Name: How to Buy Real Estate Without Selling Your Bitcoin
Uploaded: 2025-10-29T17:31:07.584Z
Duration: 58 min 9 s
Description: How to Buy Real Estate Without Selling Your Bitcoin

Transcript for "How to Buy Real Estate Without Selling Your Bitcoin": I can hear you now. I can hear you. I can hear you. I think we're Great. We're getting more. Sorry, everyone. I was having some camera problems. I'm not sure what happened there. Actually, I I got a new camera recently. So this is the first time I ever tested it with this webinar platform, but it was giving me some issues. Anyway, good afternoon, everyone, and welcome to today's webinar, how to buy real estate without selling your Bitcoin. I'm Lucas Lechuga, founder of Miami Condo Investments.com, and I'm excited to host this session as part of my ongoing webinar series where we connect mining's real estate professionals with the industry's forward thinking innovators. Today, we're diving into one of the most exciting frontiers in finance and real estate, crypto backed mortgages and how this emerging model is allowing investors to purchase property without triggering a taxability by default selling or crypto holdings. Joining us today is Colin McMahon, senior manager of loan origination at Milo. Colin has been instrumental in developing and expanding Milo's crypto mortgage platform, a product that bridges traditional real estate lending with the digital asset economy. Milo has helped clients worldwide leverage their Bitcoin and Ethereum to finance US real estate, often up to a 100% volume of value while keeping their crypto intact and their upside potential fully preserved. Colin, it's great to have you today. Thank you for having me. Looking forward to, you know, sharing some knowledge about how clients are are using their crypto to purchase real estate. Excellent. I can't wait to learn all about I had an opportunity to meet probably meet you a few days ago and, Colin was a speaker at a at a panel here in, the Design District and it was very informative. Awesome. Should I just get started? Good to go? Good to go. It's all yours. Okay. Awesome. And if anyone has any questions, you know, I know there's a a chat option here. You can plug them in there. You know, if if, you know, I have time during the presentation, I'll try to hop on and answer it. If not, there's a q and a at the end and I'll, you know, make sure we get all your questions answered. Great. Alright. Okay. Awesome. So just to go over the agenda, you know, wanna overview what we're gonna kinda work on and, you know, what I think is important in crypto lending. So, you know, the first thing is why now? Like, why are we doing this now? What is our goal? You know, there's a big increase in clients that have Bitcoin and Eth and, you know, over the years their assets are appreciating. You know, I'm sure everyone's heard Bitcoin is is going up, east going up, everyone is starting to get involved in the crypto market. You know, BlackRock and all these major institutions are talking about Bitcoin. So there's there's a lot of positive, you know, feedback and momentum and clients that have it, in the end they they do need somewhere to live, They wanna buy homes and they wanna use it the same way that people use other assets to purchase real estate. So, you know, we're bridging that gap for them. I'm gonna go over the state of crypto lending. So although Milo is a crypto mortgage lender, you know, the whole thing is not the point is not to, like, sell Milo or focus solely on Milo services. You know, we're gonna go into what what's out there in crypto lending, what people are doing, you know, what the landscape looks like and, you know, what some of the major institutions are saying about it as well. And then the last thing is we are gonna go a little bit about how Milo works. We're gonna go over some success stories, you know, how our program works. Usually get a lot of questions about, like, specifics with the program, things like that. So I'll try to answer them all so that everyone understands what we're doing. So first, also just wanna do a little introduction to myself. You know, how I how I got into this role and how I got into crypto lending. So, you know, I I worked as a traditional loan officer for Lennar in the Miami division for roughly, like, seven years. So I've done a ton of FHA mortgages, VA mortgages, conventional, you know, jumbo, you name it. Done done 100 different mortgages for Lennar. And, you know, through that process, I had, you know, my own feelings about how mortgage works and, you know, the guidelines and the regulation and how loans are underwritten and, you know, they weren't always positive. You know, I I kind of have a feeling that there's a lot of regulations out there that are meant to help the consumer, but in the end, you know, I'm not sure how much they are helping and, you know, some of the challenges that I would see with people that were very qualified, just their inability to get mortgages, you know, kind of frustrated me from from the lending side. So you see, you know, a lot of people, they have assets, like, they have good credit, but, you know, kind of there's some DTI restrictions on them and, you know, they weren't able to buy homes that they like or they had to find alternate ways of financing. So I eventually ended up being the sales manager for the Miami division of Lennar Mortgage and thought that's what I really wanted to do but, you know, ended up just deciding that I wanted to do something else. Something that was a little bit more forward thinking. I, you know, truly feel that the mortgage industry will change over time and, you know, I found Milo as a company that was really looking to change it. So at that point, I actually did not have, you know, any Bitcoin holdings and, you know, had had some knowledge of it, but in no way was I close to where I am now. You know, that was about three years ago. So I've I've been at Milo for, like, three and a half years, and, you know, have have learned a ton about Bitcoin, crypto, lending, all of that from from Milo. But the real reason I I switched was just because they were, you know, I could tell they were trying to do something that was really gonna change the mortgage industry, and here we are now. So, you know, to go into why crypto lending matters, you know, I think it's important to understand the current landscape. Whenever I go through one of these conversations, I always like to explain like why someone would do this. Because I I think if you don't understand why someone would do this, it's challenging to understand the program. Especially if you don't have, you know, a lot of experience with Bitcoin or crypto, you know, I hear all the time it's like, why don't they just sell it? You know? And that's that's a big question that I think some real estate agents here, if they they hear that someone has a lot of Bitcoin or a lot of crypto and they wanna buy a house, but they're like, okay. You know, you have all this money. Just just sell it and buy the house. But, you know, the truth is having that belief is is in no way aligned with these clients. So right now, you know, there's