to hold on to the asset they can liquidate to cash as soon as they receive it. Just looking for a lender with some flexibility on this. I know I can always liquidate myself but it’s not a very flexible approach as I am long on bitcoin and I think it will still go up in the next year.

Originally posted by @Zack Karp:

@Chris Mason is spot on as usual. Bitcoin and other cryptocurrency cannot be used as a down payment in a traditional mortgage (Conv, FHA, VA, USDA). However if you liquidate the Bitcoin, and can show evidence that you were the one who made the initial investment(s) via bank statements, then those funds should be able to be used, as long as you are prepared to show all that. Sourcing of funds is 100% required, every time.

Makes sense, but I don't buy traditional mortgages because I invest in large commercial properties which are outside of standard loans anyway. So curious if that still applies or if it's bank by bank. 

Originally posted by @Account Closed:

Perhaps I should spell this out for people.  The government is not a fan of bitcoin.  This is because all of the experts say all cryptocurrencies are for the purpose of money laundering.  Banks do not tell you when they report your transactions as suspicious to the government.

Many transactions over about $9500 ($10,000 is a soft cutoff.  Multiples of $9000 + will also automatically get reported) that a bank can tell are from a cryptocurrency conversion will be reported.  It is done with a simple click by the teller or by a processor later.

Each one of those reported transactions makes it more likely the person will be audited by the IRS.  If you are a foreign national or someone else that might be on a watch list those are the exact transactions the USA PATRIOT Act's financial provisions were meant to detect.

 I'm not sure where you are getting your information but my experience as someone who holds (and transacts) in large amounts of bitcoin:

1) Money laundering with bitcoin is no easier than with cash. In fact, the blockchain is public and completely NOT anonymous this is a common misunderstanding. It is very easy to trace bitcoin transactions they are in plain site and any exchange that operates in the United States has to abide by the same KML and anti-terrorism and anti-money laundering laws and as any other financial institution. 

2) Everything you wrote also equally applies to cash. There is no difference. Anything above $10K in cash is also reported.

3) Likelihood of an audit is not a concern unless you are hiding money. That's not what I'm trying to do. Most people with lots of money have a higher chance of being audited anyway.

4) The government does not hate bitcoin, it has been adopting a wait and see approach but I encourage you to read actual government statements like the one released today by the SEC chief on ICOs. Bitcoin transactions are 100% transparent and available on a public ledger. It's a dream for the IRS and far easier to track than cash. Why would they be against that?

Your statements may have been accurate 4-5 years ago but they just aren't true anymore.

@Chris,

Interesting points but I don't look for FHA or Fannie/Freddie loans as my income varies quite a bit and I deal mainly in commercial properties so I'm usually getting a commercial loan that originates from a bank or credit union. FHA may have stricter KML laws but I know for a fact that Coinbase is compliant as I have had no problem transferring large amounts of money between coinbase and my bank (Wells Fargo).

Btw every bank I’ve worked with has already recognized my bitcoin in my net worth for loans so it’s not as fringe as you might think for banks

@michael Biggs I am not trying to avoid taxes I am trying to use bitcoin as down payment for a loan. I’m not sure how you know this is impossible banks are trading in bitcoin futures and SEC is regulating it as a commodity so there has to be a few banks that are willing to do it. Hopefully a mortgage broker can chime in here

Originally posted by @Charles Kennedy:

Congrats on the significant gains. No reason you can't sell the day before closing if you're bullish. Most people here are more conservative investors and would advise you just sell, but if you're set that the price will continue to rise, just sell a few days before closing.

If I could do that I would (sell day before close). But my understanding is banks need to see enough cash for a down payment when you begin the loan process. Would they take cash equivalents like bitcoin and stocks? That's part of my question.