BitCasas, the New Way to Invest in Real Estate
When George Bailey, our main character in It’s a Wonderful Life, played by James Stewart, responds to a run on the bank and says that the banks’ money is not in the bank, it’s in the houses of all the people in the town who otherwise would not be able to own their own home, it’s an iconic scene which serves to remind us of the power of combining the savings of individuals and lending them to others. Today we see the role a centralized bank plays in lending as increasingly disconnected from the community with new models of self-sufficient crowdfunding emerging with improved value for both borrower and lenders — lending by the community to the community.
Recent questionable bank behavior has given us insight into the minds of those running our financial institutions. Their priority seems to be returns at any cost, and not doing the right thing of balancing returns with delivering equitable services to customers and community. Many of us know someone who lost their home in these last years while trying to workout a deal with their lender, and very few changes have occurred since the 2009 Great Recession.
Enter Blockchain, a disruptive alternative to our traditional institutions that will allow alternative lenders to fuel mortgages that make home ownership possible for millions of Americans. What blockchain makes possible that centralized technology did not allow previously is the tokenization of real-world assets within a decentralized platform — said differently not one institution needs to be trusted, instead trust is placed on community oversight (this is the “trustless” feature of blockchain).
BitCasas utilizes Blockchain’s ledger system to split up the ownership of home mortgages into tokens, creating easily digested bits that allow the middle class, ordinary citizens to own a piece of the real estate action — owning a bit of casas (houses). Also, in the process improve on bank/institutional investor policies of restructuring mortgages with the community in mind.
BitCasas’s proprietary underwriting algorithm and Blockchain’s community underwriters are the keepers of the system, supplying a variety of mortgages to invest while taking into consideration factors banks do not focus on. Lenders (individual investors in the tokens) earn money both through dividends, paid as interest on the mortgages, and also by holding and later selling the tokens, as the value of the tokens goes up as the company grows. One can think of owning tokens as being similar to owning stock. Owning one share of Apple’s stock is a way of having a small piece of company ownership. One share is not considered a major stockholder, but none-the-less, a part-owner of the company.
George Bailey may have never imagined the internet or blockchain, but he understood the power of the community and that the trust they have in each other is much stronger than a centralized bank could offer. Join our mortgage investing community at BitCasas.io.
Written by Sandra Winkler, Marketing Content Writer for BitCasas, and Editor of IEEE SF Bay Area Council’s eGrid.
