Real estate is highly illiquid but through tokenization, it becomes possible to directly transfer and trade real estate assets to other investors in a very inexpensive and efficient manner. Platforms such as the one provided by DigiShares
make this possible and maintains a fully updated share cap table at all times.
Real estate processes are also traditionally very cumbersome and paper-based, involving a lot of manual steps with banks, notaries, etc. With blockchain-based processing of real estate assets, it becomes possible to digitize and automate many of these processes to a much higher degree. With a platform such as the one from DigiShares
, these processes can be fully automated:
- Registration of new investors and collection of required information. The actual verification of this can be outsourced to a third-party KYC provider for USD 2-3 per check
- Purchase of shares and investment into the property. The purchase process can be fully automated, allowing the transaction to occur with no manual processing at all. The share cap table is automatically updated after the purchase is completed
- Payment of dividends and interest. By clicking a single button, it becomes possible to pay out to all investors at once, based on a predefined allocation formula
- Trading of digital assets. DigiShares
provides a built-in OTC marketplace where investors can trade with each other. No manual processing or participation from the real estate administrator is required.
The very high degree of automation makes it possible to have hundreds of investors in real estate projects unlike today where the number of investors is often limited to below 10. This in turn makes it possible to "fractionalize" and allow investors to participate with $1,000 or $10,000 size investments.
Only a few "accredited" investors may have the normally required $100,000 or EUR 100,000 to invest into a real estate project, but many more investors may have $10,000 or EUR 10,000 to participate. This opens up the market to new types of investors for the real estate developers and it will become easier to finance good projects.
It also allows a much higher percentage of the population to participate in real estate investments and develop a more professional investment strategy to diversify and protect their savings over the years. This is called "democratization" of real estate.
With the DigiShares
white-label platform, real estate developers will get a structured platform that enables them to expedite and manage processes related to financing, refinancing, or selling real estate development projects. In addition, they will be able to efficiently and consistently manage a group of owners of a specific project with all that entails - the maintenance of the share cap table, the facilitation of shareholder meetings, the payment of dividends or interest, and the reissuance of lost tokens, etc.
If you are interested in learning more, please contact DigiShares at [email protected]
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