a growing Bitcoin and Eth Holdings. So if you look at a client that had Bitcoin five years ago, their net worth is five to 10 x what it was just five years ago if they've held on to all of their Bitcoin. So these clients, you know, their assets are increasing at a higher percentage really than any other asset. So Bitcoin's appreciated by 60% per year. I'd like to throw in this is not financial advice. You know, I may talk, positively about Bitcoin and crypto. I'm I'm just a mere, loan officer, so don't make any investments based off what I'm saying. But these are just, you know, facts of of what it is and it's important to understand these clients. So it's been growing at, you know, a very large clip. So clients are more attached to their assets than they are to pretty much anything else just due to the wealth that it's generated for them. So, you know, to to kinda break down Bitcoin and crypto as well. So probably 95% of the the loans that we've done as a company are for clients with Bitcoin. So I will, like, go back and forth between Bitcoin and crypto, but a lot of it is kind of based on Bitcoin. You know, there there are a lot of other crypto tokens that, you know, are big and like Ethereum, Solana, and, you know, people are looking to take lending against those, but a lot of the conversation will will kinda be around Bitcoin. But so, you know, just the the sheer appreciation, clients are are so loyal to this that they are not willing to part with it. So if you told someone, hey, you could buy this house but you have to sell their Bitcoin, they are more likely to not buy the home because they do not wanna sell their Bitcoin. The other part of not selling their Bitcoin is is tax appreciate I mean, tax implications. So capital gains, you know, it's it works the same way with Bitcoin as it does with kind of stocks. So, you know, a lot of these clients may have bought Bitcoin at a thousand bucks, you know, $5,000, $10,000, 30,000 per coin, whatever it is. If they sell it now, you know, they're gonna have to pay anywhere from 20 to 35% depending on the state on what they sell. So not only would they be having to sell, you know, the amount to purchase the property cash or say to put a down payment, they would also have to sell an additional roughly 30% on top of that in order to cover the taxes that are gonna come due. So it is like a it's a really large hit, and a lot of clients that are are in the crypto ecosystem, one thing they definitely don't want to do is give more money to to the government. So, you know, there's there's a lot of kind of, like, ideologies that they have around that. So just avoiding the taxes is really important to them. And then the third thing is not only is the asset growing, but the market is growing. So in the last year, 12.7% of young home buyers, so Gen Z, millennials, sorry, if you're not in that, you you definitely could still be young. But Gen Z, millennials that use crypto to fund a portion of their down payment last year. So this may not be a huge amount, you know, it could have been $500, could have been a thousand bucks, but 12.7% is is a pretty large number. And as Bitcoin appreciates and as the market appreciates, you know, that's just gonna become more and more. So, you know, everyone may not be looking to use it as collateral for a loan or a mortgage, but it's gonna be part of the conversation. You know, it's it's gonna continue to grow. If Bitcoin becomes 1,000,000 per coin, there will be over 1,000,000 individuals that are Bitcoin millionaires. So, you know, that means that there's a million different people that have at least one coin, and a lot of people think that's where it's going. So just having, like, the knowledge that this is coming, you know, maybe it's not a million a coin next year, maybe it's ten years, who knows? But having a base knowledge that this is coming and understanding really the client and and what they're trying to do and what their pain points are, you know, I think is really important. And, you know, for us, we're we're trying to solve those. So the first thing into the psyche of the client is to understand this, that Bitcoin is greater than real estate. It is really hard to convince any of the clients that we've worked with that their real estate is worth more than Bitcoin. So this chart that you can see right here is I know it's it's kind of silly because the bottom line looks flat, but it's actually the Bitcoin appreciation compared to the appreciation of the average US house over the last ten years. So I'm gonna try to zoom. You know if there's a way here let me go full screen here. Okay. Perfect. So that over the last ten years, Bitcoin has appreciated by 38233%. Wow. The the average US home has appreciated by, like, roughly 90%. That's in the whole US, you know, you could say, like, certain markets or more. But in general in the in the entire US, the index of the average price home has appreciated by 90%. So ten years ago, if you took $300,000, if you invested it in Bitcoin, that $300,000 would be worth a $114,700,000. If you invested $300,000 in the average US home, it would be worth $565,665. Obviously, there is a substantial difference there. So that that concept alone is why these clients do not want to sell their Bitcoin. Like, all everyone that we talk to has a a thing that they bought five years ago, ten years ago that they know exactly how many Bitcoin that item was and what it's worth now. You know, I was we were at a conference last and I was talking to a guy that bought a chandelier in his house, like, seven years ago, and he sold Bitcoin. And he his life his wife loves a chandelier, so he can't take it down. But he just says every day he looks at that chandelier and just knows how much money that chandelier is really worth to him today. You know, there's there's the Bitcoin pizza story, which a guy, you know, he paid for a pizza with 10,000 Bitcoin, you know, today it's it's billion dollars. So, like, the numbers are are just they're unbelievable, you know, when you when you go back and look at it like that. But a lot of clients, they have been holding that long. You know, they they bought 10,000 ten years ago and they've slowly been adding more. They bought 5,000 ten years ago, they've been slowly adding more. So they they have been along for this ride and their net worth is very, very much tied to this asset. So the question of, like, why not just sell it? You would it's like telling someone, you know, because in in their minds, it's gonna keep going. Like, there's there's no part of this that you're trying to convince someone that Bitcoin is going to keep appreciating. Like, the client believes that. So they they come into the process thinking that. So, you know, it would be like telling them that, you know, they know Amazon stock is gonna be worth $3,000 in the future, but it's worth, you know, $10 right now and you're trying to tell them to sell it. Like, you know, no, I'm not, you know, I'm not I'm not gonna do that. I I have a belief of what it's gonna be in the future. So it it's just, you know, it it's a key aspect of kind of everything we're doing and working with