Existe una nueva tendencia en la digitalización de activos inmobiliarios

Esta tendencia está siendo acelerada por el auge de tecnologías como blockchain.

La revolución blockchain

Blockchain ha supuesto una revolución tecnológica durante los últimos años, desembocando en un auténtico “boom” de proyectos basados en criptomonedas. De hecho, se suele confundir los términos blockchain y criptomonedas, cuando hablamos de estos proyectos, aunque si se mira con más detenimiento, descubrimos que son dos términos bien distintos, aunque relacionados. Blockchain es la tecnología subyacente, en la que se basan las criptomonedas, pero que tiene posibilidades que van mucho más allá de las mismas.

La tecnología Blockchain y la industria inmobiliaria están llamadas a congeniar a la perfección. Por ejemplo, la tecnología blockchain puede usarse para almacenar, de forma segura, un registro de propiedad de terrenos o inmuebles, asociarle documentos (como contratos o avalúos) e incluso desarrollar un contrato inteligente que permita ejecutar acuerdos de alquiler. Los beneficios son la seguridad y la transparencia para todos, así como velocidad y eficiencia, debido a la reducción de intermediarios en el proceso.

Blockchain hace posible dividir una propiedad en partes más pequeñas y emitir estas partes como certificados digitales (“tokens”) a un grupo de inversores inmobiliarios. La posesión de los tokens queda almacenada de forma segura en una base de datos descentralizada, virtualmente imposible de hackear.

Si analizamos el mercado inmobiliario, nos encontramos con cientos de empresas de inversión inmobiliaria fundadas durante los últimos 5 años. Por ejemplo: Fundrise, RealtyShares y PropertyPartner, entre tantos otros. Todas estas compañías ofrecen a los inversores una forma sencilla de invertir en proyectos inmobiliarios.

Conocemos muy bien los pros y las contras de este mercado, porque en 2015 fundamos una de estas compañías nosotros mismos.

Además, vemos cómo se están produciendo cambios en el sector: inversores con más conocimiento y experiencia, menos confianza en ‘instituciones establecidas’, nuevas y disruptivas tecnologías y toda una nueva hornada de compañías relacionadas…

Nos preguntamos a nosotros mismos estas preguntas hace dos años: “¿Qué será lo siguiente? ¿Cómo podemos ofrecer un servicio basado en el sector inmobiliario que otorgue a los usuarios independencia financiera, más flexibilidad y en definitiva más libertad (financiera)?”

La respuesta es, como te puedes imaginar, BrickEX.

BrickEX hace de la inversión y el “trading” inmobiliario tan sencillo como si lo hicieras con acciones o como si compraras y vendieras criptomonedas en Coinbase.

Pero, ¿por qué deberías invertir en el sector inmobiliario usando BrickEX en lugar de otros métodos alternativos?

BrickEX otorga al inversor los siguientes beneficios:

Liquidez — esta es una de las características principales de BrickEX. Normalmente, toma mucho tiempo vender propiedades inmobiliarias. ¡Pero nosotros estamos cambiando esto!. ¿Cómo? Creando un “exchange” inmobiliario con gran volumen, provisto por un pool de inversores globales. Imagina poder vender tus inversiones inmobiliarias tan fácil como vender acciones de una empresa.

Venta fraccionada — dividimos (tokenizamos) una propiedad inmobiliaria en partes más pequeñas para facilitar su intercambio.

Acceso — el inversor medio en el sector inmobiliario no tiene acceso a invertir en grandes o importantes proyectos, puesto que son excesivamente caros. Al fraccionar las propiedades, facilitamos el acceso de inversores a propiedades de alto nivel (y precio).

Diversificación — una de las reglas clave en las inversiones en el mercado inmobiliario, es la de diversificar tu riesgo entre al menos 10 propiedades bien diferenciadas. En la práctica, esto no es posible para una gran mayoría de inversores. Sin embargo, al fraccionar propiedades, un inversor tiene un acceso más sencillo a la diversificación de su inversión.

Transparencia y seguridad — todas las transacciones quedan registradas en un registro global mediante tecnología blockchain, que es fácil de verificar.

Administración de activos profesional — todas las propiedades listadas en BrickEX son manejadas por administradores profesionales. Estos administradores asumen todo el mantenimiento y la gestión de inquilinos. Es importante que una inversión inmobiliaria se gestione, por parte de los inversores, como lo que es: una inversión y no como una casa.

¿Qué es BrickEX y cómo funciona?

BrickEX es un “exchange” (casa de cambio) que facilita el acceso a la oferta y la demanda de fracciones de propiedades inmobiliarias. Todas estas fracciones (acciones) pueden ser comercializadas en BrickEX y están respaldadas con activos inmobiliarios reales. Pueden ser hoteles, bloques de apartamentos, torres de oficinas u otras formas de generar inversión en el mercado inmobiliario.

Funcionamiento de BrickEX paso a paso, para inversores

BrickEX ofrece un lugar único con cientos de propiedades de distintos proveedores.

Estas propiedades deben pasar un proceso de diligencia debida, antes de aparecer listados.

Una vez aprobadas, las propiedades se dividen en fracciones. Por ejemplo, un bloque de apartamentos de $10.000.000 puede ser fraccionada en 100 partes de $100.000, o bien en 100.000 partes de $100 cada una. Cada una de estas fracciones será única y queda registrada en la blockchain.

Ahora, ya tenemos listada una propiedad en BrickEX.

Cualquier inversor interesado puede revisar el registro de órdenes de compra/venta, el histórico y evolución de precios así como la localización del activo desde la propia plataforma.

Los inversores pueden poner una orden de compra o venta, el número de fracciones (tokens) a operar y el precio de compra/venta que consideren.

Si la orden de compra/venta se completa, el usuario recibe una notificación, y podrá comprobar el estado de su operación en su panel de control de la plataforma BrickEX.

