Berlin skyline
While many investors may have lost their appetite for real estate investing after the worldwide financial meltdown of 2008 - which was largely driven by real estate - it still remains one of the most stable and lucrative investments available. In fact, in almost every market, prices have fully recovered and surpassed their 2008 levels. This again shows just how stable an investment real estate can be when it has the resilience to recover from such an event so quickly. But there are many barriers that exist for someone hoping to get into real estate investment.
For instance, it is a capital intensive investment. Whether you’re using liquid assets or leveraging assets through loans, there is always a high amount of capital involved in real estate investments. In addition to this, there is a steep learning curve for anyone wanting to get into the space.
Where other investment vehicles such as stocks, mutual funds, and even venture capital will have advisors or managing partners to help guide the way through the process of investing, real estate is a field where a select few seem to hoard the majority of the knowledge. Thus, you have thousands of “gurus” and experts who travel the world selling seminars on how to get rich quick using real estate.
But what about the typical investor who wants to make a smart investment, isn’t hoping for a get rich quick scheme, but also doesn’t have the time to manage properties or the capital to purchase a building by themselves?
That’s the major gap that Realisto saw and that they plan on helping solve. And they’re doing it with the blockchain.
Democratizing Real Estate Investment
“Real Estate is often tied to who you know in the industry,” explains Rouven Rosenbaum, the CEO of Realisto. “And many people don’t have the necessary connections or network to take full advantage of the opportunities that exist.”
To help mitigate this barrier for typical investors, Realisto is launching a platform that will allow expert Real Estate investors to post an opportunity on their marketplace and allow anyone, anywhere to invest in that opportunity. Which is where the blockchain comes into play.
Removing Artificial Barriers
“The other major issue we saw was that markets are developing at different rates all over the world. For instance, most people aren’t aware of our own local market here in Berlin,” says Rouven. “Because of the wall that stood for over 40 years, Berlin didn’t become the capital of Germany until 1999. And since 2011 the real estate market has been on a massive bull run. But still it remains one of the most affordable European capitals when it comes to real estate. But how is an investor in the US or Asia supposed to find out about this dynamic?”
Realisto provides the platform for discovery of potential investments like the one Rouven described in Berlin, and then allows for anyone in any market to take part. Which then brings up another feature of Realisto: using cryptocurrency for investments.
Using the blockchain and cryptocurrency allows anyone on the Realisto platform to pool their investments using one standard currency and gain returns in that same currency. At which point, each investor would be under their own country’s laws for taxation. But it would allow them to take part in investing all around the world.
In addition to facilitating the monetary aspect of investing, the blockchain can also help with trust. Because it is a distributed ledger that cannot be artificially manipulated, the blockchain will help ensure that the agreements for these investments will be executed with legal backing and smart contract efficiency. And the validity of the projects can also be vetted and stored on the blockchain, thereby reducing fraud and scams.
All in all, the opportunity for disruption in the real estate industry is massive. There are companies being started every day that are looking to leverage new technologies to enhance this legacy industry. And the blockchain and Realisto are in prime position to be that disruption in the investment space.
Realisto will be holding its ICO, or Initial Coin Offering on November 15th. You can find out more about them on their website here.