these clients that selling it is a very, very challenging topic for them both financially and psychologically. This other chart here is the price of the median median home in The US in Bitcoin. So in 2016, the medium home was 600 if you look at the the price it's a real big quarter. It's created the most amount of wealth. But Bitcoin is, you know, Bitcoin's coming for it. And the price of real estate is drastically decreasing compared to Bitcoin. And so, you know, I think this is this is not financial. K. So how does a crypto consumer purchase real estate today? So the first option would be to sell and buy cash. Basically, you wanna buy a million dollar home, just sell a million dollars of your assets, purchase it cash. This is gonna introduce a huge capital gain hit as we discussed, as well as, you know, being out on future appreciation. All clients who have done this have lost a huge amount of money by selling. That's not like a, an opinion. Right? Bitcoin is at all time highs. So historically, any client that has ever sold their Bitcoin to buy a house has financially lost by selling that Bitcoin. You know, there are a lot of other things that go with the home, you know, a roof for your family, somewhere to, like, set your roots, you know, all there's a lot of emotional aspects. So I'm not saying that that it was the wrong decision for them, but if you just look at it financially from the numbers, they would have more money if they did not sell their Bitcoin to buy that that property. The second option would be through traditional financing. So, you know, a lot of clients that hold crypto assets, you know, maybe they do have a different job or they're self employed, they have a w two and they can qualify in some way for traditional financing. You know, other they a lot of them have, like, stocks or, you know, bonds. Like, it's not like everyone is is a 100% all in on crypto. So some clients are able to, you know, put 30% down on a mortgage and buy the house. The truth is though, a lot of them struggle with that. There's a lot of things that will go into with traditional financing that they don't allow you to use your Bitcoin. They don't consider it. You know, they're they're very unfriendly to it. And then also the debt to income is is just a challenge. A lot of the clients that we work with are looking to buy kind of like that move up home. So they own a home, they're a lot wealthier now than they were five years ago. They wanna buy a nicer home, but the truth is their income has not kept up with their asset growth. So although they have plenty of assets to afford a nicer home, through traditional debt to income, you know, calculations, they don't have enough income filed on their tax returns to afford the home that they wanna buy. So there's a lot of challenges going through that, but, you know, I get it all the time with people like, oh, they call and if I could put 30% down and buy this home, like, why would I use you guys? And the truth is is if if you have other assets and you're not gonna sell bitcoin and you wanna put 30% down, you know, you you can get traditional financing and and right now the rates are better. You know, it's it's hard to compete with the cost of capital of a bank who is getting free deposits or Fannie and Freddie who have massive trillion dollar securitizations. So, you know, it still is the the way to get the best rate going traditional financing. You know, that's that's not why someone would leverage their crypto to to get financing. But then the third option is crypto lending. So crypto lending is is a much larger category than just Milo and and crypto mortgages. There's a ton of different options, which I'm gonna go into in the next slide. But in pretty much all of them, it involves posting your collateral, so you're not selling it. You're posting it as collateral in order to get financing. It's very similar to people that have stocks with their broker and they take a margin loan against their stocks. So it's like you can't move the stocks, you can't trade the stocks, but we'll give you some cash because we feel comfortable leveraging those assets to give you dollars, and that's kind of the the background of of how it works. So I see some rate questions here. We will we will get into the rate rate questions. But let me let me give the value prop first before we just just throw the rates out. K. So the current state of crypto lending, what options are there? So it's been a very hot topic lately to for people to start talking about Bitcoin, crypto. So, you know, Fannie Mae is being more open towards accepting Bitcoin as reserve. You know, Pulte and the administration are making a lot of comments obviously about being pro crypto, pro Bitcoin. The most recent change that Fannie announced, you know, is several months ago, but it got a lot of traffic, was that they will accept Bitcoin as reserves. Most lenders, even if you wanted to sell your Bitcoin and turn it to dollars, would not allow you to use those dollars as a cash down payment on your home or to pay for closing costs because a lot of times it would be considered unsourceable or you didn't know where the deposit was coming from and if it came from Bitcoin you just weren't allowed to use it. So basically what this did was one, allow that to happen if it comes from an exchange. So an exchange would be like Coinbase, Gemini, Kraken, there's a bunch of them. But basically, they're they're more regulated. They produce like bank statements that lenders can get familiar with to see the assets in there, see them sold, coming out, post in your bank account. So, you know, basically, they will allow you to to basically use the cash that came from Bitcoin as well as show a bank statement, from example, Coinbase, and use the crypto assets that you're holding in that bank statement as reserves for your transaction. Another big announcement recently was that JPMorgan announced that they will lend to institutional clients. So, you know, we they came up kinda like like a week ago. That's it's pretty big for crypto that someone like JPMorgan is is gonna look into it. But the truth is they're doing it for institutional clients. So, you know, JPMorgan has a trillion dollar business. You know, they're they're not currently interested in in doing, you know, a billion dollars even of, like, crypto loans. It's such a small drop in the hat hat for them. So really what they announced is that they're gonna lend to, like, large corporations. You know, they want Michael Saylor to post his Bitcoin with them so they can give them a $500,000,000 loan against it. So, you know, it's obviously steps in the right direction to to be more open and JPMorgan doing anything is huge, but it's definitely not to do to individuals or, you know, anything that's that's smaller loan amounts. It's really more on an institutional side. The truth is, you know, a lot of a lot of these banks and big lenders, it's still not at the point that it's worth their time. You know, right now, there's roughly $10,000,000,000 worth of crypto loans outstanding in the market. So mortgages, loans, etcetera, that's really small, you know, for a lot