How Real Estate NFTs will Impact Real Estate in the Future

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How Real Estate NFTs will Impact Real Estate in the Future

Alex Kim
Rental Property Investor · CA · Member since 2019 · 11 posts · 1 vote

In my opinion real estate NFTS will have a huge impact on real estate in the future. 

Firstly, real estate NFTs guarantee easily traceable, secure records of ownership for a variety of property investments. 

Secondly, they will permit real estate transactions in virtual worlds, which are becoming a new investing frontier. NFTs will provide easy ways to transfer ownership of shares in real estate investments or virtual real estate. NFTs that represent fractional ownership in real world investments will be more stable. Liquidity is a big issue in real estate today. As more investors buy into the idea of fractional real estate ownership, owners are selling off portions of their digital assets. Blockchain technology will eventually eliminate the middleman and lower the risks associated with property transfers between parties.

Thirdly, property tokenization will facilitate easier borrowing or lending via NFTs. Imagine refinancing your home by putting down your property NFT as collateral and using a DeFi protocol to get access to more competitive debt offer. NFTs might easily convert into bitcoin as collateral, facilitating owners’ access to mortgages. What people don't realize yet, is that NFTs are the trojan horse into the next wave of user adoption. People want to feel like owners. Owning fractional shares of properties via NFTs will be a new way for people to feel like owners and get access to a stable appreciating asset class in a way that REITs never could.

Which of the two would you rather own, a share in a REIT or a real estate NFT of a property you have shares in?

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
4y

@Alex Kim

Honesty I would rather own a reit because of diversity vs a piece of a single asset. The fractional ownerships I have seen to date appear to have very high fees (acquisition, disposition and management) which you can get away with on a larger MF syndication but on a $250k rental…

Just my 2 cents. Curious to hear other peoples opinions.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y

    @Alex Kim

    Honesty I would rather own a reit because of diversity vs a piece of a single asset. The fractional ownerships I have seen to date appear to have very high fees (acquisition, disposition and management) which you can get away with on a larger MF syndication but on a $250k rental…

    Just my 2 cents. Curious to hear other peoples opinions.

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  • Alex Kim
    OP
    Rental Property Investor · CA · Member since 2019 · 11 posts · 1 vote
    4y

    Appreciate the thoughts @Chris Seveney. I am assuming you're referring to Arrived Homes or PeerStreet when you refer to current fractional RE models right? 

    I'm curious as well - if the fees were equal, would you feel the exact same way?

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  • Sean Ross
    Member since 2022 · 137 posts · 115 votes
    4y
    Quote from @Alex Kim:

    In my opinion real estate NFTS will have a huge impact on real estate in the future. 

    Firstly, real estate NFTs guarantee easily traceable, secure records of ownership for a variety of property investments. 

    LOL IF ONLY THERE WAS SOME EASY AND SECURE WAY TO TRACE RECORDS OF OWNERSHIP ON A PROPERTY

    Seems you are a little uneducated or unexperienced in real estate, especially when it comes to REITS , the rules regarding reits, the financial benefits and structuring of reits and the LIQUIDITY of almost any stock exchange. 

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  • Alex Kim
    OP
    Rental Property Investor · CA · Member since 2019 · 11 posts · 1 vote
    4y

    What is that easy way @Sean Ross? Go to the county clerk, dust off the file cabinet, and find the owner?

    While I'm all for stepwise improvement of those sorts of systems, new infra and the regulation that's bound to it could make this process so much smoother! Call me an optimist..

    Re: exits and liquidity of stock exchanges, I'm actually very well versed in securities law and the regulations that guide the forced X year lockup periods depending on Reg X you go through as well as the requirements to become a broker-dealer, registered exchange or an NSE with experience on the syndication side of things as well as legal. I'd suggest that you don't assume :)

    All for positive vibes here. Just wanted to express an opinion and see what peoples' thoughts were.

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  • Sean Ross
    Member since 2022 · 137 posts · 115 votes
    4y

    Oh it is more than assuming now. Go try shilling your virtual NFT world somewhere else.  You proved your actual with your ******** answers

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  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    4y
    Quote from @Alex Kim:

    In my opinion real estate NFTS will have a huge impact on real estate in the future. 