Hasta ahora sólo hemos hablado de los mayores beneficios para inversores aportados por el exchange BrickEX.

Pero ¿qué hay sobre los proveedores de propiedades? ¿Por qué deberían los proveedores utilizar BrickEX?

Esta es una buena pregunta. Para que una casa de cambio funcione correctamente, necesita aportar beneficios a ambos lados, que representan la oferta y la demanda. Esto es algo que tenemos en cuenta desde el principio.

Primero, identifiquemos a estos posibles proveedores de propiedades para la plataforma BrickEX:

Promotoras inmobiliarias como Metrovacesa

Family offices (grupos inversores)

Fondos de inversión tradicionales

Proveedores de propiedades “tokenizadas”

Estructuras REIT (en español Socimi)

Dueños privados de propiedades inmobiliarias

¿Por qué deberían estos proveedores trabajar con BrickEX?

Acceso premium — imagina que tienes un bloque de apartamentos a la venta en París por $100.000.000. El proceso de venta habitual, pasaría por buscar brokers inmobiliarios que trabajan con un limitado número de potenciales clientes, debido al elevado precio de la operación. Además, es de esperar que el precio de venta se acerque mucho al precio actual del mercado, puesto que es un mercado muy pequeño.
Ahora imagina poder segmentar este bloque de apartamentos en 100.000 fracciones más pequeñas, con un precio por fracción o token de $1000. Es perfectamente plausible que el inversor esté dispuesto a pagar una pequeña tasa premium por poder acceder a este mercado exclusivo, que de otra manera le estaría vetado. Así pues, a un inversor se le aplicaría el precio de $1050 en lugar de $1000. Estos $50 de diferencia es lo que llamamos “acceso premium”, la cantidad que un inversor está dispuesto a pagar para poder acceder a inversiones de una calidad superior. Este “acceso premium” puede llegar a suponer unos ingresos adicionales de hasta $5.000.000 para el proveedor de la propiedad.

Liquidez premium — los tokens del ejemplo mencionado más arriba, estarían disponibles para la compra/venta en la plataforma de intercambio (Exchange). En una plataforma de este tipo, requiere que los intercambios se produzcan de forma rápida y eficiente. Ventas rápidas implican mayor beneficio para los dueños de los tokens, porque así saben que si necesitan vender su token por cualquier razón, lo pueden hacer sin problemas en cualquier momento.
Los inversores están dispuestos a pagar una tasa sobre el valor del token a cambio de esta liquidez. A esta tasa la llamamos “liquidez premium” y debe entenderse como una tasa distinta de la anterior.

Venta fraccionada — al fraccionar propiedades, ofrecemos la oportunidad de que un proveedor venda sólo la parte de una propiedad que necesite, sin estar obligado a vender el 100% de la misma, solución que el mercado no ofrece actualmente.

Velocidad — vender una propieda en fracciones a través de un exchange que no requiere de intermediarios como abogados o notarios es significativamente más rápido que el proceso habitual.

Menos intermediarios — el dueño de una propiedad sólo necesita comunicarse con BrickEX para poner a la venta sus activos. De esta manera, necesita hablar con menos intermediarios, lo que supone una simplificación considerable del proceso.

Beneficios asociados a la industria
Hemos cubierto los beneficios de la oferta y la demanda de propiedades en un exchange. Pero hay además beneficios relacionados con la propia industria, al mover el trading de propiedades inmobiliarias a una tecnología como blockchain.

El valor global estimado del sector inmobiliario está comprendido entre los $217-$250 trillones. Actualmente, sólo el 1% (aproximadamente 2.5 trillones de dólares) son comprados/vendidos anualmente, y cero (0%) de estas operaciones se están realizando sobre blockchain.

Encontramos dos enormes oportunidades aquí:
1. Mover la compra-venta de activos inmobiliarios a tecnología blockchain (digitalizar activos)

2. Aumentar el volumen global de operaciones a través de una propuesta nueva y disruptiva como un exchange altamente líquido

El futuro es brillante

El objetivo de este artículo es compartir nuestra opinión sobre el sector inmobiliario, la compraventa de activos y los cambios demográficos/contextuales que van a acelerar la demanda de propuestas como BrickEX, entre otras razones expuestas, por el crecimiento de la generación “millenial” y su incorporación al mercado de inversiones, que requieren herramientas adaptadas a su época.

Jeroen de Leijer
CEO, BrickEX

Creemos riqueza a través de inversiones inmobiliarias, juntos.

La revolución blockchain was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.

What are three of the most important trends in society that we’ve incorporated into the vision of BrickEX?

1. People are starting to care less about ownership

People’s diminishing attitude of needing to own and control things is making room for enjoyment of access and having fewer things to stress about. We all know examples of companies that are being built on this change.

Some people go even further and aim to be completely flexible in terms of where they live and work. It may not even be the same place or even the same continent. I have worked with developers that work from a beachside location in Thailand.

2. People are wising up and gaining awareness

The free (digital) flow of information is increasingly making people question what is happening around them. The vulnerability of financial institutions and organizations fuelled by profit incentives should make you wonder how this could possibly affect you in the future.

3. Blockchain revolution

Blockchain has hit the world by storm over the last years, leading to a boom (and bust) in blockchain based crypto projects. People often use blockchain and cryptocurrencies to describe the same thing. However, when looking deeper, it is evident that this is not the case. The blockchain is the underlying and enabling technology for cryptocurrencies but the use of this technology is so much more.

Blockchain technology and real estate are truly a match made in heaven. For example, blockchain technology can be used to securely record ownership of a property or land titles, to hash and attach key documents (such as deeds and valuation reports) to a property and to develop a smart contract that executes rental agreements. The benefits are security and transparency for all, speed and efficiency because lesser intermediaries are needed for transactions.