of for people to put too much time into it when you have a large operation going. You know, like companies like Rocket, Better Mortgage, Banks. It's kind of something that they they know about and, you know, they they kind of that 12.7% stat was going around everywhere. So, like, it's something that they're keeping their eye on, but it's definitely not something that they're trying to change their business in any way. They have a a great operating business and to this point, it's not necessarily worth investing too much time in it because the market's just not there yet. It's not big enough for these large institutions to take a look. When they do end up taking a look, they also will move slow. You know, it's it's just kind of how how banks and large institutions work. So there's definitely some some movement in the correct direction, but it's gonna take a while before anything, like, large comes from from a major institution that people are used to doing more, you know, normal lending operation. So the other option is a crypto loan. A crypto loan is basically a client can post collateral and you get dollars. So for example, if you wanted $500,000, or we can do smaller, say you want a $100,000, you could post $200,000 worth of Bitcoin and you will get a $100,000 cash. Typically, they happen pretty quick. There's minimal underwriting, and there's there's probably four to five companies that are, like, really focused on it in The US from a from like a c five, which is centralized finance side. You know, it's historically have used this option to purchase real estate. So rather than selling, you know, if you wanna buy this million dollar house, they've posted $2,000,000 of Bitcoin, taken a million dollar loan, and bought the home cash from the seller, but, you know, they have this lien against their Bitcoin. These loans typically have, like, a margin call. So the way that it that it works would be on this million dollar, you know, situation, they post $2,000,000 of Bitcoin. If the Bitcoin falls to, say, 1,200,000.0, it's getting close to that million dollar that they lent out. So what they'll do is they'll liquidate the Bitcoin. So they'll sell a million dollars worth of Bitcoin, pay off the loan, and give you back, you know, that that extra 200 k in Bitcoin. So you don't lose any money. Right? You still have the cash, but your Bitcoin gets liquidated. So the margin call percentage is is kind of one of the the biggest risks in doing this and it's one of the biggest questions that people have. There also has been some bad players in the crypto loan space in 2022. You know, I'm sure everyone's heard of FTX. There's a company called Celsius, Three Arrows, you know. Basically, what these clients these companies were doing is they were allowing people to post their their collateral with them. So they're posting bitcoin with them and they're giving them dollars, but then when they're taking the bitcoin that you posted, they're kind of doing a bunch of other things with it. They're lending it out, you know, they're trading it and, you know, they got they got caught because prices started to fall and they couldn't cover the loans that they put out. So, you know, that was that was a big reason that there was kind of a huge market crash in 2022 and unfortunately a lot of clients did lose a lot of assets because these loans are are often double collateralized. So, you know, they kept the cash, but the Bitcoin was worth way more than the cash that they kept. So it it definitely kind of has delayed the crypto lending space because these clients, they have to get comfortable again with trusting third parties with their Bitcoin. So what kinda came out of that is what's called DeFi. It's decentralized finance. It's other options to get crypto loans rather than working with a institution like Milo. So Milo would be considered CeFi. You know, if you want a loan, you can call me, go on our website. I'll talk to you. You're gonna send us your Bitcoin. We're gonna send you our dollars. DeFi is all online and it's through something called smart contracts. So, you know, there's there's not really a person involved. It's all based on code. So it's basically like, I'm gonna give you this asset, but if x y z happens, I sell the asset and you have to do x y z to get the asset back. There's like no one that you can call and be like, hey, you know, I'm sorry I'm late on my payment or, you know, have a conversation. It's it's all code based which people like because there's no counterparty risk. You know, there's there's no ability to do something with their assets that they don't want. But, you know, for larger transactions, it could be a challenge just because you have no one to talk to. You know, you you can't kind of, like, be flexible. It's it's it's firm and your assets will get liquidated the second, you know, the the price hits that margin call percentage. Then the third option is the crypto mortgage, which, you know, would would be with Milo. Yep. I think he's having some technical difficulties. Let's give him a minute. I don't know what's happening with this video feed. There you go. Hey. Am I back? I'm not sure how I did I did I kinda just You're back. Yeah. I was gonna yeah. You're good. Okay. Awesome. So now I'm gonna dig in a little bit into Milo. So who is Milo? So we are currently the only company that is actively doing any type of crypto mortgage in The US. There are some companies that have had discussed it, but we are currently lending. We've done over $80,000,000 in crypto backed loans and mortgages. You know, we're venture backed so we raised $24,000,000 from some awesome venture firms in order to do this. We're a direct lender so we can lend in 40 states non owner occupied, in nine states for owner occupied, and we have an entire team that has built out our digital application. So if you go on our website, everything you see there is in house, you know, we have an awesome preapproval tool where clients can get preapproved in five minutes online. Everything is very digital to, you know, match with with the crypto consumer. And we are based here in Miami, so we're based out of Wynwood. And what I find interesting is the building that you're located in. It's also the the site of the the recent exchange floor. Yep. Yeah. There's an exchange. Like, Gemini, which is also a crypto exchange, is in the building even though they're very secretive about it. They, like, don't put their name up there, but they are in there. So yeah. I mean, it's it's a it's a really nice building in Wynwood. So how Milo works. So in the end, our mission is to help clients purchase real estate without selling their crypto. That's the main pain point we're trying to solve. That's why our clients work with us. So typically, we'll do a 100% financing. We'll finance 100% of the transaction. So if you wanna purchase a million dollar home, you can post $1,000,000 worth of Bitcoin, and we will provide a million dollar mortgage. You know, what this does is it prevents the client from having that taxable event that we discussed earlier, and it also allows them to hold on to all the future appreciation. So by doing