Technology has been at the forefront of almost every ground-breaking evolution that we’ve experienced in our lifetime.
Cell phones connect us across distance and time zones… Electricity lets us stay productive all day and night… Cars get us from point A to point B faster than walking or riding a horse ever could… The Internet since its inception has completely changed the world as we know it.
Now the time has come to revolutionize the way we own our property — and the Real Estate process in its entirety— through Blockchain Technology.
Revolutionizing Property Ownership
We often talk about how great it is to have your own “piece of paradise” here at Caribbean Capital Group – especially in a place as beautiful as Belize. But the same goes for wherever you might be in the world.
Who hasn’t dreamed of being a homeowner? Or an apartment or building owner? Owning property is a big dream for so many of us. Syndicated real estate gave us the opportunity to own “pieces” of property through investing. It let us become stakeholders in deals that were not usually accessible without massive amounts of capital and connections.
So what happens when you bring together syndicated real estate and a technology like Blockchain? True ‘democratization’, or “making something available to everyone”.
Democratization is a trend that has made a huge impact in the investment market, as seen in alternative investments through apps like Robinhood. It’s now making its way to change the way we invest in Real Estate. Here’s how it works…
Tokenizing Properties through Blockchain
Buying real estate can be a long-winding, tedious, and tricky process. You’re dealing with multiple stakeholders like banks, local governments, and insurance agencies at one time. It’s why you go to experts to help guide you through the process— and if you’re looking to invest in the Caribbean, you go to us!
As helpful as these stakeholders can be, it comes at a cost. All these middlemen require a fee. Most importantly, they need to sign off on your transaction at each step before you can move forward. So how would Blockchain change this process?
If you were to tokenize a house, you would put all the traditional deeds in a smart contract, and attach it to a token. From the ledger behind the token, you could see the ledger of ownership that was traceable back to the beginning of records.
According to a recent Deloitte report, Blockchain in Commercial Real Estate: The Future is Here, sellers and intermediaries (such as brokers, agencies, and lawyers) would all have access to the historical data for the specific property. No more entering data in multiple places, multiple times— or rebuying title insurance every time a property traded hands.
Syndicated Investments and Tokenization
Smart contracts in blockchain platforms allows real assets to be traded like cryptocurrencies like bitcoin and ether. Which is why syndicated real estate goes hand in hand with tokenization.
Much like syndication, a property can be separated into “pieces” through tokenization. The barrier to entry is once again reduced along with the fractionalization of investment amounts needed to participate in these tokenized real estate deals. That’s true democratization!
Historically, investors required a vast amount of money to be involved with syndications and in some cases, accreditation. Now with tokens, people can invest at much smaller amounts to help build their wealth faster.
Another benefit of tokenization is that investors can move in and out of positions without having to stay locked up for years and still make profit. For example, rent is collected on a monthly basis but earnings are distributed on the daily. Owners can receive earnings on their property up until they sell and trade their tokens.
If you’d like to learn more about crypto or investment opportunities, feel free to reach out or schedule a call.