How blockchain disrupts the way you can invest in real estate development
You’re driving to work when you see the familiar sight of scaffolds, construction vehicles and people at work.
While the sight may be familiar, the process behind funding this work is likely more complex than you think, and it is wrought with problems that the blockchain can solve.
While the developer may be the one with its name on the building, much of the funding actually comes from a variety of sources: banks, private investors, and perhaps a small percentage from the developer itself.
For any development, banks may lend a large amount of the capital. Yet their loans are not without drawbacks; sometimes their interest rates can be as high as 10 to 12 percent.
The other capital often comes from wealthy individuals or funds. Yet when these investors step in, they often become the majority shareholders in the developments — the buildings stop looking as the developers had planned and begin to prize other aspects, like profitability.
So how does blockchain disrupt this problem?
Blockchain can also more easily pool individual investors rather than relying on oversized funds or high net worth individuals.
Blockchain positions its investors as proxy developers, so instead of sitting on opposite sides of the table, the investors and developers work together to create solutions that achieve the best results for neighborhoods and their communities.
It makes dynamic currency fluctuations more stabilized. It eases paperwork hassles by simplifying them through smart contracts.
Blockchain also makes safe investment opportunities that could be seen as risky by securing them through the transparent, immutable blockchain. All parties are held to higher accountability through the visibility of blockchain transactions.
With Relex’s experts scrutinizing every business deal, and with the partnerships themselves approved by the investors, Relex is a truly disruptive, innovative force in the real estate development investment industry.
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