BRITE Investments
Feb 25 · 5 min read
BRITE Investments | brite.us

Small investors have traditionally faced serious limitations when it comes to investing in residential real estate. The investment amount is usually large, which acts as a financial barrier for them. (REITs are usually only restricted to commercial real estate.)

In addition, small investors have very limited knowledge about the right time to buy or sell (the right marketing conditions), which geographical locations globally offer the best investment opportunities at a given point of time, whether the valuation of a property is fair, whether the title is clear, and what could be the estimated costs of repairs and renovation involved if they buy?

Blockchain-Based Tokenization with Consulting Support

An innovative white-label blockchain-based crowdfunding platform built on top of Hyperledger DLT and harnessing the power of Smart Contracts is now set to eliminate these limitations.

BRITE platform enables the participation of small investors in flipping residential real estate, while also helping companies raise funds for promising and value-driven real estate projects.

BRITE distinguishes itself from other platforms by bringing together a host of ongoing consulting services along with a range of post-funding smart contract-backed features to empower small investors with the information they need to make the right investment picks in residential real estate.

BRITE provides for greater privacy, reliability and security of the platform, while the investor’s funds are stored in a traditional financial institution, insured, off blockchain.

BRITE’s revolutionary solution enables small and large investors alike, around the world, to pool their funds together into a blockchain-based platform, while the company’s team of professionals does the job of picking the right residential home, validating its legal status and title, repairing or renovating it, re-selling it at the best price, and distributing the profits back to the investors.

This blockchain-based tokenization (issuance of digital shares) delivers the ability for small investors to participate in residential real estate investing with limited funds, and achieve higher returns in a secure and reliable environment with a complete peace of mind.

Transforming Residential Real Estate Crowdfunding

While traditional real estate crowdfunding has been around for a few years, a major challenge for small investors is that investments in these traditional platforms are highly illiquid and not really traded.

In other words, unless the property is sold, an investor cannot cash out if they have an emergency. While entry to such traditional platforms is alluring, exit is complicated, and investors do not have much control over their own money.

With the BRITE blockchain-based crowdfunding platform, residential real estate assets become tokenized, and provide a secure, efficient and low-cost pathway to fractionalize a high-value asset. As the number of tokenized assets grows on the platform, investors have an opportunity for best asset allocation.

Fractional ownership promotes higher trading activity, resulting in better price discovery, transparency, and value maximization for small investors in residential properties that have historically remained victims of poor trade because of the high unit costs.

According to market analysts, real estate is the most illiquid and incredibly large asset class ($217 trillion worldwide), which is now ripe for digital disruption with blockchain-based innovative platforms such as BRITE.

Outperform Other Platforms in a Global Marketplace

The BRITE platform eliminates the need for middlemen, enabling investors to engage in direct peer-to-peer (P2P) trade at the time of their choosing — within seconds. Geographical barriers are eliminated too because BRITE allows for tokenized residential real estate assets to be traded anywhere.

The foundation of the blockchain ecosystem lies in “openness”, and technologies like BRITE are bound to create a future where multiple inter-operable global marketplaces will enable 24/7 trade of tokenized properties.

The key advantages of tokenization over traditional approaches to trading in residential real estate include:

  • Anywhere, anytime trading
  • Decentralization of trades
  • Public accountability
  • Irreversible code
  • Selective transparency in transactions
  • Investor privacy and security
  • Enhanced liquidity
  • Greater market depth
  • Lower direct costs
  • Rapid settlements
  • Asset inter-operability
  • Automated compliance
  • Fractional ownership
  • Risk mitigation through distributed ownership
  • Self-custody

More Efficient and Faster Due Diligence

In residential real estate investing, proof of identity is still required in the form of physical documentation. This traditional approach increases the time and effort for financial verification and due diligence.

Third party service providers could be involved, costs are higher, and the risk of errors is higher too.

Blockchain-based platforms such as BRITE speed up the due diligence process by making use of digital identities. It reduces costs, improves efficiency, bolsters data security, and minimizes the risk of errors.

For instance, the digital identity of a residential property could embed key information such as the legal and financial status, tenant profile, vacancy rates, and performance metrics.

Blockchain technology will digitize sale and purchase contracts and authenticate home mortgages. Transfer of a property title will be streamlined and advanced security layers will be added too.

A digital identity will be assigned to all the parties involved, and each party can utilize just one application to digitally sign and send property documents using smart contracts that are blockchain-verified.

Digitally Managing a Property

In traditional residential real estate investing, one of the complex tasks is property management. A number of stakeholders are usually involved, including the landlord, tenant, property manager, and vendor. Properties are typically managed using physical paperwork or involving poorly integrated software programs.

When a single blockchain-based application is used to create smart contracts, it will enable the complete process of property management (from lease agreement finalization to cash flow management to filing requests for maintenance) can be performed in a fast, transparent and secure manner.

Based on the agreed smart contract terms in a residential real estate transaction, the contract would automatically trigger the release of rent payments to the landlord from the tenant as well as periodic maintenance charges to the designated contractor.

When the lease term is over, the smart contract would automatically transfer the security deposit payment back to the tenant.

Digitally Managing Property Titles

Physical paper-based property titles leave significant room for fraud and errors. (The American Land Title Association says that one in four titles is found to have some defect during the property transaction process.) Identified title defects make the transfer of a property illegal, unless the defects are corrected first.

To ensure the accuracy and authenticity of titles, property investors typically incur significant legal costs. However, title frauds still pose a threat to homeowners anywhere in the world. In 2015, losses related to title fraud in the US averaged $103,000 per case.

Blockchain technology has the potential to permanently eliminate title management risks by building immutable land title records in digital format. Title management would become simple and transparent, and minimize the need for title insurance.

Advantages of the BRITE Crowdfunding Platform

Because it is backed by blockchain and smart contracts, BRITE offers:

  • low costs of operating and accounting
  • increased security and trust for all parties
  • simplified investor pooling and portfolio management
  • easy dividend distributions
  • secondary market that provides exit opportunities to investors
  • investors have voting privilege proportionally to their holdings

Licensing a standalone platform from BRITE allows real estate companies to:

  • raise funds on their own terms, and in a jurisdiction of their choice
  • have full control of policies and finances in their hands

Speak to a BRITE Representative Today!

If you wish to know more about how you can fund your residential or commercial real estate project through BRITE white-label crowdfunding platform, give us a call at +1 321–558–6868 or visit us at brite.us today!

Digital Securities and Blockchain

Latest news about Digital Securities, Asset Tokenization, Fractional Ownership and technologies that use Distributed Ledgers

BRITE Investments

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Digital Securities - Tokenizing Assets & Equity

Digital Securities and Blockchain

Latest news about Digital Securities, Asset Tokenization, Fractional Ownership and technologies that use Distributed Ledgers

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