Then there’s the impact of the reasons mentioned above on real estate investing.

There are numerous projects that are based on providing access rather than ownership. Think of access to cars, tools, holiday homes etc.

When we zoom in on property investing, we see hundreds of companies that were founded over the last five years. For instance: Fundrise, RealtyShares, and PropertyPartner to name a few. All these companies are offering investors an easy way to invest in the commercial real estate.

We actually know the ins and outs because we founded one of those ourselves in 2015!

So we see changing attitudes, more knowledge in the crowd, lesser trust in ‘old established’ institutions, disruptive new technologies and an array of new companies…

We asked ourselves these questions two years ago: “What will be next? How can we offer a service with a focus on real estate that will give people financial independence, more flexibility, and ultimately more (financial) freedom?”

The answer is, as you may have already guessed, BrickEX. BrickEX will make investing and trading in real estate as easy as trading shares on the stock market or buying Ethereum on Coinbase.

But why should you invest in real estate through BrickEX instead of alternative ways?

BrickEX gives property investors the following real benefits:

• Liquidity — this is one of the core features of BrickEX. Normally it takes a long time to sell real estate. We aim to change that! How? We will do this by operating an exchange with large volume driven by a large pool of global investors. Imagine if you can sell your real estate investment as quick and easy as selling shares?
• Part sale — tokenized real estate will make it possible to just sell part of your building.
• Access — the ‘average’ real estate investor will not have access to invest in larger or more iconic real estate as they are too expensive. Part ownership will make it possible for investors to co-own a high-end high priced piece of real estate.
• Diversity — one of the key rules of real estate investing is that you have to buy at 10+ units to spread your risk. This is not possible for most. But spreading over a range of different fractions (from a pool of different property providers) is easy to do through BrickEX
• Transparency and security — all transactions are recorded in the blockchain and therefore easy to verify the transaction history
• Professional Asset Management — all the buildings that are listed on the Exchange will be managed by vetted professional asset management companies. These professional managers take care of all maintenance and tenant related manners. It is important that investment properties are managed as investment properties and not as your home.

What is BrickEX and how does it work?

BrickEX is an Exchange where supply and demand meet for shares/fractions in real estate. All the shares that can be traded on BrickEX are backed by real estate assets. This could be a hotel, an apartment block, office tower or other forms of income-generating real estate.

So how does BrickEX work for an investor step by step?

1. BrickEX aggregates the buildings of lots and lots of property providers.
2. These buildings are subject to a thorough due diligence process.
3. After approval the buildings will be split in fractions. For example a $ 10.000.000 apartment block could be split in 100 fractions of $ 100.000 or 100.000 fractions of $ 100. All these fractions will be unique and recorded on to the blockchain.
4. Now the building is listed on the BrickEX exchange.
5. Interested investors can check out the order book, price history, and location within the exchange. For more in-depth information, the exchange will link to a detailed website page that provides lots of information and documentation (also hashed in blockchain) about the property, about its owner and the asset management company and last but not least the financial performance of the property.
6. Investors can place an order containing the number of tokens to buy and the price they are prepared to pay.
7. Investors will be notified of a successful trade and they can see the purchased fractions (tokens) in their Investor Dashboard on the BrickEX Exchange.

So far, we have only talked about the major benefits for property investors brought by the BrickEX exchange.

But what about the property providers/owners? Why would they want to be part of the BrickEX exchange?

That’s a very good question. Every functioning exchange needs to have benefits for both the supply and demand sides for it to work well. We’ve kept this in mind since the very beginning.

Firstly, we see the following parties qualifying as potential property providers for the BrickEX Exchange:

1. Existing property (crowd) investment websites.
2. Family offices
3. Traditional property funds
4. Tokenized property providers
5. REIT structures
6. Private property owners

Why would these property providers work with BrickEX?

• Access Premium — imagine you have a $100.000.000 apartment block for sale in Paris. The sale process will go through specialized brokers that work with a limited number of potential buyers as the deal size is big. Therefore, you can assume that the ultimate sales price will be close to the actual market value (the market is smallish). Now, imagine this apartment block is for sale in 100.000 fractions (tokens) of $1000. It is entirely possible that the investor is prepared to pay a small premium for the mere fact that they can invest in (and instantly diversify) such a high-ticket investment. Perhaps the investors will pay $1050 instead of $1000. The difference, $50, is what we call ‘access premium’, the extra price an investor is willing to pay to have access to the investment. This ‘access premium’ will imply $5.000.000 in additional revenues for the property provider.
• Liquidity Premium — the tokens of the above-mentioned property will be available for trading on the Exchange. A well functioning exchange means that the trades are done quickly. Quick trades imply a major benefit for the token owners because they know that if they must sell for whichever reason they can do so quickly. Investors will be prepared to pay a premium over the token value if they know they can sell it quickly for near market price. This premium as result of a liquid exchange is what we call the ‘Liquidity Premium’ and has to be seen as separate to the Access Premium.
• Part Sale — fractional ownership will give property owners the option to only sell that part of the property or portfolio that is needed. This solution is not available to them at the moment.
• Speed — selling a property in fractions through an exchange that does not require intermediaries like attorneys or notaries will go a lot faster.
• Fewer intermediaries — the property owner only needs to deal with BrickEX to sell the property. By only dealing with BrickEX they need fewer

Industry wide benefits

We covered benefits for the demand and supply side of the property exchange. There also more industry wide benefits of moving real estate trading on to the blockchain.

The estimated global real estate value is somewhere between $217–250 Trillion. Currently about 1%, let’s say $2.5 T ($2.500 billion) is traded annually and zero % of this trade volume is traded over the blockchain.

There are two enormous opportunities here:

1. Move property trading on to the blockchain (digitizing assets)
2. Increase the global traded volume through compelling new and disruptive propositions such as a liquid exchange

The future is bright

The purpose of this article was to share with you what our thoughts are on real estate, real estate trading and the key demographic/contextual changes that are likely to accelerate the need and demand for propositions such as BrickEX, since the millennial group is growing older affecting ages above and below.

