How to Buy Real Estate With Crypto | Bitcoin, USDT & Crypto-to-Cash Closings

John Ioannou (00:00)
So about three weeks ago we did a four point two million dollar purchase of a property in Florida. Buyer was nervous, so he actually came into our office, which I’m okay with. so he sat next to me. He was using USDT from his cold wallet. He had it on he pressed send at

Four million dollars USDT. I received those funds in 49 seconds. It was amazing how fast it was.

Freddie Steen (02:05)
Hey everyone, welcome to the Investor Fuel Podcast brought to you by Real Estate Pros. My name is Freddie. I’m your host, and today I am so excited to be chatting with someone I’ve been wanting to talk to for a while. John from CryptEscrow, who has a niche in real estate that everyone needs to know more about because he is combining the crypto market.

With the street, real realtors, how do you manage to bridge that gap? Insert CryptEscrow. John, I think our listeners are really going to take something away from how you’ve been able to bridge this gap successfully. So let’s dive in. First off, for people who may not be familiar with your world in crypto, give us the short version. What’s your main focus these days at CryptEscrow?

And what markets are you operating in?

John Ioannou (03:01)
Yeah, thanks, Freddie. Good to be here. So we are basically a crypto conversion company. We convert crypto into real world assets. We’re based in the US and we’re able to take a buyer’s cryptocurrency that could have either a stable coin or Bitcoin, and we convert those funds into US dollars.

for the purchase of real estate or real world assets. Any type of asset that they want to purchase in the real world, we’re able to bridge that gap between the two worlds.

Freddie Steen (03:41)
I love it. I mean, what caught my attention about you, John, was the way you’ve been able to bridge a career in law as a lawyer and bridge that into a very white hot space, which is the crypto space. And you’ve done it in multiple markets, and that’s not easy, especially in this climate. What’s been the key to keeping that machine running smoothly?

John Ioannou (04:04)
What we offer is the trust factor. As you mentioned, being an attorney is a big deal in this space. Cryptocurrency space can be dangerous at times. The background of being an attorney helps with the trust factor. You have to be able to trust the company that you’re sending crypto to. So we’re able to be transparent.

With buyers, we’re also able to answer phones. There’s a lot of companies that are so big that you can’t get anyone on the phone. I usually encourage our customers to call me directly, chat about what we’re doing, I can explain the process to them real simply, and then they feel comfortable in sending their crypto to a US-based company, knowing that the funds are going to get to where they need to get to.

Freddie Steen (04:54)
Wow. Wow. Really John,

John Ioannou (04:56)
Love this.

Freddie Steen (04:57)
let’s talk about this magic that happens when converting digital wealth into tangible real assets. Let’s talk about the conversion trigger first. When an investor works with you, at what exact point does the crypto turn to cash? I mean, is it held as crypto during the escrow period or do you liquidate it to USDT?

The second the earnest money deposit hits your system.

John Ioannou (06:10)
Yeah, so the process actually real simple. We’ve narrowed it down to three steps. The first step is going to our website. There’s a get started button in the top right corner at CryptEscrow.com. And what that buyer needs to do is to go through a KYC process. It’s basically a background check on the buyer to confirm their identity and also to do a liveliness check because fraud is somewhat rampant in this industry.

So we want to make sure that the buyer is who they say they are. And they’re also run against sanctions lists, government sanctions lists to make sure that these buyers are not part of any money laundering group, trafficking group, or criminal organization. So once they pass that test, which takes three minutes, it’s an amazing protocol that we have with a company. it’s a very quick process. It’s not an in-depth background check. It’s basically checking against these sanctions lists.

Once they’re approved, we send them a one-page contract that basically tells us the type of cryptocurrency they’re going to be using, the amount they’re going to be sending us, and the wire instructions are where they want us to send those funds to. They sign that electronically. That can take a couple minutes as well. As soon as we get that back, we send them our crypto wallet.

And then from their crypto wallet, they transfer to our crypto wallet. As soon as we receive it, we do an immediate conversion into US dollars. And then we immediately wire it out to wherever it needs to go. This can be used for deposits, it can be used for down payments, and it could also be used for cash to close. So all of this process that we do can take less than 24 hours.

Freddie Steen (07:57)
Slippage and price protection. in high value transactions, John, as we talked before the pod, we were talking about asset prices can shift mid-trade, right? How does CryptEscrow protect a buyer from slippage during large conversions so the exact dollar amount needed for closing is guaranteed?

