Blockchain Is Making Investments in Real Estate Simpler, Faster, and More Scalable
MIAMI,, FL, USA, March 28, 2022 /EINPresswire.com/ — You can't read about investing very long these days without coming across some reference to Bitcoin or some other form of cryptocurrency. Even investors who are not all in on the cryptocurrency market, however, benefit from blockchain for making other kinds of investments. Here is the take of real estate and blockchain maven Hernando Fernandez on this topic.
Blockchain Is Making Real Estate Transactions Easier than Ever
Real estate, especially commercial real estate, has notoriously high barriers to entry. Capital requirements are high and, making matters more complicated, not all investors have access to the same information. Off-market transactions are available to the well-connected, with the result that the pool of investment opportunities for investors who aren't in the loop is even more limited.
Real estate is also illiquid. Real estate generally isn't owned in shares. When it is, the market for shares is usually small.
Blockchain, Hernando Fernandez advises, offers a solution to all of these challenges. Blockchain provides a centralized system for information as well as for value. Anyone who is part of the network has access to all of the information.
Blockchain data are not owned by any single entity. They are transparent. They are immutable and tamper-resistant. Investors can place extremely high
confidence in blockchain.
How Hernando Fernandez Sees Blockchain Changing Real Estate Investment
The full impact of blockchain on real estate is still to come, but Hernando Fernandez sees several ways blockchain will revolutionize real estate investing.
As data become more available, investors are likely to be more open to crowdfunding. Capital requirements and ownership liabilities fall. More investors can participate in the deal. Investors who cannot take on a deal alone can become majority investors, allocating funds to balance their portfolios.
Fractional shares pave the way for fractional ownership. Of course, fractional ownership is not a new idea. It has always been possible to sell a single property to more than one person. Blockchain opens ownership possibilities to a much larger number of participants.
How Is Blockchain Being Used in Real Estate Investing Right Now?
Hernando Fernandez is quick to confirm that there are no known real estate transactions that have relied entirely on blockchain, but there are many current real estate investment transactions that incorporate blockchain.
Smart contracts, for example, are automatically executed when predetermined conditions are met. These contracts have conditions imbedded into their blockchain that specify these requirements. When the first set of conditions is met, a new set of instructions is activated, and so on, until all funding activities are complete, and the contract can be executed.
The real estate platform Property Club employs blockchain to help subscribers identify, buy, sell, market, and finance commercial real estate deals. It uses smart contracts to facilitate transactions, and Bitcoin to make payment. Realblocks uses blockchain to make fractional shares available to investors. ManageGo uses ledger-based software to help managers make timely responses to repair and maintenance requests.
All of these systems, Hernando Fernandez points out, eliminate the middleman. They reduce fees. They are also unregulated and should be used by the uninitiated only with expert advice.
Caroline Hunter
Web Presence, LLC
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