Few factors we need to keep in mind while tokenizing Real Estate
riyasteve last edited by
- Type of real estate (income-generating, development space, investment properties, etc.)
- Type of Structure (Fund/Special Purpose Vehicle (SPC) or a hybrid)
- Ratio of Tokenization
- Liabilities on the Property
- Appropriate Smart Contract for automation
- Federal & State Regulatory and Tax requirements
- Keeping Track of the records of token holders
- Reporting Obligations including Re-sales
- AML/KYC & Investor Accreditation requirements
The tokenization of real estate asset is highly complicated and requires cutting-edge technology such as blockchain and smart contracts. Currently, Real Estate Investment Trusts (REITs) are publicly listed and provide liquidity to the fund, but they are expensive for retail investors. Some REITs have a minimum entry for investors at $25,000 or higher. However, tokenizing might give retail investors to hold $10 worth of tokens of top buildings like the Empire State Building.
In addition to real estate, we could see many other illiquid assets that are too costly to trade become liquid through tokenization. Blockchain App Factory is at the forefront of Security Token Development, equity token offering, Tokenized asset offering, STO Marketing and Tokenization of any illiquid asset.