this, they are not selling it. And, you know, the taxes definitely discussed with your your, accountant CPA. But if they post 10 Bitcoin with us, so say it's a million dollar home, they post 10 Bitcoin, it's a thirty year mortgage. When they pay the mortgage off, they get 10 Bitcoin back. If that 10 Bitcoin is now worth 2,000,000, 3,000,000, 5,000,000, you know, you are keeping all of that appreciation because what you're getting back is is the Bitcoin that you originally posted. I assume you're able to write off the interest on your taxes as well. Right? Just Yeah. The more Yeah. You'll get for sure. You'll get a $10.98 the same way you know, we send out $10.98 the same way any other lender does. So then the the last thing is sorry. One second. Okay. The last thing is just the ability to qualify. So as we mentioned earlier, a lot of our clients have a lot more assets than they do income. So we are qualifying clients off of their assets and obviously considering crypto, Bitcoin, Ethereum, and other other currencies as a means to qualify. So we don't need to look at your tax returns, we don't need to look at your pay stubs, we're gonna just go off of your assets to to help get you qualified for the home that works. So here's just I'm just gonna go a little bit into, like, a few of the terms with the crypto mortgage. So right now, we accept Bitcoin and ETH as collateral. You can do purchase or refi. So a lot of the business that we've done has been on the purchase side. But if you have a property, say you own a million dollar property free and clear, you wanted to do a refinance on it, you know, typically you can get 70 we'll just say 70 loan to value on your your property and cash out, and we can do that as well and still qualify you off of your assets. But what we also allow you to do is post Bitcoin with us so you could post a million dollars in Bitcoin and we will give you a million dollar cash out. The other thing, you know, with the terms, I see a comment here. Are we only paying interest for thirty years? So it is a thirty year mortgage. The first ten years are interest only, then it goes into a twenty year m for the last twenty years. I would say most cases, client probably will not make it to year 11. You know, they're gonna sell the home, refi, pay the loan off. But if in the event they did make it, it would just go into a twenty year m in in year 11. So underwriting and qualification, you know, again, it's all asset driven. So we're gonna look at what you have in crypto as well as what you have in other assets to to help get you qualified. You know, a big part of Bitcoin is how it's stored. So a lot of clients that have a lot of Bitcoin do not just hold it in Coinbase or Gemini. They hold it in what would be considered cold storage or wallets. You know, there's a lot of different companies that that have this. And it's even harder to validate those assets because, you know, one of the the key concepts of Bitcoin is staying anonymous and not having all your information out there. So the way that the cold storage wallet works or, you know, any wallet, it doesn't have to be cold storage, but any wallet is, you know, there's there's a string of numbers and letters that's your public wallet address and you can hold Bitcoin in there. You don't need an exchange to move it. So in the event every exchange went down, you technically could still have access to your your Bitcoin. So there's no counterparty risk. But there's no names, there's no statements, like, there's no ability to technically tie that wallet to yourself. So it is very challenging for lending since we're always trying to validate where your assets come from. What we do since we do understand clients and the truth is most clients do hold their assets this way, especially if they have a significant amount, is we allow them to send us test transactions. So we'll tell them, you know, hey, send us $5, $10. Sometimes you can even send very specific random numbers to prove that this is the client and they have access to that wallet. So they'll send, you know, say $5 of Bitcoin from their wallet to our wallet, and that validates that they do own, you know, those assets, and we will consider them for for all of our underwriting purposes. You know, a big another kind of, like, big part of having having Bitcoin is kind of like storage and keys, which I'll go into in a second. But, you know, just just having that understanding is is important because it is something that probably most lenders would really struggle to to know, you know, how how keys and storage work if they don't aren't from the edge. A 100% loan to value. If there's any other term questions, definitely end. So I get this question a lot of of people being concerned about and it's usually real estate agents being concerned about their client using Milo because everyone will be concerned. You know, like, the seller doesn't want Bitcoin. You know, the the listing agent doesn't want their commission paid in Bitcoin. Like, the title agent doesn't know anything. You're breaking up. Okay. You're back. Am I here? Yeah. I'm back. Sorry. I don't know what's going on. But so the client is posting their Bitcoin as collateral and we are funding the transaction with cash. So the title and a million dollar purchase is getting a million dollars of of dollars from Milo. The seller gets Bitcoin. We can work with any title agent. Technically, the seller can go through the whole transaction without knowing that the the client is getting a Bitcoin or a crypto mortgage because we operate on all the rails. Else. You know, we can close in thirty days or less. Typically, we can do it in shorter time frame. We still some of the things that we still do order is like appraisal, you know, the client has to have homeowners insurance. Obviously, the title has to be clean. Like, things like that are still standard with the mortgage process. But, you know, the 100 LTV, the way we qualify clients is is what's really unique. So I just wanna spend a little time going into crypto loans as well because, you you know, it is a really important product, and it's it's really one of the the coolest products that's that's kind of come from this because the speed is is pretty crazy. So right now, you could come in to Milo, you know, which time is it? It's 12:40 right now and we could send you a million dollars in cash by the end of the day today. So you could fill an application online, say you wanted a million dollars in the in cash, you could post $2,000,000 of Bitcoin and the whole transaction could be completed same day. So the ability to to quickly get liquidity is very unique to this product. There's there's really not many other options out there that you can make it, you know, work that quick. So the reason that at Milo we started doing these loans is because a lot of clients, you know, obviously we're very real estate focused, so clients were coming to us to purchase real estate and sometimes they were late in the process with another lender and it fell through and, like, they needed to close in five days or, you know, it's a fix and flip and it's kind of a weird property that's distressed