Jeroen de Leijer
CEO, BrickEX

Let’s build wealth through real estate investment together. Click the link below to join our community

https://discord.gg/esPPzj

How BrickEX is accelerating the trend toward digitalized, co-owned real estate investment was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.

Héctor Linares — BrickEX Lead Developer

The past few months have been consistently turbulent for the BrickEX development team.

This is especially based on our acknowledgement that Blockchain is both a new and complex technology, with a broad spectrum of different potential use cases and spheres of implementation.

Having said that, our objective is to be (and build) the first exchange platform for real estate assets that also accounts for third party providers. To be clear, this means that although several platforms exist that link real estate with Blockchain, our platform seeks to be the first that is fundamentally open for connecting with other third party property providers, including other Blockchain-based real estate platforms.

Achieving Proof of Concept

To achieve our planned development milestones and objectives, we recently needed to test what we have built so far in order to facilitate a first proof of concept. Specifically, we needed to test the principles of basic tokenization and asset trading within our exchange. Based on this, we have created our first product demonstration, which you can find here.

The past few months have been consistently turbulent for the BrickEX development team.

This is especially based on our acknowledgment that Blockchain is both a new and complex technology, with a broad spectrum of different potential use cases and spheres of implementation.

Having said that, our objective is to be (and build) the first exchange platform for real estate assets that also accounts for third party providers. To be clear, this means that although several platforms exist that link real estate with Blockchain, our platform seeks to be the first that is fundamentally open for connecting with other third party property providers, including other Blockchain-based real estate platforms.

Achieving Proof of Concept

To achieve our planned development milestones and objectives, we recently needed to test what we have built so far in order to facilitate a first proof of concept. Specifically, we needed to test the principles of basic tokenization and asset trading within our exchange. Based on this, we have created our first product demonstration, which you can find here.

As you can see in the video, the technology used, in conjunction with the product team behind it, has enabled a working proof of concept. Despite being at an early stage, we believe that this is a fundamental first step and promising result within the grand trajectory of the BrickEX vision.

A look under the hood

If you’re interested in the tech stack used at this point in our development roadmap, our architecture has so far been made up of: React.js, Symfony/PHP, RabbitMQ, C++, and Solidity.

With this relatively simple but secure architectural framework, my team and I are happy to have achieved the completion of proof of concept, thereby illustrating the potential for BrickEX’s vision to become a solid reality.

Our current endeavours

I believe that once a working proof of concept is in place, the next step is to look forward and develop an MVP (minimum viable product).

In our case, the developing of an MVP firstly consists of leveraging our partnership with the first crypt-exchange for fine art, Maecenas. Their exchange platform is market-validated, technologically-sound, and currently in use by art and crypto enthusiasts around the world.

Through our partnership, we have access to some modules of their platform engine. Integrating their modules into our own platform engine enables us to boost our overall development process, whilst saving lots of time on testing and debugging. With this in mind, we have recently redesigned the engine used for proof of concept, and have begun a new development process from scratch, whereby we incorporate both the lessons learned from the initial development, as well as the new modules provided by the Maecenas tech team.

A glimpse into the future

We’re happy to announce that our MVP is near completion, and that our team is working on several exciting features.

For the upcoming development phase, we are using a variety of different technologies, including Vue.js, .NET, C#, Symfony/PHP, as well as several cool Amazon tools.

In addition to the exchange, we are working on the tokenization and listing of properties, making it easier for both users and third party providers to use the platform.

Here are some screenshots of the current Alpha version:

The current status of the MVP is somewhere between 60–70% complete, and we are hoping to have a fully working MVP platform in early October.

Expect another BrickEX tech update soon!

Until next time,

Héctor Linares.

An update from the Brickex Tech team was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.

In this article, we explore the current and future states of the global real estate investment market, with insight into how technology is able to facilitate a shift within the real estate investment industry.

The emphasis is on the many hurdles and barriers that small-scale investors face when attempting to enter the world of real estate investing & trading as well as the untapped value for real estate owners and their access to a new form of liquidity, while it provides an overview of how BrickEX is able to solve these challenges.

What is the current state of the global real estate investment industry?

Before we offer a glimpse into what the future of real estate investment might look like, it is worth highlighting how the industry is constructed and deals with new technologies today.

Real Estate is the largest asset class in the world, with a value of $217Tr in total (Savills Report — around the world in dollars and cents). Of all of this value, only 1% changes hand each year.

This value is unevenly distributed, where the most substantial part is located in America and Europe, 50 and 25% respectively.

Although Real Estate is a popular investment class and even on small scale remains one of the most reliable ways for individuals to boost their personal wealth, real estate investment is complicated, convoluted and expensive. This makes it by far the most complicated investments category to analyze since there has never been an standard source of real estate pricing data.

“The cold fact is that one-third of the industry still runs on Microsoft Excel. Research shows that there is not only a lack of innovation, but also a lack of understanding of what innovation is and its potential impact on the industry.” (Industry news, real estate)

Why is this a problem?

Well, if we consider that the global real estate market is estimated to be worth trillions of dollars and only 1 % is being moved and transacted, there is a largest sum of illiquid assets sitting there on the balance sheets of corporations, investment companies or individuals.

Real estate has proven time and time again to be a successful long-term investment strategy. Due to its tangible nature, and in line with an increasing world population, real estate ownership is a secure and value-appreciating asset, providing a stable and lucrative return on investment for those who own property all around the world. Apart from value appreciation, real estate owners are also able to benefit from fixed income and monthly fixed returns through rental income.

Apart from real estate ownership, the trading of real estate, i.e. the buying and selling thereof, is a relatively safe form of investing one’s capital. Value appreciation, capital growth and gains both in the short and long term make real estate trading a viable and lucrative investment option.

