Crypto Millionaires from China Are Buying Real Estate Abroad Using Bitcoin (BTC)

The early adopters of Bitcoin (BTC), and numerous other cryptocurrencies, have seen their holdings increase in value over the years to astronomical levels. Some early HODLers are choosing to further diversify their crypto holdings into the global real estate industry.

This is the case with the early adopters of Bitcoin in China. Guo Hongcai, a beef salesman by trade, turned early BTC adopter from China’s Shanxi province, is one of the crypto millionaires diversifying their investments by channeling their crypto gains into the global real estate industry. In April, Hongcai sold 500 BTC in the U.S and used the finds to purchase a 100,000 square foot mansion in Los Gatos: a residential area that is a 90 minute drive from San Francisco, California. He also owns a Rolls-Royce that is parked at the property as part of his purchases from the BTC sale.

Hongcai told Coindesk the following with respect to his new found wealth:

It’s very normal to sell bitcoin in the U.S. After selling bitcoin, you can just buy anything you want.

Mr. Hongcai calls his new residence his ‘Mansion of Chives’ for the word ‘Chives’ (which is also a vegetable) is Chinese slang for crypto investors who are vulnerable to big sell-offs.

Hongcai joins other Chinese crypto millionaires who are diversifying their holdings after the Chinese government started clamping down on crypto activities in the country earlier this year. Some have been known to purchase properties directly using crypto. Others use BTC to gain foreign currencies which they use to buy properties with.

Natalia Karayaneva, CEO of Propy, a real estate firm that deals with crypto purchases, had this to say about the new crypto powered real estate industry:

We’re seeing that more and more people are willing to buy properties with cryptocurrencies because it’s getting easier to get their money out of the country using bitcoin, rather than establishing a bank account based in Hong Kong and getting their money out of the country using business channels.

One such property that was listed by Propy earlier on in the year, was being sold for $16 Million with payment options including Bitcoin (BTC), Ethereum (ETH) and XRP (XRP).



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Author John P. Njui 
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Can Blockchain Impact the Future of Real Estate?

With increasing reports of both Bitcoin and Ethereum being used to purchase property, it appears that digital currency is finding its place in the Real estate sector.



Although a recent Bitcoin News report illustrates that some banks are not prepared to allow customers to use mortgage equity to purchase cryptocurrencies, it is clear that real estate agents are not adverse to taking investors’ digital funds in exchange for bricks and mortar.

A recent article by the Washington Post revealed that in the US, a Miami penthouse listed at the time for 33 Bitcoin carried the stipulation that the client would not take any other form of currency. In the UK buying property using Bitcoin is far rarer. In fact, Bitcoin News recently reported that a Harris survey revealed that 27% of male millennials considered Bitcoin to be a better long-term investment than buying a property, assuming that they were even able to get on to the housing ladder.

It appears that buying property using cryptocurrency is more limited to groups that have made substantial profits trading the digital currency; the crypto “nouveau riche.” In the US the buying of real estate using currencies such as Bitcoin is far more widely accepted and new concepts are beginning to facilitate sales in innovative ways.

Longstanding real estate and private equity firm, Muirfield Investment Partners, have joined with the company in an attempt to use blockchain to introduce more liquidity to the real estate market by developing a token which can be freely traded, whilst remaining compliant with US security laws. Thomas J Zaccagnino, Muirfield’s founder, commented, “By tokenizing a real estate investment vehicle, investors are for the first time, able to freely trade their ownership on regulated secondary exchanges.”

Blockchain itself has become a boon to the industry with numerous applications. According to the Washington Post, in 2016 Goldman-Sachs projected a $2-$4 billion savings in the title insurance industry as a result of using blockchain to verify and store land titling. This said blockchain is not the only solution to finding cheap, speedy, solutions to recording land and property ownership.

The Post suggests that DLT can’t detect a forgery nor will it detect a foreclosure issue, which effectively means that such titles can’t be marketed, indicating that despite DLT’s effectiveness in real estate transactions, it does have its limitations, in that it can’t necessarily offer buyers title insurance.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Harold Vandelay
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What You Can Expect If You Are Willing To Accept Cryptocurrency For Selling Your House

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After a long debate, my wife and I decided we were going to put our house on the market, but I had one condition. The condition was that we would accept cryptocurrency, such as Bitcoin, as a source of payment.  My wife was somewhat hesitant at first, largely due to the volatility associated with cryptocurrencies, but ended up agreeing.