or, you know, they wanted to buy farmlands. You know, know, that's kinda common with some of these clients. They wanna buy, like, a 40 acre farm in Tennessee or, you know, they wanted, you know, what whatever it is. Honestly, there's there's an endless amount of of things that with real estate that get challenging to do a mortgage on when it comes to both timing and property type. So we started just doing these loans to help solve those issues. So, you know, rather than if they want to buy, you know, a 100 acres, if it's a million bucks, we can't do the one to one mortgage, but we can allow you to post double the collateral, and we just give you a loan against your Bitcoin. We have no concerns about the property because it's not tied into the loan. You get the cash, you buy, you know, whatever you wanna buy with that cash. So the use case is really starting to come out from those properties that are that are tough to put a mortgage on, But it also does go into initial deposits on real estate, you know, even if you wanna finance a 100% of the property, you still have to put some cash in upfront or off the sell or else the seller is not gonna, you know, take the property off the market. You know, we have done this a lot with, the rider actually in in Miami for for their initial deposits. I see Yuri on here, so shout out. You know, so and rather than than selling their Bitcoin to put the deposit down, they could take a loan. We also have done it for, like, home improvement, doing additions. But the truth is clients even live off these. So we have a lot of clients that over the past, you know, three years, right, they say they take a $300,000 crypto loan every year for life expenses. Technically, a rate is probably somewhere between, like, 10 to 12% on these. And as long as Bitcoin has out appreciated that interest, they have actually increased their their wealth, and people just live like that and they've been winning. Right? It's been it's been appreciating, as I mentioned earlier, over 60% per year. So rather than sell, take the taxes, lose down the upside, people just continually take more and more and more loans and and lever up, but the asset is actually out appreciating what they owe and, you know, if that keeps keeps happening, they, you know, they can continue to just keep taking loans forever to do this. So that is a really, really common use case that we see. The way these loans work, typically they're shorter term, so they're like one year. They're IO payments. There's never a prepayment penalty, so, you know, people do use them for bridge loans too, like, short term financing. But with the one year term, assuming that you don't miss any payments and your collateral is still in, like, a good place from a margin standpoint, you just continue to roll it forward. So, like, every year, you kinda just, like, renew the loan. You know, we have clients that are on year three of doing these with us. There's other lenders out there that, you know, I'm sure they have people that have been doing it with they could continue to roll. I see a question here. How does margin call work? I guess I could I could jump into that real quick. So, you know, the margin call is is just making sure that kind of the lender doesn't doesn't lose their money. Right? So different companies will have different margin calls. At Milo, typically, it would be at on the on the loan, a 35% decrease in value. So, you know, if you took a million dollar loan, if the value of you would post $2,000,000 of Bitcoin. If the value of that Bitcoin fell by 35%, we would give you a margin call and say, hey. You know, you can either post more Bitcoin to get this up out of margin call, or what would happen is we would sell the Bitcoin, pay off the loan, and you would get what's left over. So it, you know, kind of just protects both parties. You know, the other option would also be to to just pay the loan down so that the loan to value gets back in the appropriate place. Where does it need to get back if you get the margin call? Yeah. So there's there's not necessarily a specific amount and it doesn't have to get back to the original number. But we have, you know, what we have is a loan health monitor on our website. So, you know, the servicing side of this is really important. So we've built out a really great servicing process. And if you get margin calls, we ask you to bring it back to healthy, which typically would be, like, 50% above the loan amount. So, like, you know, at least if it's a million dollar loan, like, at least, like, 1 and a half million to to put back in there. And how much time do they have to satisfy the margin call? Forty eight hours typically. So that's that is something that is unique about c five versus d five too. D five, it's like you hit the number, you're done, liquidated, like, here's your money. You You know, with a company like Milo, we give you forty eight hours, you can call us, talk to us about it. But, you know, the truth is is you really most people are not putting everything they have in these loans. Right? If if they only have $2,000,000 worth of Bitcoin, they're not taking a million dollar loan and posting all 2,000,000. So you have plenty of time to post more even prior to a margin call. So, you know, if it's down 25%, you you basically have a wallet that you can always send more collateral to. You post more collateral in the wallet, the loan health goes back up and you get further away from your margin call. So you don't you don't necessarily have to wait for a margin call to come to to kinda deal with it. So also just wanna dig into security and custody real quick. You know, this is really important. This is the number one question we get, like, where do you hold it? Where do you custody? I saw one of the questions was here. You know, clients have a lot of a lot of, battle wounds from the years of holding this, of losing it. Pretty much everyone that we work with at some point has lost Bitcoin through a counterparty. So it's really important to to make sure this is, you know, top of the line. So right now we have relationships with Coinbase and BitGo. Both of them are huge qualified custodians, really well known. The assets are held in cold storage. Basically that means that the keys to move the money is not held on the internet. So like it can't be hacked to get the key. You know, it's literally held it's held offline on like a a device that, you know, you can plug in or you have have the keys that you can type in, whatever the situation is. So it, you know, it can't be hacked. And the third one is no rehypothecation, which is really important. This is what FTX and Celsius were doing. They were taking your assets and doing other things with them. You know, with us it just sits in the wallet and that's pretty standard in the industry today just because of what happened. Okay. So just to kinda go over who we help. So there is a little bit of a misconception about clients and and what type of clients we're working with. So our ideal like, the clients that we work with, they typically have a lot of assets, but they're not always just like traditional crypto bro which we get