With only 1% of the world’s property being traded, however, a comparatively small amount of people are granted the capacities to benefit from real estate trading and investing.

What are the entry barriers excluding so many people from investing in real estate?

Firstly, the world of real estate investment is comprised of increasingly-high ‘buy-in’ prices. Whether you’re an individual or an organization, if you’re looking to purchase or trade real estate, a large, concentrated sum of capital is required. Naturally, not every small-scale investor has access to this.

Secondly, even if an individual does have the required capital to invest into a piece of real estate, the industry is constructed in such a way that many ‘good’ or ‘lucrative’ investment opportunities are ‘locked up’ behind screens of high profile investor network or ‘old boys clubs’. This is especially the case with investment opportunities that sit outside of a person’s immediate periphery (country, city or neighborhood), where they don’t have the necessary know-how, connections or entry-ways to possible investment opportunities.

The third, and arguably one of the most important barriers to entry for small-scale investors into the world of real estate trading is that of liquidity. Due to the large, concentrated sum of capital that goes into real estate development in the form of brick-by-brick construction, investor money is often ‘locked up’ for a period of several years, rendering such capital as fundamentally ‘illiquid’ within that time frame. As I always like to say, “profitable real estate developments can’t pay for a new BMW if you need one”.

The fourth major characteristic of the current real estate market is that of commission fees and middle men. Current trading practices and local rules and legislation require a lot of administrative hassle, which in conjunction with third-party agents or “middle men” result in extensive costs that further decrease the net profitability of your assets.

The fifth and final barrier to entry that I’d like to emphasize is that of diversification.

Because the current real estate market requires sizeable investments and capital injections, it becomes difficult for investors to diversify their portfolios. This is especially the case for the vast group of ‘small-scale’ investors that would like to diversify their portfolios with real estate, but aren’t able to due to its almost-impenetrable nature.

To summarize, the current global market for real estate trading is marked by various barriers to entry that result in the limited access to investment opportunities for those looking to invest in real estate, with an emphasis on small-scale investors.

How can technology facilitate a shift away from this?

I envision that real estate will be digitized in the future: recordings will be digital, deeds transferred via the blockchain, and real estate assets will be tokenized.

Despite its colloquial ‘overkill’ within the emerging tech scene, the principles of Blockchain technology, in conjunction with that of ‘tokenization’, allow for the above-outlined challenges to be overcome.

For starters, Blockchain technology has resulted in the advent of smart contracts, which can have a huge impact in facilitating a shift towards a more equitable and accessible real estate industry.

A smart contract is an immutable program stored in the Blockchain, and run by all of its scattered nodes. This decentralized computing technique allows agreements between parties to be expressed in programming language and executed transparently without the need for a trusted intermediary.

If sensitive processes, from value transactions to ownership transfers are externalised as smart contracts, this creates a very high degree of transparency, trust and neutrality.

This is where the notion of ‘tokenisation’ comes in. This can be understood as the converting of an asset into a digital ‘token’; created, transferred and secured via immutable smart contracts.

If real estate assets could be ‘tokenized’ so that investment opportunities are represented as their own digital tokens, then investment deals and trading opportunities could easily be facilitated via smart contracts, as described above. This cuts out the traditional processes required for a real estate ‘deal’ to go through. In other words, when envisioning an inevitably ‘decentralised’ future, the combination of smart contracts and ‘tokenization’ within the context of real estate trading enables us to move away from the dominant reliance on notarized documents, lawyers, surveyors and banks. In their place, we’d have a more secure, less corruptible ecosystem of investment opportunities facilitated by smart contracts.

The missing piece in this equation is an exchange platform or ‘marketplace’ for tokenized real estate.

If a real estate exchange platform existed that could seamlessly connect real estate owners to investors, regardless of investment capacity or physical location, then we’d be several steps closer to a global real estate market that is not only transparent, but fundamentally accessible.

Enter BrickEX, a real estate exchange platform that enables anybody to trade real estate assets in the same way that shares are traded.

In an effort to solve the challenges and hurdles within the real estate market, and with a strong drive to ensure that real estate doesn’t get left behind in the move towards a ‘decentralised’ future, we’ve created BrickEX.

BrickEX is an open decentralized Real Estate Marketplace that enables fractional real estate investment and trading by means of asset backed tokens.

What’s our objective?

To create transparency, accessibility and liquidity for every real estate owner and investor in the world.

By building the envisioned ‘future solution’ in the way that I’ve described above, we’re addressing transparency and accessibility.

As a distinguishing factor in relation to our competitors, we’re also addressing the issue of illiquidity,

How does BrickEX solve the issue of liquidity?

Asset liquidity can be understood as the ease in which assets are able to be sold and converted into fully ‘liquid’ cash.

‘Liquidity discount’ is a well known phenomenon in the real estate space. Essentially, because large sums are required for certain real estate investments, the amount of capable (‘liquid’) buyers able to purchase real estate is limited. For example, if a property were on the market for $100M, only a small pool of potential investors would have the means to invest. This results in a ‘buyers’ market, whereby a real estate seller is forced to lower their price (and offer a discount), in that limited liquidity exists for buying the real estate in the first place.

How do we know this? Because the normal rental return on larger pieces of real estate is generally between 12–14%, whilst the return on a smaller real estate asset (of about $1m) sits between 7–8%, at least in the US and EU.

With BrickEX, an investment opportunity can be presented to a larger group of investors by means of our fractional ownership model. As a result, more ‘liquid’ cash comes into the equation, as the large capital sum required is dispersed between a multitude of investors. As such, the property seller is able to sell at a higher price, whilst investors are still afforded with very attractive returns. In other words, BrickEX facilitates that a real estate piece valued at $100M with a 12% rental return rate could be sold for $120M, with returns of 10% to the investor. For ‘small ticket’ investors, this return rate is still very appealing, whilst they circumvent the issue of liquidity in relation to the large asset. Rather than having to try and sell a $120M asset, they can simply sell their asset-backed tokens on the BrickEX exchange in real time.

