“The times, they are a changin’”, as a mid-century poet once stated (yeah, it was Dillon but roll with it). Since Bitcoin and cryptocurrency hit the mainstream craze, some traditional lenders are beginning to entertain the idea of including crypto holdings as assets when prequalifying clients, as well as working out hybrids such as a crypto down payment and financing the rest of the loan in fiat. The seller doesn’t necessarily need to accept the crypto down payment unless they choose to do so, but as we know a crypto to fiat conversion is just as easy.
To add, crypto lenders are popping up, and they each have their own niche in the space. I’ve listed below what I think are the best ones so far. As Realtors in the new age of crypto, we should all add these to our knowledge base and continually research the new platforms that are consistently being introduced, and by all means, please email me the ones you think we should keep an eye on.
If you’re a savvy crypto investor (or a beginner as well), chances are you’ve heard of SALT Lending. SALT Lending holds blockchain investments as collateral for cash lending. A borrower sends the collateral to the SALT collateral wallet and fiat funds are then transferred to the borrower’s bank account. They maintain portions of the collateral both in hot and cold storage, where it remains the property of the borrower, and any depreciation or appreciation still belonging to the borrower. Once the loan payments are completed, the collateral is returned. The minimum amount one can borrow is $5,000 with no maximum. No personal guarantees or credit checks involved. Rates are varied due to market conditions, but my guess is they’ll tack on a little more due to the specialty, which I’m almost positive any crypto borrower won’t mind.
I know I’ve mentioned my friends at Homesidekick, and I’ll mention then here again. These guys cut out the middlemen in mortgage funding as loans are directly sourced from other individuals. In other words, your property is crowdfunded. They, along with the other crypto lending platforms, rely on blockchain technology for customer identification, underwriting and title review. The information is transparent to you as the borrower, so you’ll know at any given time where you are in the process, how much each party is receiving along with distribution of funds. Another selling point is that the loan is closed within days, never sold to the secondary market and the folks at Homesidekick will always be the point of contact. Refreshing, isn’t it?
Then there’s the new kid on the block, Block66 (yeah, see what I did there). They’re so new that as of this writing their website isn’t yet completed but will be by the end of May 2018. Block66 has an automated alignment process that will connect potential borrowers and lenders, saving time and costs. CEO Joe Markham is aiming to complete the entire loan process from beginning to end in 48 hours using, yep, you guessed it, blockchain technology and smart contracts. I’m excited about this one because like SALT, I can get my own favorite traditional lenders on board and adapt the loans to fit my clients’ personal needs and get my clients up and running in no time whatsoever.
I’m sure there are many other similar platforms looking to add value to the lending side, as the lending process as we all know it is archaic, time consuming and expensive. As the blockchain-powered real estate platforms grow and secure their footings, I see them partnering with lenders like these for faster, cheaper, transparent and verifiable end-to-end transactions that can be completed in a matter of just days rather than the average 30-60-day escrows. Get ready to see a massive shift in the next two to five years.