a lot. You know, a lot of people that we work with are 40, 60. We did a loan for an 80 year old guy that had like $2,000,000 of Bitcoin. So, you know, they're they're definitely very financially savvy. They're very tuned into, you know, different markets and economics and, you know, a lot of them have certain beliefs about inflation in the US dollar. And they're not kind of just like this 20 year old kid that made a bunch of money in crypto. So, you know, they were working ten years ago, they put $10,000 into Bitcoin, and here they are today and just unbelievably wealthy due to that decision. You know, they have more assets than income. I kinda went over this with just the amount that their wealth has appreciated over the last three to four years. And in the end, they're believers in crypto. So I never have to sell someone that Bitcoin's gonna appreciate. Like, if someone's coming to me to get a a lending solution, they they don't think it's gonna go down because then they would just sell it. You know, they would sell it now at this price point. So that's never part of the sales pitch is like convincing someone that's gonna continue to appreciate. That's already ingrained in the client and that's why they're coming to a company like Milo or looking to leverage their their assets. So just gonna go over a a quick example. This is a true story, and we have several of them like this. But a client purchased a $3,000,000 home in LA with us in 2022, and the purpose of this is just to show you the magnitude of of how the numbers can shift. So a $3,000,000 purchase in 2022. At the time of the purchase, the price of Bitcoin was $15,000. Client posted 200 Bitcoin, which, you know, equaled $3,000,000 for a 100 LTV loan. Their other option was to to buy cash. They didn't really qualify for traditional financing. So they just sold the property a few months ago. They sold it for 3 and a half million. So made 500 k. He paid off his loan and we returned the 200 Bitcoin worth $21,000,000 to him and a 105,000 of the coin when we returned it. So the total gain by not selling a Bitcoin was over 18 and a half million dollars. If this client had sold his Bitcoin in 2022 to buy a house, he would and I I did the math over here, but he would have lost out on $18,000,000 of upside of Bitcoin. So, you know, this is obviously an extreme example due to the exact timing, but but this is very real situation that that all of our clients kind of have experienced is just the fact that Bitcoin has out appreciated real estate so so drastically. At any point that they sold it, you know, it would be look like a crazy crazy, you know, transaction if you go back in time. So if he'd sold to purchase cash, that would be the other option. He would have had to sold 260 Bitcoin to cover the $3,000,000 purchase, plus an additional 900 k to cover the capital gains tax on that sale of 3,000,000. So value today of that Bitcoin would have been worth $29,000,000. He would have made 500 k off the home appreciation, but his net loss would be $24,000,600 $600,000 due to selling Bitcoin to buy cash. And then you can go into another example. If he got a traditional mortgage, say he could put 30% down, that time that would have been 60 Bitcoin, he would have to sell another 18 to cover the capital gains taxes. That the 78 Bitcoin that was worth 900 k and 20 of that Bitcoin would be 8,200,000.0. So again, this net loss would have been the $6,800,000 on those when you're working with with Bitcoin and the appreciation that it's had. Another example of a transaction we've done is using the loan for for the deposit. So, you know, rather than selling Bitcoin to purchase to put your e m, you know, initial deposit down on a condo, you could take a loan against it and then give those dollars to the the, give those dollars to the developer. So if you had a $2,000,000 condo in 2022, if you put 30% down, that would be $600,100,000 dollars. In October 2023, Bitcoin was $30,000. I mean, the client in Bitcoin for the deposit, 26 Bitcoin are worth $3,000,000. So it would be more than enough to pay for the property, in cash just by not selling the Bitcoin to put the 30% down. So rather than doing that, you know, a client could take a loan for that 600 k, let that Bitcoin continue to appreciate the whole time, and then at closing, you know, you can get a crypto mortgage, finance the whole thing without selling any of your Bitcoin. And then the last kind of slide I have here is just working with Bitcoin clients. So, you know, a lot of realtors reach out because they want to kind of expand their business, get that new client. So just a few kind of recommendations that we have for working with clients with Bitcoin. I think there are a lot of misconceptions out there. So number one would be just ask if a client has crypto. You know, I think that's gonna be more normal. Realtors are are often underwriting their client upfront to see if this is a good deal, you know, can they actually qualify for a loan, is this a good client? Just mix it in, you know, ask if if they have Bitcoin or crypto so you have a kind of a base understanding. The second thing that I think this is the most important is just to understand the issues. The most they most likely do not wanna sell their crypto due to future appreciation and taxes. So if you can communicate that you just understand those pain points and aren't gonna kinda push like hey, just sell it. Why don't you sell it? You know, if you say something like that, it'll be a pretty quick kinda shutdown from the client. So just in general, understanding those concepts is really important. And then the last one is just don't try to be an expert. So, you know, most likely the clients have a lot more knowledge about crypto assets than you do, especially if you're a beginner. So don't try to get in the weeds about, you know, Bitcoin or, you know, how crypto lending works or Milo's program. Like, I think just a basic understanding of their pain points being like, yep. You know, I I get you don't wanna sell it, but there are options for you to not have to sell it. It goes a really long way with building trust with them. You know, if you start trying to answer questions about custody and and, you know, keys, things like that, It could go downhill quickly, you know, if you kinda don't they can tell you don't have a base knowledge. So just accepting and understand the pain points, you know, I think is really important. So let me see if we have I'm gonna go through a couple questions here. Who is the custodian? What is the rate? So rates on crypto mortgages right now are anywhere from, like, seven to 9% for thirty years interest only. Rates on crypto loans are really, like, 10 to 14% depending on, you know, which which counterparty you use. Do you say we maintain custody in our so you when you're when you're leveraging your the question is, did you say we maintain custody either in our coal wallet or an exchange? How does Milo liquidate any amount of default? So in any of these situations when you're using your your Bitcoin as collateral, you would have to send it. So you're not holding it in your exchange, you're not holding