Auction Financing
vpr
Posts: 622 ✭✭✭
For large purchases, what are the terms usually (and current estimate interest rates)? Assuming you have a lot of skin in the game, say 50% of a $200K purchase? Short term financing (1yr) vs longer term (5+ years amortized or interest only).
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200,000? call
What coin ha
I didn't have all of the funds available, and I didn't want to use a CC for a 15k win/purchase.
So I chose the option below, not a bad deal really. It was like a 'layaway' plan, like when I wanted a t/v from Wards back in the day lol.
Bought it in Dec, delivered in March...
https://www.greatcollections.com/main.php?cmd=paymonth
Ideally, (at least) it would be done on a case by case basis, based on a number of different considerations.
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Call and find out. I know you don’t take possession until you completely pay for the coin. I would want to know if you’re able to sell the coin before completely paying for it. Stuff can happen in life.
Home Equity Loan Line of Credit?
In the right situation I'd do it.
Please be careful
Experience the World through Numismatics...it's more than you can imagine.
This is outside of my wheelhouse.
Over the years there have been a few times when I've bought coins I couldn't afford, but not ones that i couldn't pay for.
Here is a page for HA for an upcoming auction. Do not know if other special extended payment plans can be negotiated.
https://www.ha.com/c/ref/payment-terms.zx
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RLJ 1958 - 2023
Don't
There is no harm in financing for convenience. I have financed some things over the years where I had the money, but i was making more money keeping it invested in the bonds I had them in than i would lose paying interest on financing.
Financing because you cant yet afford it is a terrible idea.
Financing is OK if done up to let’s say six months for example. But YEARS on a six figure coin purchase?? That’s really sketchy in my book…
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
My Full Walker Registry Set (1916-1947):
https://www.ngccoin.com/registry/competitive-sets/16292/
A few years ago Amex rolled out their "Plan It" and offered 0% interest no fee for 12 months. I bought my Morgan 1879-CC MS64 and took Amex up on their offer.
I did have the money to pay for it but I'll take the Air Miles, use Amex money for free and take immediate possession of the coin.
Timing is everything!
USAF (Ret.) 1985 - 2005. E-4B Aircraft Maintenance Crew Chief and Contracting Officer.
My current Registry sets:
✓ Everyman Mint State Carson City Morgan Dollars (1878 – 1893)
✓ Everyman Mint State Lincoln Cents (1909 – 1958)
✓ Morgan Dollar GSA Hoard (1878 – 1891)
Wise words, my friend… Success in Life is all about timing.
Sometimes, it’s better to be LUCKY than good. 🍀 🍺👍
My Full Walker Registry Set (1916-1947):
https://www.ngccoin.com/registry/competitive-sets/16292/
It better be a pretty special coin. As others have said, negotiate terms with an actual human at the auction house.
Not for me. Having played with credit for a good chunk of my life, I now see it very differently. You do you, but there's no way I'd pay for hobby stuff with credit. To dangerous. Too many things can go wrong.
If you can't work it out with the auction company, you could try CFC.
https://cfcgoldloans.com
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Why in the world would you (collector) finance your coin purchases? For me, it would turn pleasure into work......
Don't.
I have finally reached the point where I am debt free and will not buy anything I can’t pay cash for.
Don't.
I would really like Golden to explain his comment especially since he's also a National Bank Note collector. A couple of years ago, a major collector of Nationals died and his collection went to auction fairly quickly. He had notes that I had been waiting FORTY YEARS to come on the market. Because of the number of notes involved, I didn't have the cash on hand to buy everything I wanted so I made arrangements with the auction house to spread it out. So, I splurged in the auction, got everything I wanted, and have since paid the invoice completely off.
So, if I had followed Golden's advice, I wouldn't have the notes I wanted. What was I supposed to do? Wait another 40 years?
Member ANA, SPMC, SCNA, FUN, CONECA
I should probably elaborate:
I'm interested in the 1794 $1 F12 coming up for auction at HA. I have the cash to pay for it, but would rather not use up such a big chunk, all at once. I expect to be able to pay off the balance by the end of the year. Of course I don't expect to have the coin in hand until the loan is paid off.
Also if it's a coin dealer, they can bid on my behalf etc. I don't want to pay for those services and perhaps this is a way to make it worth their while and also build a relationship in the process.
HA has financing but 12% a year plus 1% set up fees is expensive. I'm looking for financing closer to half that without any other fees. I believe it is appropriate given that this is secured by a $1794 $1.
Yes, a lot can happen between now and EOY 2025, but also YOLO! Please feel free to DM me if you'd be interested in representing me at auction and/or finance a portion of the purchase.
Thanks! Anyone have any luck with negotiating better financing terms with HA? 12% is a lot given that I'm good with a 50% down payment on the purchase.
If you can afford a ~$200k coin, you must have other sources of financing. Home equity line, line of credit collateralized by investments, 0% offer on credit cards, etc etc.