Fractionalized Real Estate and Investor pools

Another way in which BrickEX overcomes the challenges posed to small-scale real estate investors is by means of fractionalized real estate and investor pools. Whereas traditional investor pools normally consist of small groups of individuals, each with large amounts of money, BrickEX empowers large groups of individuals to each contribute smaller amounts, such as $5.000 to $10.000. By means of a fractional ownership model, large investor pools are simpler to manage, easier to attract, and still satisfied with returns of between 7 and 9%.

Tokenization

By tokenizing a real asset, it is much easier to transfer a partial piece of ownership thereof to other investors. By tokenizing this, you don’t need to immediately sell off the full asset, but can make parts of the asset liquid.

Tokenization facilitates liquidity, by shortening the process of buying and selling real estate. Furthermore, by tokenizing real estate assets and distributing the tokens between a large group of investors, instant liquidity is created for a traditionally illiquid asset. The token can easily be used to sell small fractions of a real estate asset. It is tradeable, easy to move and affordable.

Tokenization therefore creates instant liquidity.

Conclusion

By applying the above-outlined principles, BrickEX is on a mission to help move the real estate industry into a new era: one where it is in leverages the latest technological opportunities. More than that, we truly believe that real estate trading and investment should be a far more accessible endeavour, enabling more and more people around the world to benefit from the financial prosperity that it can offer. This means moving away from traditional practices and the business as usual approach to real estate investment.

We’d love to have as many people as possible join us on this journey.

Please follow us on twitter: https://twitter.com/brickexio

Bas Bergmans
Founder

For more information please contact me personally on bbergmans@brickex.io

https://twitter.com/bbergmans

How could real estate investment become accessible for small-scale investors? was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.

BrickEX Ambition and where do we fit in the crypto start-up maze?

Recently we have seen an increased activity in the crypto — blockchain start-up world.

The start of 2018 showed a decrease in amounts raised by companies with an overall market that is growing (based upon CoinDesk data). Most companies leverage / require Blockchain and Cryptocurrency technology to disrupt the current market and economy where others don’t require this. Companies that don’t even need blockchain at all for their business probably see tokens as a good opportunity to raise funds (a new way of crowdfunding).

Companies that do require / leverage blockchain add value to the new economy by developing and delivering different blockchain initiatives.

In this article we will try to distinguish different categories of how blockchain can be applied and where we see BrickEX fit in the mix.

Infrastructure, Protocol and Ecosystem

There are roughly three types of blockchain initiatives: protocols, infrastructure and ecosystems.

Infrastructures

Infrastructure projects are those that plan to create something that can become a technological base for other projects. Usually, they are a type of tool or a group of tools. These tools can then be used to create other projects or propositions.

For example: Amazon AWS Cloud services is an infrastructure service. Other companies can use this to create other, new solutions.

Blockchain Infrastructure projects are popular. People and investors understand that new infrastructures are needed to develop new (blockchain based) systems.

Protocols

Protocols are a specific type of infrastructure project. These projects focus more on a very specific problem and try to create a solution for it. Protocols often are more a ‘set of rules’ and a ‘way of doing things’ than a full software solution. The example that everyone uses to exemplify this is the http/ip protocol (the set of rules that define how computers communicate).

Some very interesting projects in the blockchain are protocols for anonymous and decentralized internet, and others focus on Artificial Intelligence and how they should communicate between each other and other devices. A truly exciting new world is opening here.

Ecosystems

The last category: Ecosystems is my personal favourite and if execute properly a real alternative to improve and change how things are to be done (most well-known ecosystems are Ethereum and Bitcoin).

How do we define what an ecosystem really is?

An ecosystem is something more than an Infrastructure and is typically formed from multiple Infrastructures.

A well-organized ecosystem is one with clear definitions of all the Actors in the system and how they will interact with each other. So therefor a solid infrastructure must have defined Protocols. These Protocols can be real communication protocols or they can be API definitions that ultimately are some kind of alt-communications protocols.

Another key part of Ecosystems is that they must create their own Infrastructure. This Infrastructure will act as the core of the system where all the Actors will reside and where the rules of interaction between Actors are defined. This Infrastructure will use its own Protocols yet it is open to user other Protocols and even other Infrastructures.

Ultimately the Ecosystem must define how the system is going to work: actor roles, resources, rules that manage the system and of course who is the customer/user of the system.

Non-blockchain Ecosystems examples

Because most blockchain ecosystems are currently in development, a good way to understand them is using some examples of more traditional businesses.

Two perfect examples of ecosystems that are actually competing to be the ‘mobile ecosystem’ are Apple’s App Store and Google’s Play Store.

Mobile stores are great examples because they have actors: app developers, end-user customers, mobile companies/manufacturers and marketing teams; they have protocols: app development API, rating and comments system, push notifications API, etc. and they have infrastructures: mobile OS, SDK, app marketplace, push notifications servers and mobile ads services.

In the end, the ecosystem is not the app store at all but the whole ‘mobile ecosystem’. And of course, they define the rules that govern this system, the roles and the way they can interact between each other. The key difference with blockchain ecosystem is that this one is a centralized system.

Decentralized ecosystems

Finally we arrive to the most important concept, the crown jewel. Imagine the ecosystem that we have been talking about as a decentralized system. In other words, you define the system, create infrastructure and protocols, and create the rules and the roles for it, but in the end, the ecosystem is a ‘living thing’ that will operate by itself.

In decentralized ecosystems no one has the control. There is no admin role, like in Bitcoin and other crypto currencies. The system needs to have some consensus rules or at least, some self-management tools. The definition of these can be one of the hardest tasks to achieve.