it in your keys, you're posting it to Milo, you know, wallet that we create for you. It's still your Bitcoin. You're not selling it, but you do give up the keys in order to to do the the lending. So, you know, we would have the ability to sell it if the margin call came. For a 1,000,000 loan, is it 1,000,000 in Bitcoin or 2,000,000? So question is, for 1,000,000 loan, is it 1,000,000 in Bitcoin collateral or 2,000,000 for Bitcoin collateral? So that would depend on if it's a loan or a mortgage. So typically, the loan would be 2,000,000 since there's there's no property, you know, there's no lien. You would post $2,000,000 worth of Bitcoin and you would get a million dollars cash. For the mortgage, since we're doing it on a property, we are able to do it at one to one. So for a million dollar mortgage, you would post $1,000,000 in collateral. Okay. We'll fly right back. Yeah. We're good. We've had a a couple technical difficulties between between the two of us, but I think we may and It's usually really, really good. Yeah. I have I haven't I didn't go into is it I wanted to get some time for questions. I'm sorry. I went a little slower than I was expecting. So if anyone else has any question okay. Did you No. I I can let you continue. Yeah. We went over rates. Okay. Kinda, you know, generic rates. There there is some, like, credit assessment on the mortgage side. On the on the loan side, there's there's no credit assessment. It's 3% decent value Sure. For Marty. I'll I'll have, Tony asked who is the custodian. Did you get into that? Or did I I did. Okay. Yep. Yeah. We use Bitcoin and Coinbase, but I I went through it. Okay. So new question. Is the 35% decrease in value for margin call the same for loans and mortgages? That's a great question. For it is not. So for loans, it would be the 35% decrease in value. For mortgages, it's actually much larger. It's a 65% decrease in value. So, you know, basically if you did a million dollar mortgage, the value of your Bitcoin would have to fall to 350,000 for there to be margin call. The truth is we we have actually never done a margin call on the mortgage products. We, you know, specifically looked at previous kinda indicators to try to make it so, you know, we don't have to do margin calls. In the end, that's that's not our goal. We wanna help clients hold their Bitcoin to buy real estate, so margin call obviously obviously is against that that mission. Market has been on our side, but, yeah, we we never had to do it on the mortgage side. Nice. Awesome. K. I guess I can just real quick kinda go into the the future of crypto and real estate, you know, kinda what we're seeing in in the industry. You know, a big topic is tokenization. So, you know, I think this will definitely come into play more and more. People wanna tokenize real world assets. People wanna tokenize properties. You know, it gives the ability for for multiple people to, you know, buy one property so you can get in for short investment, you know, as the the, event that we did the other day. Someone was talking about tokenizing the and for development tokenizing that. So there there are a lot of things like that that are coming down. I think the the biggest challenge with those is just like the legal framework. You know, there's people that are tokenizing a property and, you know, if it's an an NFT or on chain, you know, there still has to be title recorded behind it. So, you know, there's there's like legal challenges with understanding, you know, who actually owns this property and the truth is it's it's gonna be what's recorded on title, not necessarily what who owns the NFT or who owns these tokens. So you know, eventually that will all get worked out, but right now those are some of the challenges with the tokenizing side. But there are companies that do it, you know, we've done mortgages for a few of them where they they're buying an investment property, they are tokenizing it and they're selling off like a 100 shares of the investment property so that, you know, they rent it out for you and you just earn a yield on whatever they produce from from a cash flow side. You know, another another big thing that I think will be coming for lending is the fact that Bitcoin actually is a much easier collateral to lend against than even real estate. If you buy a house and you may miss your payments and, you know, the lender, you know, their asset is is the property, so they have to foreclose. It's a big process. There's legal fees. They have to resell the asset. So there's actually a lot of a lot of costs and risks that go along with going through a foreclosure, where if you look at something like Bitcoin in the margin calls that we've discussed, you can just sell it and you get your money back. So the risk is is actually so low that the cost of capital is is eventually, you know, in my opinion, gonna catch up. Right now, the cost of capital for real estate lending is lower, but there is maybe a place in the future where you actually can get a better rate on taking a loan against your Bitcoin than you can on buying a house. So we'll see, you know, if that comes comes true. But just from the lending mechanics, it is almost a safer asset than lending against real estate. I think that's that's all I had. Any other questions for anyone? Any of the attendees? Yeah. I had a few questions, but I think you covered everything. Okay. Well, I I appreciate everyone joining. My my information is here at the end of the slide. So, if anyone has any follow-up questions, definitely feel free to reach out. You can visit us at Milo as well, to learn more about about what we're working on. Yep. Thank you, Tom. Thank you for sharing all your knowledge about this topic. It's it's been very helpful. I'm sure everybody appreciated it. We have another question quickly. Can you confirm in Florida they do order occupied and nonoccupied? They basically invest in a way? Yeah. We do primary in Florida. You know, we're based here in Miami. So, you know, that's that's definitely one of the biggest states that we're we're doing mortgages in. So, yes, you can do, you know, owner occupied in Florida. And I don't know occupied. I mean, that that's And not yet. Zero. Here's it's an investment property. And, Yeah. There's just some different licensing and and restrict regulation for, you know, investment versus first primary in some cases. It's just why the split. Yes. So if you go on our our website, so can you provide which states you you products you offer? We do have it there. You know, you can go on and we have, like, a an option to select the state and it'll tell you what what products we offer in that state. But, you know, real quick, investment properties, it's most states. Primary is May like, most of the transactions we do are California, Texas, Florida, but we can also do North Carolina, Tennessee, Colorado, New Jersey, Connecticut, Arizona. I think that's that's the list. Yeah. Great. Well, thank you again, Colin, and thank you all for taking the time to tune in. Enjoy the rest of your day, and we'll see you at the next webinar. Thank you for having me, and thank you everyone for attending. Okay.