The Coming Crypto Wave
- Tokenized Real Estate
- Fractional Ownership
Blockchain A blockchain is a computerized data structure that is, typically, distributed and replicated across many computers. Each entry is validated before being added and any changes must be validated by a consensus of "miner" before it can be changed, or added to the blockchain. Because of this required consensus and replicated across many computers, blockchain records are considered immutable.
NFT
Fungible Crypto
Tokens
Tokenization
Tokenized Real Estate
Not Legal
Until that hurdle is overcome buying tokenized real estate is the functional equivalent of buying a deed to the Brooklyn Bridge from a con artist.
To quote PT Barnum, "A fool and his money are soon parted."
Fractional Ownership
Case Study
Reality
Fraud Every experienced real estate investor knows that fraud is rampant in the real estate investing world. Knowledgeable investors always follow through on rigorous due diligence to make sure that:
1) The person offering the deal actually has the right to sell the property. 2) The property is where the seller says 3) The property is substantially in the condition the seller says
If you don't know these three foundational pieces, you should never close a real estate deal.
It is probable that RET was taking a page out of the fictional "Producers" handbook (based on the hit play and movie) and were selling the same properties they didn't even own multiple times. If they weren't there was certainly nothing to prevent them.
Gone With the Wind One last thing to remember with a crypto deal. This isn't like a credit card purchase, or even writing a check. When you close a crypto deal the funds are instantly transferred and you can't cancel the transaction once its done.
Neither banks, law enforcement, nor regulatory agencies can get your money back for you once you have transferred it from one crypto wallet to another.
And, the owners of the wallet you sent your money to, aren't easily found out.
Conclusions The crypto wave is coming to real estate investing. When the legal standing of NFTs for real estate are sorted out, the opportunities will be amazing. However, then as now, you must protect yourself from fraud. No one else will do it for you.
Until the legalities get sorted, I strongly suggest you stay away from Tokenized Real Estate and Fractionalized Tokenized Real Estate.
If you can't resist the allure, just send me your money instead. At least you will get the truth instead of totally wasting your money.
Tom Sheppard The Savvy RE Investor theSavvyREInvestor.com
Unless otherwise noted, all blog entries are written by Thomas Sheppard.
(c) Copyright 2017 A+ Results, LLC.