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How U.S. Real Estate Investors Can Use Crypto Currencies for Investing

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Huge news for anyone in the crypto space as reported by Forbes.com. Crypto may very well be the way of the future and real estate may have just made it’s first official nod towards being tokenized as a way of providing new methods or alternative ways of financing new projects for investors in real estate.

There is a new luxury condo development in Manhattan that’s blazing the way for tokenization by getting a place on the worldwide Ethereum blockchain. The new building sits at 436 and 442 E 13th Street in the East Village and has 12 1700 square foot units.  The property isn’t cheap either, it’s been appraised for more than $30 millions USD and is the very first major asset in Manhattan that has even been tokenized on Ethereum. 

The broker of the deal, Ryan Serhant also happens to the star of Million Dollar Listing on Bravo and the author of Sell It Like Serhant, which has been a best seller. He says that tokenizing the property removed the usual pressures of normal bank financing options, which is better for stakeholders of the project and the project itself.  He says that the real estate market in the area is always strong, but like any real estate deal (especially those with such a hefty price tag), it can take time to find the right buyers who are willing to buy the new construction at the right price.  He seems to think that tokenization is the way that a lot of real estate developers will start to go because of the added ease and benefits it can offer over more traditional methods. 

Tokenization is still very new and some may still be confused about what it is and how it works.  Basically tokenization is a way to represent ownership of assets in the real world on a digital blockchain.  Two companies have recently joined forces to be able to offer this new method of financing.  Fluidity, and Propellr are both in the game of providing services and compliant products for the transfer, creation and distribution of digital securities.  These new digital securities differ from the traditional securities framework and structures, because they have failed to evolve and keep up with the new digital security framework.  Those who are rallying behind digital securities say that these types of securities can offer a trustless and transparent ecosystem that is only going to keep evolving and growing.  They offer liquidity and traditional securities can’t. 

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These two companies may be able to really change the way we do things going forward.  Propellr is a servicing, management and creating platform for assets that are held digitally.  Their parent company is the FINRA registered broker dealer, Propellr Securities.  They are planning to sell both traditional and tokenized securities as more and more of their capital markets start turning to crypto currencies and other digital assets. 

The other company is Fluidity, which created AirSwap and will be able to offer securities and accept fiat payments due to their institutional partnership with Propellr.

Funding for Real Estate Projects

This is a landmark deal that is showing that all of this technology is the real deal.  The various ways that tokenization can be applied in the real world and the various uses for tokenization are astounding.  If this technology can be optimized and if companies can partner with the right entities, it’s a very real likelihood that we are going to see more and more real world assets online and tokenized.  Real securities will be liquid, which is a major change from traditional securities.  We are just getting started and it will be fascinating to sit back and watch to see what’s coming next. Bloomberg video: Blockchain takes Manhattan

If you have more questions about this Real Estate topic, send them to us

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Fulton Abraham Sanchez, CPA

Fulton Abraham Sánchez, CPA is a Certified Public Accountant, specialized In Tax Planning, International Business, Wealth Management and Offshore Banking. You can email him to fa@fascpaconsultants.com or follow us on Facebook : FAS CPA & Consultants.

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