John Ioannou (08:18)
Slippage is a real thing. It’s happening even today with Bitcoin. It’s bouncing up and down quite frequently. So the good part with us is our fee that we charge includes that slippage. So whatever you send us, our fee covers any slippage. So let’s say that your deposit is $100,000. You’re going to send us $100,000 plus our fee.

we’re gonna make sure that our fee covers any slippage and we take out our fee and then we send that hundred thousand dollars on to where it needs to go. So there’s a guarantee here that if you’re sending us what you need to send us plus the fee, that that amount gets wired to the title company for that exact amount.

Freddie Steen (09:04)
John, I meant to ask you, on as far as the off-ramps are concerned, are you converting directly from major digital assets like Bitcoin, Ethereum into USD bank wires, or are you seeing a heavier reliance on stable coins like USDC for property purchases?

John Ioannou (09:23)
Yeah, so the I give you the lawyer answer of it depends. So it depends on where that buyer is from. We’re seeing a lot of BTC owners from the US using BTC to purchase properties. From Latin America and Europe, we’re seeing a lot of buyers using stable coins and mainly USDT. So it depends on where the buyer is from. But the good news is with us, we can convert

any in all major cryptocurrencies into US dollars.

Freddie Steen (09:55)
Nice. You mentioned the wire, and this is I know that our Real Estate Pros and our some twenty thousand nearly subscribers are salivating and chomping at the bit for a couple questions about that. The wire origin problem. I mean, underwriters and banks, as you know, John, are terrified of unverified funds. So when your company sends the final wire to a local title company or closing attorney.

Whose name is on the wire and how do you ensure the title company’s bank accepts it without flagging it?

John Ioannou (10:28)
Yeah, so another excellent question. We’re working right now on an app that will actually create an account on behalf of the buyer and so that title company and attorney gets a wire in the name of the buyer. The good news is right now we’re working with crypto friendly banks.

Where we have no issues when we convert the funds into US dollars and wiring them out. We have had a lender, because a couple times a buyer has used us as a down payment for getting a loan. Lenders will contact us and say, Hey, can you source these funds? We want to make sure that they are part of the buyer’s portfolio. So we are able to give them

The KYC process that we do for verification. And also we can do what’s called the wallet check, a blockchain analysis that shows that this wallet is associated with this purchaser and that they have adequate funds in that wallet. So we’re able to give those verifications to lenders as well. And if title companies or lawyers want that, we’re happy to share.

Freddie Steen (11:41)
That’s perfect. John, let’s talk seasoning of funds. Most traditional mortgage lenders and title companies that you just mentioned want it want to see funds seasoned in a bank account for sixty days. How does your conversion model bypass or satisfy this requirement for a fast moving investor?

John Ioannou (12:02)
So what we’re able to do is provide that blockchain analysis of the wallet. And as you know in the blockchain, if you have someone’s wallet, you can see the entire history of all the transactions that have gone in and out and when that has happened. So providing the wallet analysis can provide exactly what they’re looking for.

Freddie Steen (12:24)
Yeah, and now you’re talking in my favorite, one of my favorite categories, risk mitigation and compliance. What kind of audit trail or certificate of conversion does CryptEscrow provide to the closing attorney so their compliance officer can comfortably sign off on the deal?

John Ioannou (12:41)
Yeah, so part of being a licensed money service business, which we are, we need to have a compliance officer on staff. So we have a compliance officer. We have on many occasions been asked for our compliance officer to contact someone else’s compliance officer, and the two talk in their compliance terms, and we’re fully transparent so we can provide any information.

information they need, but we have a compliance officer on staff that handles all compliance issues.

Freddie Steen (13:13)
Thank you for that transparency. Now, John, the Investor Fuel audience wants to know how this puts money in their pockets. For wholesale flippers or you know, other asset classes, how can they use your conversion service to advertise their properties to the crypto community without actually having to open a crypto wallet or touch digital assets themselves?

John Ioannou (13:38)
It’s huge for them. Basically, they can advertise that they accept buyers with crypto. And what that does is basically open up the buyer class to a global market. We’re not talking regional, we’re not talking, we’re talking global, where any investor anywhere in the world who has crypto can purchase this property.