Before listing our house, we met with several real estate brokers and mentioned our openness to accepting cryptocurrencies for the sale of our house. Every broker had the same question – why?

Cryptocurrencies, such as Bitcoin, is a form of digital money that is designed to be secure and, in many cases, anonymous. Cryptocurrency relies on the power of the internet to guarantee its value and confirm transactions. Users on a network verify every transaction, and those transactions then become a matter of public record, which is known as the blockchain.

Real estate brokers are generally very excited about the potential of cryptocurrency, although, it has yet to become mainstream.  The main reason is that the U.S. dollar is the most powerful and stable currency in the world. What would the benefit of using cryptocurrency as a source of funding for a real estate transaction be? The common response, and the one I voiced to my wife, is that it is generally all about being a part of the emerging cryptocurrency and blockchain movement.

After some careful research and various conversations with real estate brokers, attorneys, and title insurance agents, I came up with the following recommendations for anyone seeking to accept cryptocurrency for a real estate transaction:

Understand the Risks. Cryptocurrencies are highly volatile and risky.  Make sure to work with a real estate attorney that has a solid understanding of how cryptocurrencies work.  Any seller accepting cryptocurrency should be very familiar with the token or tokens they are willing to accept and should consider converting some of the tokens received back into fiat (U.S. dollars).

It’s All About the Contract. One of the most important parts of the process is for the parties involved to agree on a price, type of cryptocurrency to be used, and closing date. This is when the parties will agree on a U.S. dollar (fiat) price as well as the cryptocurrency to be used (i.e. Bitcoin). According to Michael Tobin, a Miami real estate attorney with Tobin & Associates, P.A., it is vital that the purchase and sale contract be drafted by a skilled attorney in order to account for the risks of using cryptocurrency, such as volatility, and the process for transmitting payment. In addition, it is good practice that the contract has some sort of fluctuation limit in place during the closing period, which can be a few weeks.

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Understand the Law. Not every state accepts blockchain data and smart contracts.  States such as New York and Arizona do and there is an expectation that more states will follow suit.  Therefore, if you are in a state which has not legalized smart contracts, the sales contract will likely need to be reflected in U.S. dollars.

Not Ready for Blockchain. There are currently some real estate blockchain start-ups currently working on pilot projects for recording deeds using blockchain, but it is not been widely used.  As a result, the recording of the deed from a cryptocurrency real estate transaction will generally be required to be done locally through the appropriate county recording office.

Be Prepared to Use Some Fiat. Most attorneys, real estate agents, and title insurance companies will not accept cryptocurrency. Accordingly, you will likely need to pay these individuals in fiat (U.S. dollars). You could always convert your bitcoin to fiat to pay these fees or just use U.S. dollars.

Keeping the Transaction Private is Not Always Possible. One of the primary advantages of cryptocurrency is that transactions are secure and anonymous.  In general, buyers of real estate who wish to remain anonymous tend to use an entity to make the real estate purchase, such as an LLC.  However, under a recent FinCEN anti-money laundering initiative, title insurance companies will be required to report the identity of the natural persons behind shell companies, such as an LLC, who will be using all cash, likely also covering cryptocurrencies, which are over a certain amount (i.e. $3 million for Manhattan), and are in one of the several targeted geographical areas, such as Manhattan, Dade County, FL, Los Angeles County, CA, and several others. The monetary thresholds for each geographic area varies. The FinCEN order is set to run through September 16, 2018, but it has been extended several times before.

Overall the process for purchasing a home using cryptocurrency is not very different than using fiat. Although, this could change if the deed recording process ever moves to the blockcain. However, it is important that the parties involved work with their respective attorneys in order to make sure the sale and purchase contract effectively covers the risks involved and protects them from any cryptocurrency related volatility or transfer issues.

 


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Adam Bergman
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