Tokenize Real Estate

A luxury Manhattan condo development is getting a new digital home on the worldwide Ethereum blockchain. The building, a completed 12 unit construction with 1700 sq ft units located on 436 & 442 E 13th St in the East Village, is the first major asset in Manhattan to be tokenized on Ethereum. The property has recently been appraised at more than $30M.

Tokenization is the process of representing the ownership of real world assets digitally on a blockchain. This new method of financing is the result of the partnership between Propellr and Fluidity, two companies that have joined forces to offer compliant products and services for the creation, distribution, and transfer of digital securities.

Propellr is a creation, management, and servicing platform for digitally held assets, and parent company of Propellr Securities, a FINRA registered broker dealer. Propellr will use its financial and capital markets experience to offer and sell traditional and tokenized securities under what is known as Reg D rule 506(c).

Fluidity, the team behind AirSwap, provides technology services to registered broker-dealers, issuers and financial institutions for tokenized securities. Fluidity has partnered with Propellr for their institutional capabilities, allowing them to accept fiat payments and solicit and sell securities under 506(c).

The tokenization structure was contemplated and published in The Two Token Waterfall, a comprehensive framework for applying blockchain technology to the entire capitalization of a real estate transaction. The added transparency of the structure has the potential to improve the liquidity of private securities, and can be applied to a broad spectrum of assets in the real world.

I work as a financial markets researcher and analyst for EGM Securities. I have extensive experience trading Forex, stocks, and cryptocurrencies. I write about market trends, real-world fintech projects, macroeconomics, and blockchain.

Shehan is the Head of Tax Strategy at CoinTracker.io (bitcoin & crypto tax software). He is one of the handful of CPAs in the country who is recognized as a real-world operator and a conceptual subject matter expert on cryptocurrency taxation.

The liquidity that tokenizing real estate unlocks in the sector can benefit both investors and the owners of property assets by offering the former an expanded range of investment opportunities, and the latter access to a larger pool of potential purchasers, many of whom may have been previously unable to participate in the property market due to its capital requirements and other entry barriers.

Xian Yang Wong, head of research for Singapore at global real estate services firm Cushman & Wakefield, said that in addition to allowing landlords to tap a larger pool of investors, tokenization also offered flexibility that was lacking in traditional real estate.

Blockchain technology is not a relatively new technology. It existed for many years, but only now has it gained mainstream appeal. The past few years saw blockchain technology getting integrated into various businesses and bringing significant benefits and change. Now, according to experts, real estate tokenization can bring beneficial changes throughout the economy, financial institutions and companies. Lets know it how!

One of the industries that blockchain will have a tremendous impact on is the real estate industry. Blockchain here makes it possible for users to tokenize houses, properties and apartments and represent them on the blockchain.

Presently, real estate remains the safest investment type and ensures better returns than any other investment opportunity. Ask anyone about the best investment to make, and they will tell you to buy an apartment or a commercial space. The only downside to real estate investment is the significant capital required. People with lots of money can invest in real estate, but that also means that regular people get left out.

Tokenization here means converting a real asset into several digital tokens and selling them on an online marketplace. The people who purchase these tokens own a portion of the asset. This asset exists as a blockchain-based digital token. Every token here represents direct ownership of an asset. These assets can be a piece of real estate, shares in a company owning real estate, participation in a real estate investment fund or anything else.

Many companies in real estate already see the potential benefits tokenization can bring to their verticals. Many are integrating the technology to change real estate transactions and change the established business models.

The process of real estate tokenization involves converting a real estate asset into a token on the blockchain and putting it for sale. You can also create tokens for properties under construction. These tokens represent an interest in real estate or can work to raise capital for investment development. The latter process attracts a broader range of visitors and developers to participate orinvest in real estate.

Real estate asset tokenization is a way for a business or an organization to raise capital from crowd sales. The process works similar to crowdfunding, but here it involves tokens available on the blockchain.

The real estate tokenization process utilizes blockchain, removes the reliance on intermediaries and significantly reduces the investment requirements. This approach could unlock trillions in liquid global real estate assets. It also makes these assets accessible to a broader investor group on an open marketplace.

Anyone can invest a specific amount and become a partial property owner and benefit from the profits generated. Additionally, the token holder can sell these tokens on secondary markets at higher rates. The property owner can sell parts of their assets through token issuance. Real estate tokenization provides a better option for crowdfunding as it gives the user instant digital ownership. Here, the user is free to sell the token when required

Property tokenization removes the limitations related to location. There is nothing to stop a user from buying a property on the other side of the world. Users can participate and profit from resort construction, housing estates or rentals anywhere in the world.

Token investment minimizes costs and provides greater freedom as anyone can purchase a share in real estate and profit from it. The site automates the process and does not require pointless formalities. The user acquires the property rights by purchasing a token, which does not require any mortgage or real estate records.

A user only has to purchase a single token. Here, the user can participate in a smaller shareholding structure like distributed investing. This process requires a small sum of money to buy a piece of real estate. The process lowers the entry barrier and makes investment accessible to people with less capital.

Real estate tokenization makes transactions secure and makes the process transparent. Tokenization utilizes blockchain technology and provides the highest security standards available. Blockchain, by nature, is decentralized. It means there is no copying or code reversal, and nodes will identify any changes to the code.

The concept of tokenization has a significant impact on the real estate industry. The trading of digital assets andtokenized real estate shares will bring substantial change. Blockchain technology could alter the way the real estate industry works and operates.

Also, tokenization lowers the high entry barriers and brings change to an industry. For a long time, the real estate industry dealt with high barriers to entry and illiquidity. Tokenization opens up this market and helps democratize this sector. It also enables large quantities of capital to enter.

Real estate has nearly always been considered a relatively safe investment. After all, whatever happens in the stock market, people will always need a place to live and work. Yet, real estate transactions also tend to be some of the most complex and expensive, rendering real estate itself relatively illiquid.

In recent decades, securitization has had some success in making real-property interests easier to deal in. But a new method of engaging in such transactions promises to go even further in transforming the purchase, holding, and sale of real property: Tokenization.

Tokenization and the blockchain offer numerous advantages over traditional methods of dealing in real estate. These include increased liquidity and transparency, enhanced security, and simplified management.

But tokenization is also a highly complicated process, both technically and legally. Companies interested in launching a real-estate-backed virtual token must carefully consider and resolve a wide range of issues when planning, developing, and launching their real-estate token.

Tokenization is the process of creating a virtual token to represent ownership of a real estate interest. Rather than dealing with regular real estate interests in an outdated manner using paper documents, purchasers are able to engage in transactions digitally using tokens. 781b155fdc