Or, if not, spending <$10k on finance charges via HA through the end of the year is probably less than whatever markup a dealer would charge to buy it and re-sell to you.
chopmarkedtradedollars.com
Oh yeah, I like the coin, but at $200K+ I see it as an investment. So naturally, all-in price is important to me. Just weighing my options here. Should I pay all cash or finance a part of it, and if financing, is there an option for lower cost of financing vs traditional avenues like home equity etc.
Home equity rates are high because of a lot of factors. If you default, the bank has to jump through hoops to get their money back. They can't just kick you out of your house the day after a missed payment, auction off your home and get their money back. It's a 1-2 yr process and it costs them money (attorneys etc). Those potential risks are baked into the interest rate. I don't want to pay those rates. A 1794 $1 with a cost basis at 50% hammer price is a low risk investment. I'm trying to understand if loan rates are in line with the risk associated with these sort of transactions...
A home equity line of credit is probably your best option. Assuming your credit rating is good, you should be able to get a line established pretty quickly.
Also, if you have cash siting in an IRA/Roth IRA you can "borrow" the funds for 60 days.
The current Home Equity offer from my bank is 6.75%. Of course I liked it better when it was 1.99%.
You might be able to open a new charge card with a high credit limit and no interest for 12 months to cover part of tthe payment.
Damn, lower than I thought. I don't own a home, but will look into the 0 APR credit card option. Thanks!
Brokerage margin loans run 10-12% which is sort of the gold standard for secured lines of credit. If you borrow enough, usually close to a million, you can negotiate that down to 8% or lower.
I'd say Heritage rates, if accurate, are in-line with market rates for secured loans with illiquid collateral. If you are spending enough, you could probably negotiate that down a bit.
The lowest rates are for HELOCs, but you are probably going to pay setup fees or early payment fees that erase the benefit of lower rates.
Paying 10-12% annually with a brokerage margin loan or a Heritage loan, is actually the best bet if your intent is to move money around and pay off the full balance within 6 to 12 months.
Thanks Hedge Fund Trading Desk. I come from the industry and am well aware of the "usury". It's not actually usury when you consider that banks have to pay their employees a decent wage plus keep the lights on and the fancy Manhattan office etc.
I'm just exploring my options here. But def not interested in borrowing money for 12% interest. A 1794 $1 with a 50% haircut and no "state/county/city working against the lender" laws is not illiquid collateral. A house with a credit line is illiquid collateral.
When I was younger... Heritage facilitated deals with me... They helped me in a 3rd party private purchase of some high end walkers... They were instrumental in helping me build the collection I had.. before the Heroin. They also helped me sell the coins when I needed a lawyer... C'est la vie.
Anyway... Heritage does great in house financing. Stacks uses a 3rd party financing group.
Coins do not pay interest or dividends. It takes luck and hard work executing your angle to make any coin investment to work.
Financing coins on borrowed money a step towards bankruptcy or being buried in debt. The interest cost and other Opex - you would really need to get a high markup have any chance make it work. if your job goes south via hostile takeover, etc. - your sunk.
no house? you need a safety deposit box
When I sold a large collection through one of the major auction houses, at their encouragement the larger dealers bidding were offered interest-free financing (1/6 per month for 6 months). This is not always well-publicized, but also not unusual.
Do not do it. I suggest you wait for another 1794 even if it takes a 1-2 years for the one you like to show up. If you cannot afford it simply accept that and move until you can (if you can).
There will be other 1794's they are rare but not rare enough that there will not be other chances.
I highly doubt that the coin you are speaking of will sell for less than 300k. Maybe buy one you can afford even if just authentic (better owning a mega key that not owning one but buy one that does not cause financial problems for you). 200k will not cut it on the PCGS F-12.
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In the end you cannot live in a coin or eat a coin if things turn bad money wise.
NFL: Buffalo Bills & Green Bay Packers
No sir, I don't want to buy a house or a vehicle, I want to buy a coin -
"When they can't find anything wrong with you, they create it!"
I am very skeptical coins except for increases in BV are going to advance very much.
I'd wait for a nice vf
The OP is talking about financing with respect to a F12. Why would he wait for an even costlier “nice VF”?
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
all I'm suggesting is dangerously leveraging life savings for a better coin - the obvious choice - maybe sell the house, live in a car, shower at the Y
@vpr
Probably you could work out a deal at either 1 year, or up to five years.
But if you can afford to pay within a year - Do It!
Multiyear borrowing is quite a cost…
30+ years coin shop experience (ret.) Coins, bullion, currency, scrap & interesting folks. Loved every minute!
Being debt free really shines a light on the biblical quote "the debtor is the lenders slave." I fell into that quicksand trap years ago, and foundout how difficult it is to extricate oneself. At this stage of life-late 60's-I find I want nothing bad enough to fall into the debt trap again.
Geez!!!
What’s wrong with financing a coin when you’re cash poor at the time of purchase but will be able to payoff the loan in a few months?
chopmarkedtradedollars.com
So that implies half of adults have financial literacy. Lol.
i get the impression he's in the area of loans business and is looking for additional ideas
That’s not the case.
Then wait to buy the coin in a few months!
"When they can't find anything wrong with you, they create it!"