Picture an ecosystem that defines a “rent your house or room to others” system. Yes, we are talking about the decentralized and ‘blockchained’ Airbnb. In this system, we have property owners and we have customers. Maybe we will include payment managers or ‘scrows’, who will be an intermediary between customer and owner, retaining the payment until the rent ends. We can include property sponsors role or other kind of marketing role. And in the end, we are only the developers, who maintain the code, but we don’t have control over the properties or the ratings in the system.

In decentralized ecosystems we won’t have an “Apple admin” who decides if your app can enter the app store or not. The system has its own rules, and your app will appear or not, based on the system mechanisms, most likely to include community rating or other forms of self-governance. The system is self-managed and no longer needs factors outside the community. Even the source code can be published as open source, and the ecosystem will not depend on the original developers forever.

ULTIMATE SUCCESS DRIVER

Key aspect here is that the Ecosystem does not rely on business revenue but on “system value”, these ecosystems and infrastructure projects can be the best projects to fund, from the investor perspective and from a more philosophical point of view as well.

Remember, the value is in the system (and probably in the token or coin that reflect this value) not in the income. With this in mind, crypto initiatives can fund true technological innovative solutions that the real world needs which transcend above companies whilst still making a good profit through an increase in token value.

The BrickEX Ecosystem Ambition

The ultimate BrickEX ecosystem will be just that: a decentralized and self-governing ecosystem for property investment and finance. BrickEX creates transparency, accessibility and liquidity for every real estate owner and investor. Our objective is to support seamless and instant transactions in real estate regardless of transaction type, size or location.

This new ecosystem will, with sufficient liquidity, completely change the way we live, invest and save.

To start this journey we are launching our Brick Token soon so we can continue to develop and market our platform. In its first phase BrickEX will manage due diligence, trading and KYC/AML, and slowly transition into a self-sustaining ecosystem.

Jeroen de Leijer

CEO BrickEX

www.brickex.io

https://www.linkedin.com/in/jeroendeleijer/

BrickEX Ambition and where do we fit in the crypto start-up maze? was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.

Global Real Estate Investment Reinvented

Jeroen de Leijer founder and CEO says, “the Exchange will be the stepping stone to a new Infrastructure and Ecosystem for Real Estate Funding and Financing paving the way for changes in the way we live, safe and invest.”

Real estate is the largest asset group in the world, but real estate investments are complicated, convoluted and expensive. With high return opportunities requiring large sums of money, advanced knowledge and sophisticated networks that most investors lack, it’s no surprise that real estate funds and investors continue to struggle with the lack of liquidity of large immobile assets on their balance sheet.

BrickEX solves these problems through an open decentralized real estate marketplace that creates transparency, accessibility and most of all liquidity for real estate owners and investors, regardless of their investment capacity or physical location.

The BrickEX Liquid Real Estate Ecosystem will form the basis for numerous new investing and financing propositions all to do with living, saving and investing.

Imagine if you could sell real estate as quickly as withdrawing money from your savings account. Would you still keep your savings in that 0% account? Or what about financing your house through BrickEX?

The same goes for property funds and owners. Instead of getting distracted by funding headaches, they can focus on what they’re best at.

BrickEX moves real estate investment onto the blockchain and aggregates real estate online through three functions:

✓ THE EXCHANGE — A real estate exchange that facilitates the trade of blockchain-based digital certifications for full or fractional property ownership.

✓ A DISTRIBUTION CHANNEL — A gateway that allows 3rd party real estate owners to market their real estate portfolios to a global investment community.

✓ AN INVESTMENT PLATFORM — A platform that enables investment in fractional real estate ownership.

BrickEX builds on its founder’s deep knowledge of real estate crowd investment and insights that have been gained from both founding and running brickfund.com as well as from experience of building a digital asset exchange.

Bas Bergmans Founder and CFO highlights the magnitude of the opportunity:

“$217tr is the estimated value of all real estate in the world, 1%, $2,17 trillion, is traded annually, 0% of these trades currently take place on the blockchain. Moving just a fraction of the value of annually traded real estate on the blockchain presents a huge opportunity.”

The BrickEX team and its advisors, represent an unprecedented level of diversified business knowledge, thought leadership in blockchain technology, real estate, cryptonomy and law. They are determined to reshape the real estate investment market and replace the obsolete real estate investment model.

BrickEX believes that the real estate investment industry can and will become more transparent, liquid and accessible with the implementation of innovative blockchain solutions. It will take companies like BrickEX, with innovative and forward-thinking cultures, to demonstrate to the wider public that this is the way forward.

Our Journey just started…come and join us!

BrickEX will be announcing several key partnerships shortly.

Investor Relations: ir@brickex.io

General Enquiries: info@brickex.io

BrickEX — Real Estate Reinvented was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.

As the quantity of ICOs is increasing, maybe the quality of some ICOs is not growing in the same way. We at ICOVend receive a lot of new ICOs to be listed, and it is clear that some projects only see ICOs as a good way of raising funds. Some, even don’t need blockchain at all to create their solution.

Ecosystem, Infrastructure and Protocol ICOs

In the middle of this situation, we have three types of blockchain projects that are worth looking at: protocols, infrastructure and ecosystems. You probably have seen these words here and there, if you are familiar with the world of ICOs.

Maybe the key word here is Infrastructure. Infrastructure projects are those which plan to create something that can become a technological base for other projects. Usually, they are a tool or a group of tools, meant to be used to create other projects. You can think about Amazon AWS Cloud services as an infrastructure service, as long as other companies will use their service to create some specific solutions.

Infrastructure projects are increasing in popularity and usually have success in being funded, this is because everyone accepts that we are in an early stage of blockchain, and therefor we need to improve the whole system from bottom up.