And like you said, the investor doesn’t need to open up a crypto wallet, doesn’t have to be on any of the exchanges, doesn’t have to go through any KYC process to get on any of those exchanges because that does take time. we do all of that. And we were talking earlier. One of the main questions is, okay, John, so why you and why can’t this buyer just do it on their own? Number one is

There are daily limits that retail buyers have that they can transfer, five or ten thousand dollars. There’s also monthly limits that buyers, retail buyers have. Million dollar house purchase, no problem. Ten million dollar commercial property purchase, no problem. Hundred million dollar development issue prop project, no problem.

We can handle that. So that’s number one, we can do it. Number two, if the buyer who’s a retail buyer wanted to do it on their own, and let’s say maybe they have a little bit of higher limits. When you’re on an exchange, you can transact business in the millions of dollars every day. You can upload millions, you can trade millions, but as soon as you want to offboard millions,

The BSA laws come into place, the anti-money laundering laws come into place. So these exchanges need to do updated KYC processes on the buyer. If they say, hey, I want to offboard a million dollars, it’s not that easy. It gets flagged, and then they got to go through the KYC process. Unfortunately, with these exchanges, they have millions of customers, but only thousands of customer service representatives. So you go into a queue.

Couple days later you’ll get a response from hopefully a person or maybe a bot that says, Okay, you have to upload a current ID of yours. So you do that. A couple days later, then you go back into the queue and they say, your ID is blurry, upload it again. And so you do that again. Then they ask you, okay, they ask you some questions. The reason I know this is I’ve gone through it. It’s a pain in the butt. They ask you some questions, you answer the questions, and then they come back a couple days later and they ask you five more questions.

So you’re going through this whole thing, it can take days and weeks and maybe even months. So what we’re able to do is because we’re an exchange, we’ve gone through this process already with these exchanges, we can do it within one day. And that’s not the worst part. So let’s say okay, you go through that process, you get through it, and then you’re approved to off board money.

And then you say, okay, great, please wire these funds to my title company. The exchange says, no, we’re not wiring it to any account except to your account, the account that you open the account with. We have to wire it back to that account. So you say, okay, fine, wire it to my account. And most likely this buyer has a legacy bank like Wells Fargo or Bank of America or Chase.

So these banks know who Coinbase is. They know who Kraken is and who Gemini is. So if they receive a million dollar wire from a Coinbase account, that gets flagged again. So now the bank has to do their KYC process on you again.

So again, banks, millions of customers, thousands of customer service reps. So now you go back into the queue and you’re doing the KYC process again, and that can take days or weeks. And with these banks, they can freeze your account. And if they don’t like what they see or they’re a little bit nervous about the transaction, they can close your account. So we work with crypto friendly banks that

Are they know that we’re a crypto company and they approve all these transfers? So number two is we can do it. So number one, we can do it faster. Number two, we can do it. And number three is if you have a retail account, fees are usually higher, two or three percent for transferring these funds. Because we’re licensed and institutional, we have institutional rates of around one and one and a half percent that we charge. So

We can do it, we can do it faster, and we can do it cheaper.

Freddie Steen (18:26)
And for those of our audience, John, that may be newer, correct me if I’m wrong. KYC does stand for know your customer, correct?

John Ioannou (19:16)
Correct. KYC, know your customer. KYB, know your business. And basically it’s just a check on that buyer to make sure that they’re not on any sanctions list and they’re doing anything illegal. The government’s very strict against money laundering. So that’s one of the main things that since we’re a licensed company, we have to check. They put the impetus on us to make sure that the customers that we’re working with are legitimate customers.

And this is also good if you’re selling, you want to make sure we do this at the very beginning of the process to KYC. So you know that you’re dealing with a legitimate person and not being strung along with some buyer who’s not really looking to buy a property.

Freddie Steen (20:00)
That’s perfect. John, can a buyer use CryptEscrow to verify their digital wallet balance and issue a paper proof of funds letter that an investor can present to a skeptical seller or a bank?

John Ioannou (20:14)
Absolutely. So the way that process works is we have the buyer send us a test amount, ten dollars or a hundred dollars. So once they do that, we know the wallet address of where it’s coming from. So then we get that wallet address and we do basically a background check on that wallet, and we can source that wallet from the very beginning of when that wallet was opened.

And with the buyer’s permission, we can provide that to the seller or investor.

Freddie Steen (20:45)
Quick question on the speed versus traditional wires. Does converting crypto to cash via your platform at CripS

John Ioannou (20:52)
Bro.

