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.
