Real Estate Asset Tokenization
When it comes to investing with tokenization there’s a whole lot more options for everyone. That’s because investors can own fractions of an asset, including things like real estate.
With us, you’ll get an entire process that’s designed to make things as easy as possible for you but still gives you regular cash flow. You’ll have great liquidity, capital efficiency, rent payments and maintenance costs, and you can do it no matter what kind of investment ability that you have. In fact, you can get involved with:
- Commercial real estate tokenization
- Residential real estate tokenization
- Single real estate tokenization
- Trophy real estate tokenization
Real Estate Tokenization
When it comes to real estate there are plenty of people who want to get involved, but it’s often not as simple as that.
This industry is immense and the concept of tokenization and blockchain can turn it into something else entirely. That’s why it’s become so important and its gaining so much potential. It offers even more efficiency and even globalization for investors.
By tokenizing real estate you convert the value of the property into digital tokens. Those tokens can then be sold to investors, which allows you to raise funds. But it also means that investors can get involved with lower costs because they’re buying a fraction of the overall value of the asset.
With us, you’re going to have the opportunity to work with a team that understands tokenization and can get the process done for you quickly and accurately. Plus, we can reduce your illiquidity discounts and get you less of the struggles that usually go along with tokenization and real estate investing in general.
Real Estate Tokenization Strategy
Real Estate Tokenization Checklist:
- Decentralization
- Smart contracts
- Types of interest
- Legal entity
- Securities regulations
- Corporate code
- Asset type
- Location of assets
- Ratio of tokenization
- Mortgages on assets
- Investor traceability
- Automated KYC/AML
- Accredited investor verification
- International fundraising
- Legal & regulatory frameworks
- Numerous jurisdictions
The Process of Tokenizing a Real Estate Asset
- Finalize the deal. You need to make sure that you finalize the deal based on assets, jurisdiction, type of shareholder and even regulations.
- Form the legal structure. Next, you’ll need to look at what the property owner wants, including the option to create a special purpose vehicle or become a member of a real estate fund. They can also get involved in the project finance or even join part of a real estate investment trust.
- Select the technology. Next, you need the right blockchain network so that the token is created in the most efficient way. Investors need a solution that will let them store the tokens that are created safely for them and the investors. Securitized tokens are then offered through trading or primary issuance.
- Create the tokens and distribute. Finally, the tokens need to be created and then distributed according to a set plan. The plan needs to allow for multiple payment methods and you’ll definitely want to be able to check in on how your fundraising is doing at all times.
Security Token Offering for Real Estate Assets
Prospective investors are being offered what’s called a securitized token, which means that the entire situation and process is a security token offering or a tokenized asset offering.
When an investor purchases a token they will own a share of whatever that product or asset is. Then, they can earn larger returns through appreciation. What’s even better for you is that you will have freedom to decide how you want to market your asset and therefore improve the process of transactions and decrease illiquidity discounts.
End-to-end asset-backed tokens in the real estate industry is a complex issue, if you don’t know what you’re doing. But we can help you with all of the different aspects from technology to legal and even to auditing to make sure you’re getting the capital that you want. Plus, our tokens are always compliant with multiple jurisdictions because of the way we create the smart contracts.
With us, you’re going to get everything that you’re looking for to make sure that your contracts and your tokens are just the way you want them.
Benefits of Tokenizing Real Estate
So, you know a bit more about the process, but just why would you want to tokenize your real estate holdings? The truth is, there are plenty of great reasons.
- High-volume liquidity. By tokenizing your real estate you can make the buying and selling process more efficient and also convert the value of the property into cash much faster.
- Fractional ownership. Through tokenization the ownership of a property can be split into more pieces and more easily than otherwise. This allows you to spread out the risk and the reward, cutting down on your challenges.
- Globalization. There’s no need to worry about geographic barriers when it comes to tokenization because you can work with people located all over the world. And that increases the opportunities for your profits.
- Peer-to-No intermediaries. Working with third parties can cut into your profits and it makes the entire process more complex. But you can get rid of that with tokenization because it’s entirely peer-to-peer. You’ll have lower costs and lower risk.
- Peer-to-Blockchain immutability. There’s no risk of incorrect records of mistakes being made because the blockchain doesn’t allow for mistakes and it doesn’t allow for changes to the record once that record is completed. It also provides protection and security for all involved.
- Instant transactions. Transactions in this process are instantaneous and efficient, because they’re all done peer-to-peer without the need for additional involvement or intermediaries.
- Lower entry cost. Because tokens can be broken down so many times and the value can be divided out so much it means that investors can get involved at a much lower entry cost. This helps to get more small time investors involved and helps them to diversify their portfolios as well.
- High security. Because this system is carried out in blockchain that means it’s not owned by anyone in particular. That means there’s no one who controls the system and therefore no one can gain more power over others.
- Peer-to-No intermediaries. Working with third parties can cut into your profits and it makes the entire process more complex. But you can get rid of that with tokenization because it’s entirely peer-to-peer. You’ll have lower costs and lower risk.
Factors to Consider While Digitizing an Asset
When it comes to offering tokens in the market you will need to think about:
- The type of interest that will be offered to investors
- Security laws to comply with geographical location
- Corporate code setup to form the entity
- Mortgage issues related to properties
- Guidelines for domestic versus international sale
Practical and Legal Issues Related to Tokenization
- Government regulations regarding KYC/AML verification
- Uniform regulations are lacking related to different countries so they must be followed carefully
- Tokens need to be recognized as shares or rights for proper cash flow
- Self-regulation can be done if there is proper adherence to the law
The Scope of Real Estate Investment Tokens
- Ethereum, Hyperledger and Stellar token structures
- Blockchain & smart contract experts
- Knowledge on market requirements
- End-to-end real estate token solutions
- Experts in technology, legal and financial processes