    Firstly, real estate NFTs guarantee easily traceable, secure records of ownership for a variety of property investments. 

    Secondly, they will permit real estate transactions in virtual worlds, which are becoming a new investing frontier. NFTs will provide easy ways to transfer ownership of shares in real estate investments or virtual real estate. NFTs that represent fractional ownership in real world investments will be more stable. Liquidity is a big issue in real estate today. As more investors buy into the idea of fractional real estate ownership, owners are selling off portions of their digital assets. Blockchain technology will eventually eliminate the middleman and lower the risks associated with property transfers between parties.

    Thirdly, property tokenization will facilitate easier borrowing or lending via NFTs. Imagine refinancing your home by putting down your property NFT as collateral and using a DeFi protocol to get access to more competitive debt offer. NFTs might easily convert into bitcoin as collateral, facilitating owners’ access to mortgages. What people don't realize yet, is that NFTs are the trojan horse into the next wave of user adoption. People want to feel like owners. Owning fractional shares of properties via NFTs will be a new way for people to feel like owners and get access to a stable appreciating asset class in a way that REITs never could.

    Which of the two would you rather own, a share in a REIT or a real estate NFT of a property you have shares in?

    While I do believe that NFT, or some variation thereof can streamline and simplify real property records of future transfers, financings, liens, etc., the implications of this, and the conclusions being drawn are nowhere near as certain.
    I find that most people pushing a particular viewpoint, especially when they sound like they’re repeating a PR release verbatim, are vested in this viewpoint, often for financial reasons.  So what we get is another “paid” political advertisement, not a well thought out unbiased position paper with conclusions drawn from an impartial examination of the evidence.  It’s like when Forbes used to have “supplemental” sections that on the surface looked like just another Forbes article when in reality it was a paid promotion piece (advertising).
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  • Alex Kim
    OP
    Rental Property Investor · CA · Member since 2019 · 11 posts · 1 vote
    4y
    Quote from @Don Konipol:
    Quote from @Alex Kim:

    In my opinion real estate NFTS will have a huge impact on real estate in the future. 

    Firstly, real estate NFTs guarantee easily traceable, secure records of ownership for a variety of property investments. 

    Secondly, they will permit real estate transactions in virtual worlds, which are becoming a new investing frontier. NFTs will provide easy ways to transfer ownership of shares in real estate investments or virtual real estate. NFTs that represent fractional ownership in real world investments will be more stable. Liquidity is a big issue in real estate today. As more investors buy into the idea of fractional real estate ownership, owners are selling off portions of their digital assets. Blockchain technology will eventually eliminate the middleman and lower the risks associated with property transfers between parties.

    Thirdly, property tokenization will facilitate easier borrowing or lending via NFTs. Imagine refinancing your home by putting down your property NFT as collateral and using a DeFi protocol to get access to more competitive debt offer. NFTs might easily convert into bitcoin as collateral, facilitating owners’ access to mortgages. What people don't realize yet, is that NFTs are the trojan horse into the next wave of user adoption. People want to feel like owners. Owning fractional shares of properties via NFTs will be a new way for people to feel like owners and get access to a stable appreciating asset class in a way that REITs never could.

    Which of the two would you rather own, a share in a REIT or a real estate NFT of a property you have shares in?

    While I do believe that NFT, or some variation thereof can streamline and simplify real property records of future transfers, financings, liens, etc., the implications of this, and the conclusions being drawn are nowhere near as certain.
    I find that most people pushing a particular viewpoint, especially when they sound like they’re repeating a PR release verbatim, are vested in this viewpoint, often for financial reasons.  So what we get is another “paid” political advertisement, not a well thought out unbiased position paper with conclusions drawn from an impartial examination of the evidence.  It’s like when Forbes used to have “supplemental” sections that on the surface looked like just another Forbes article when in reality it was a paid promotion piece (advertising).

     This is a fair perspective. I'll try to pose my posts moreso as questions moving forward. I haven't seen as many posts about crypto tokenization of real estate on this platform so I started this off as an opinion rather than an open question for forum discussion. Thanks for the feedback Don and keep in touch!

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