Freddie Steen (20:53)
add days to the closing timeline? Or can you execute a conversion and wire out to title just as fast as a standard bank to bank transfer?

John Ioannou (21:03)
So about three weeks ago we did a four point two million dollar purchase of a property in Florida. Buyer was nervous, so he actually came into our office, which I’m okay with. so he sat next to me. He was using USDT from his cold wallet. He had it on, he pressed send at

Four million dollars USDT. I received those funds in 49 seconds. It was amazing how fast it was. Even I’m still 49

Freddie Steen (21:38)
Or

John Ioannou (21:38)
seconds. 49 seconds of transfer, 4 million USDT. If he would have gone to a bank, number one, if he’s even overseas, anytime you want to transfer large sums of money, you probably have to go in person.

You have to set things up, you have to talk to the manager, and then the manager has to make sure that everything’s in order, and he has to go to his manager. So that can take days. what happens with cryptocurrency in this amazing new world is it’s done in seconds. We get it in seconds, we convert it into US dollars through the exchange that takes minutes to do, and then from the exchange, our exchange to our

Wire system that takes minutes as well. So all of this, depending on what time it’s done, can take less than twenty-four hours.

Freddie Steen (22:28)
Perfect. What is the fee structure, John, for this conversion service? And is it a flat rate or a percentage of the total purchase price? crucially, how does that compare to the cost of a buyer trying to cash out on a standard real estate exchange?

John Ioannou (22:44)
Right, so we’ve kept also our fee structure really simple. If it’s a transfer amount of less than a million dollars, the fee is one point five percent of that transferred amount. If it’s more than a million dollars, it’s just one percent. Real simple, no other hidden fees, nothing, there’s no registration fees, no one needs to sign up for anything, there’s no monthly minimum.

That we charge. I hate that when companies do that. you can use us once and you can use us a thousand times, and it’s only on the amount that’s being transferred. So if someone is sending $10,000, they would send ten thousand one hundred and fifty dollars. We take out the one fifty and then the ten thousand continues on to wherever it needs to go. And compared to retail prices.

If they’re doing it on their own, those fees are usually around two or three percent and sometimes even higher. So as I mentioned, we have institutional rates because we’re licensed and so our rates are less.

Freddie Steen (23:48)
Is there a floor or a ceiling to the deal sizes on CryptEscrow? can an investor, maybe our Real Estate Pros, can they use CryptEscrow for a fifty thousand dollar wholesale flip or is this primarily built for multi-million dollar commercial acquisitions?

John Ioannou (24:06)
No, we’re an equal opportunity company. So yeah, we’ll we’re here to help. Part of the idea is to help bridge that gap, right? So we don’t have limits on the low end and we don’t have limits on the high end either. We’re here as a tool to help investors basically broaden out their buyer class to a global market. And that’s our goal is to assist

and help people make sales and to get the process going.

Freddie Steen (24:34)
Yeah, now every operator I know has a moment where things got real. Maybe a deal that went sideways or a time they had to pivot fast. You mind sharing one of those moments for you?

John Ioannou (24:46)
So actually, yesterday someone sent Bitcoin to us. And just recently in the past couple of days, Bitcoin’s bouncing up and down, and there’s a lot of fluctuation in there. So what we’re able to do is because we have a staff here that’s ready and looking at our exchange and ready at any moment to convert that.

We actually have to make sure on our end that as soon as these funds come in, that they’re instantly converted. So that slippage issue that we talked about doesn’t hurt our side because as we say, we guarantee that amount. So if someone’s sending 10,000, we want to make sure that 10,000 gets to where it needs to go. So the good news is that we’re on top of it. We’re actually with cryptocurrency.

We have a process of making sure that someone’s always watching twenty four seven because this is also there’s no eight AM to five PM. There’s no banking hours with cryptocurrency, which is another exciting part of it. So we’re also able to do the exchanges twenty four seven. We have someone who’s always on board, so

Freddie Steen (25:55)
Kind of stuff people don’t talk about enough, John. Honestly, it’s what separates the folks who just dabble from the ones who stay in the game long term. Thinking through this whole process, making it convenient 24 hours a day, seven days a week. That is the kind of access that incorporates the speed at which our Real Estate Pros do business. Let me ask you this. John, what are you most focused on solving or scaling next?

I mean, what’s the next real goal for you? And I think you’ve already given us an insight into breaking news that you’re working on an app.

