Turning Real Estate Into a Liquid Asset

“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” — Andrew Carnegie

Real Estate is a scarce asset that appreciates in value year after year. It’s stable, fluctuating much less in price when compared to other investments. Plus, real estate produces income in addition to the appreciation.

So what stops people from investing in real estate? In order to benefit from an income producing property, whether it’s just a small rental or a large commercial complex:

1. It requires a significant upfront investment. . You can’t just buy $20 worth of real estate to test the waters.
2. The money you invest in real estate will remain tied up in that property for a long time

For example, let’s say you stumble on a large apartment building for sale for $5,000,000 that produced a 10% cap rate with a Net Operating Income (NOI) of $500,000 per year. In most cases this would be a great deal BUT

1. It doesn’t really matter if it’s a good deal or not, you will be unable to take advantage of the opportunity, if you don’t have $5,000,000 to invest.
2. Even if you had the funding for the property there are some instances where you may need to sell it again quickly. Often this can result in an overall loss on the property.

These factors represent the greatest barriers to real estate investment for average investors. However, with the rise of blockchain technology, and the advent of public-key cryptography the world now has digital assets like Bitcoin and other cryptocurrencies. By leveraging these two key technologies, now there is a way to solve the problems of investing in traditional real estate.

Introducing the new way to buy & sell fractional shares of real estate assets — LiquidRE.com

How LiquidRE Works

We use multiple technologies to effectively do 2 things to real estate assets:

1. Tokenize it
2. Make it intrinsically liquid

By “tokenizing” a piece of real estate we are breaking the ownership of the asset into many pieces. For example, a $5,000,000 apartment building would be split up into 5,000,000 tokens called LRETs (Liquid Real Estate Tokens). This is similar to a company that goes public and sells 5,000,000 shares of stock for $1 a piece. Now anyone with $20 can be a real estate investor.

Creating Liquidity

Traditional real estate, while a great investment, is very illiquid. This creates what is known as the illiquidity discount, effectively lowering the price of real estate compared to other assets. Long term investors with piles of cash can afford having this inflexibility in their portfolio, but for everyone else it impedes their ability to enjoy the long term growth and limited risk that comes from real estate investments.

But what if you could invest a few dollars at time, as well as being able to pull your money back out of your real estate investment instantly anytime you want without penalties?

Once on the platform, each property’s tokens will be bought and sold in the marketplace depending on performance of the asset — in the same way stocks are traded on the stock market.

3 Benefits of Tokenizing and Adding Liquidity To Real Estate

1. It removes location as a barrier. This will open up local real estate assets to a global market, allowing investors from all over the world to invest in property anywhere.
2. It removes illiquidity risk. Anyone will be able to buy and sell small fractions of real estate at will.
3. Allows for true price discovery. Each piece of real estate will realize a true market value based on the income it produce

Because of these factors, the value of any real estate properties trading on LiquidRE have the potential to increase substantially. If you would like to know how our platform turns any real estate property into a liquid asset in 4 steps click here.