The real estate industry is one of the largest in the world, especially because it has to do with key economic and social features such as buildings, offices and houses for human habitation and shelter. The industry boasts of an annual transaction volume of over $1 trillion USD with a forecasted revenue of approximately 535 billion U.S. dollars by 2022.
While the financials are great to look at, the industry has experienced its own fair share of drawbacks, especially for investors.
For starts, the high cost of securing proper expert advice and recommendation for investing in real estate assets is a huge bottleneck to the industry's growth. Direct investors in real estate assets have to checkmate areas involving financial and technical due diligence, arranging mortgage, managing property administration, tax planning, legal set-up, documentation and finally terms of execution with local authorities and land registers, before going ahead to establish these properties. Sometimes, the completion of legal documentation might require the physical presence of the investors, which requires more spending on transportation, especially if they're far away.
There is also the occasional costs of maintenance and need for renovation of real estate properties as time passes.
For indirect investors (investors who do not invest into assets directly but in the expertise of real estate asset managers and professional investors), the risks and minimum investment requirements are lower, but there are still some restrictions. Indirect investment options do have lock-up periods to manage liquidity issues in case of high redemptions. Funds and property companies are fully managed by managers and do not allow for any personalization by the investor himself. Some discrepancies and conflict of interests between investors and management company may arise, especially considering the excessive success fees some firms cut off from the investors' profit with every deal.
There are tons of advantages in real-estate investments, whether it's direct or indirect, and i think that with Blockchain technology, some of these advantages can be amplified as well as the disadvantages minimized or totally dealt with.
Meet CROWDLITOKEN
CROWDLITOKEN represents an evolution in the world of financial assets. For the first time, it is possible to directly invest into an individually selected, tailor-made real estate portfolio that is at the same time tradeable, liquid and fully regulated. CROWDLITOKEN is a showcase for the digitalization of asset classes which are illiquid by nature such as real estate. The concept finally brings the universe of investment products into the digital age on a fully compliant basis.Src - Whitepaper
The CROWDLITOKEN project was launched by CROWDLI AG, a Swiss company that runs a peer-to-peer crowdfunding platform. It provides investors co-ownership rights on highly profitable investment properties in Switzerland. Investors will be registered as the owner by their respective share in the land register. The CROWDLITOKEN team is headed by CEO Domenic Kurt, and is comprised of professionals in real estate, finance, legal, compliance and marketing with innovative, lateral thinkers and strong, well-connected entrepreneurs. Since CROWDLITOKEN's market entry in January 2017, over CHF10 Million has been placed over three properties so far, which is really impressive.
CROWDLITOKEN aims to implement blockchain technology into real estate investment so as to combine the advantages in direct and indirect investment in real estate and make it easier for investors to tailor their portfolio according to their taste. How it works is pretty simple.
CROWDLITOKEN will bring digitalization and innovation into the world of crowdfunding by issuing a digital bond linked to real estate. Investors can tailor their own portfolio of European core real estate properties by buying these bonds to get a stake in the property. The digital bond will be tradable, bankable and is fully compliant and regulated. As these digital assets/bonds appreciate in value, investors can profit from the stream of income, as well as benefit from a minimum guaranteed interest rate of about 1.25%-3.00% per annum.
In the following articles, i will explain in more details the value proposition in CROWDLITOKEN, as well as better explain the benefits it holds for investors.
For more information, check out the official website and materials with the links below