John Ioannou (26:28)
Yes. So what we’re working on now is definitely working with real estate and assisting people buying real estate. We’re also working with other types of real world assets. We did a plane a couple weeks ago. We’re working on a shipping container that someone wants to buy. And when you start dealing with these other real world assets, you’re working with international

businesses. So another thing that we’re working on is with a Brazilian farmer who wants to buy fertilizer from China, they have USDT. South America is really big into USDT, these stable coins. China is not into cryptocurrencies yet. So what we’re able to do is make that bridge between an international buyer

To an international seller, and then re-bridge that gap where they send us to USDT, we convert it to US dollars and rewired into that international seller. Buyers and sellers are super happy, the product gets shipped and everything is done basically on an international scale. So we’re working on that as well. The app that you mentioned.

Is something that we’re working on where all of this can be done by the buyer themselves. They do the KYC process themselves. They can open an account on the app, they can get the wallet address in a secure fashion, they can send the test, and they can see that their money has arrived in our wallet, then they can send more funds, and then from there.

They can wire out those funds themselves to the seller. So we’re working on it being something that the buyer can do on their own. What we’re working on now is making sure it’s super secure. The security part is very important to us, not only the transparency, but the security part. We don’t want any bad actors coming in and having funds sent where they’re not supposed to go. So

Right now that’s the last part of the app that we’re working on. And the most important part, so we want to make sure we get it right, but that’s coming soon and we’re super excited about it.

Freddie Steen (28:44)
John, that’s big. I mean, especially when you’ve already got this rich history in legal that you’ve married to a licensed money service servicing company, that you’re now leveraging all of that into the crypto space, which we know is coming, particularly with the leaning in of the transactional nature of big box brands like Home Depot.

JPMorgan Chase embracing smart contracts, paying vendors through crypto. You know, you’re ahead of the game with this. And we know that it’s coming to real estate. And we’re very excited to know that you took a wrinkle in time to spend with us today. The next move that you make can really compound things if you play it correctly. Now, I know a lot of people listening.

Are either earlier in their journey or looking to level up like you are, John. And I think they benefit from hearing this.

When it comes to building relationships and growing your network, what’s made the biggest difference for you?

John Ioannou (29:48)
I get pleasure out of working with people, helping people come up with solutions to problems that they have. So the problem that I saw in this industry was you have a lot of buyers with crypto wealth that didn’t necessarily have dollar wealth, right? They’re really big into crypto.

And maybe they’re not in the banking system. Some international buyers don’t necessarily have a bank in their country. Maybe they’ve been debanked. So they’re cut out of the real estate market and they’re unable to buy things or invest in in properties. So what I saw an opportunity was to help people with crypto wealth.

get into real world assets and to buy things that they want to buy and not be excluded from that process. So that’s one of the things that I enjoy is helping people, speaking with people and coming up with solutions to everyday problems.

Freddie Steen (30:52)
Yeah, you can’t fake that, John. Relationships are everything in this space. All right, before we wrap, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach you?

John Ioannou (31:08)
We have a great Instagram page where we put a lot of educational material on there. We’re talking a lot of about crypto in this space. So our Instagram page is CryptEscrow. C-R-Y-P-T escrow. And also our website, cryptescrow.com. There’s a lot of information there on what we offer.

And then as I mentioned, there’s that get started button. If you do have a potential buyer, there’s an opportunity to KYC someone to make sure that they’re a legitimate person. They just click on that get started button. It’s free of charge, there’s no fee to go on there. Basically, they need a smartphone. There’s a QR code that comes up. They click on the QR code to follow the instructions, and it’s taken care of from them. So those are the two main ways to contact us. Our

eight hundred number is 833-53-CRYPT. And then if someone has a question or if a buyer wants to talk to us a little bit more or a realtor or an investor wants to know how we can help them, we’re happy to do so.

Freddie Steen (32:16)
Perfect. Well listen, John Ioannou, I appreciate your time, your story, and your perspective. We need more people in this space who are doing it the right way from the start. Thanks again for being here and we wish you the best with CryptEscrow.

John Ioannou (32:34)
Thank you, Freddie. It’s great being here.

Freddie Steen (32:36)
And for those of you tuning in, if you got value from this, make sure you’re subscribed. We’ve got more, so many more conversations coming with operators just like John at CryptEscrow, who are out there building real businesses just like you. We’ll see you on the next episode.