Protocols

Protocols are a specific type of infrastructure project. These projects focus more on a very specific problem and try to create a solution for it. Protocols often are more a ‘set of rules’ and a ‘way of doing things’ than a full software solution. The example that everyone uses to exemplify this is the http/ip protocol, the set of rules that define how computers communicate.

Some very interesting projects in the blockchain and ICO-world are protocols for anonymous and decentralized internet, and others focus on AI and how they should talk to devices and other AIs. A true exciting new world is opening here.

Ecosystems

And now we come to the subject of this publication: the Ecosystem blockchains. Nowadays it is very common to find new ICOs which claim to be “the new ecosystem of this or that topic”. But, if we define what an ecosystem really is, we can then filter the real good projects from those that really aren’t.

An ecosystem is something bigger than just an infrastructure, usually, it is formed from several infrastructures. A good ecosystem is one that defines all the actors that are going to be in the system, and how they interact whith each other. Yes, a good ecosystem must define protocols.

These protocols can be real communication protocols, as we talked above, or they can just be API definitions, that ultimately are some kind of alt-communications protocols.

Another key concept here is that ecosystems must create their own infrastructure, the base system where these actors are going to live and interact. This infrastructure will use their own protocols, but can use others, and even, other infrastructures.

And maybe the most important factor: ecosystems must define how the whole system is going to work. Concepts like actor roles, what are the resources, the rules that manage the system and finally: who is the customer. Or even better who is the customer of whom in the ecosystem.

Non-blockhain Ecosystems examples

Because of blockchain ecosystems are being developed right now, a good way to understand them is using some examples of more traditional business. I think that we have two perfect examples of ecosystems that are actually competing to be the ‘mobile ecosystem’. These are Apple App Store and Google’s Play Store.

Mobile stores are great examples because they have actors: app developers, end-user customers, mobile companies/manufacturers and marketing teams; they have protocols: app development API, rating and comments system, push notifications API, etc; and they have infrastructures: mobile OS, SDK, app marketplace, push notifications servers, mobile ads services...

In the end, the ecosystem is not the app store at all but the whole ‘mobile ecosystem’. And of course, they define the rules that govern this system, the roles and the way they can interact between each other. The key difference with blockchain ecosystem is that this one is a centralized system.

Decentralized ecosystems

Finally we arrive to the most important concept, the crown jewel. Imagine the ecosystem that we have been talking about, as a decentralized system. In other words, you define the system, create infrastructure and protocols, and create the rules and the roles for it, but in the end, the ecosystem is a ‘living thing’ that will operate by itself.

In decentralized ecosystems no one has the control. There is no admin role, like in Bitcoin and other crypto currencies. The system needs to have some consensus rules or at least, some self-management tools. The definition of this can be one of the hardest tasks to achieve.

Picture an ecosystem which defines a “rent your house or room to others” system. Yes, we are talking about the decentralized and ‘blockchained’ Airbnb. In this system, we have property owners and we have customers. Maybe we will include payment managers or ‘scrows’, who will be an intermediary between customer and owner, retaining the payment until the rent ends. We can include property sponsors role or other kind of marketing role. And in the end, we are only the developers, who maintain the code, but we don’t have control over the properties or the ratings in the system.

In decentralized ecosystems we won’t have an “Apple admin” who decides if your app can enter the app store or not. The system has its own rules, and your app will appear or not, based on the system mechanisms, most likely to include the community rating or another forms of government. The system is self-managed and no longer needs factors outside the community. Even the source code can be published as open source, and the ecosystem will not depend on the original developers forever.

Conclusion

As long as ICOs are a new funding model does no depend on business revenue but on “system value”, ecosystems and other infrastructure projects can be the best projects to fund, from the investor perspective and from a more philosophical point of view as well.

Remember, the value is in the system (and probably in the token or coin that reflect this value) not in the income. With this in mind, ICOs can fund true technological innovative solutions that the real world needs which transcend above companies whilst, still making a good profit on the investment by an increase in token value.

Why are ‘Ecosystem blockchains’ important was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.

The audience was a mix of real estate industry professionals ranging from lawyers, to developers to surveyors. One thing was for certain, even in this small group of interested individuals, nobody had a real in-depth clue about blockchain and how it could potentially be successfully implemented. Everyone knew about cryptocurrencies like the Bitcoin but they were all lost when asked who owns a nano ledger.

The idea of having interactive sessions was thrown out of the window almost before we even could start our presentation. Nevertheless we delivered not only our thoughts about blockchain and real estate but we also dove into the world of crypto currencies and ICOs.

Some of the main issues raised was around the question: How do you know that the property you (partly) buy on the platform is really owned by the seller?

There is currently no direct way to have the actual deed of the property as a smart contract. What happens now (also with property crowdfunding platforms) is that the property fund creates a Special Purpose Vehikel (SPV) this SPV owns either the economic and/or legal rights of the property.

An example to illustrate: in the UK a Limited is founded that buys the property this Limited company has 100 shares. This means that each share has 1% ownership of the property value and rental income. This Limited company will enter a smart contract and through this contract makes it possible to trade the claims on these shares in the limited company.

The forementioned question also addresses an important part of the BrickEX Exchange Solution: due diligence. Each Provider and property offering has to undergo thorough due diligence to ascertain that the Provider: a) actually owns the property and b) that the vehikel created for or around the property has the legal rights to transform the economic rights related to the property over to the smart contracts in the blockchain.

BrickEX intends to include the community to take active roles in verifying providers and properties at a regional or local level. Each verification will generate Brick Tokens for that authenticator.

Furthermore we anticipate that for the near future a crucial role needs to be played by attorneys and notaries in verifying property providers and property ownerships.

The power of blockchain is restricted to the quality of its input.

BrickEX delivers Keynote at IBREA was originally published in BrickEX on Medium, where people are continuing the conversation by highlighting and responding to this story.