RealtyReturns is a cross-border marketplace that is helping people around the globe access real estate and accumulate wealth. Real estate has always been a bountiful investment with rich returns through income generation and capital appreciation, but the problem is most people can’t access this source of wealth.

Real estate today is an antiquated process that requires individuals to jump through hoop after hoop dealing with financiers, brokers, lawyers, governments, and sellers to name a few. Aside from all the middlemen trying to get a piece of the pie you also have to deal with the strict banking requirements, high interest rates and 20–30% cash down (not including rates for international purchases). Not many people have cash reserves to invest hundreds of thousands of dollars in residential real estate, or the seven-figure price tag on commercial real estate. Here is an example of how difficult this process is for a cross-border transaction.

Meet Bayani from the Philippines

Bayani is a Filipino investor interested in commercial real estate in the US. He isn’t rich but has been able to save the equivalent of 100k USD over the years and has enough income to pay for an additional mortgage up to 400k. His dream is to own commercial real estate in California that is cash-flow positive with an 8–10% cap rate and would appreciate over time. He found out rather quickly that he could not find an ideal commercial property for 500k, so he settled with a retail property that needs some touching up for the same price.

Bayani went to his local bank to get financing for his investment but was rejected due to the International nature of the investment, his local bank didn’t want to take on the risk. His second option was to try to get a loan from a US bank. He learned quickly that he needed a VISA and the loan would require a 50% down payment since he is an International investor with no credit history and considered a high-risk applicant. To make matters worse the interest rate on the loan would be 10% because of the perceived risk of default. Bayani in reality has great credit history in his home Country, but that history has no credibility to US financial institutions, and he has never had an interest rate even close to 10%, it was a slap in the face.

Since he didn’t have a VISA getting a loan through a US bank was a dead-end option, he also doesn’t have enough cash for the 50% cash down requirement. He debated pulling some equity out of his current home to make this deal happen, but that would require more leverage than he was comfortable with, and he was only scratching the surface in the amount of fees and hassle that he would go through to make this purchase. Bayani decided against investing in US real estate because the costs and risks were too high, not to mention the fact that even if he did qualify for the loan it would still take on average 6–12 months for it to finalize, assuming it funds in the first place. After it funded he then would need to touch up the property and have it maintained by a property management company which would eat into his bottom line.

This isn’t a unique story, this is the reality of international real estate investing. These high barriers to entry are prohibitive in nature and prevent people from taking advantage of passive income and capital appreciation. The RealtyReturns team has understood this challenge for quite some time, and frequent trips to Asia and Latin America validated the belief that people are hungry for International investment in the US but lack the accessibility and resources to do so.

The Returns Token

The Returns Token democratizes real estate investing for people around the globe. It’s the key that unlocks passive income and capital appreciation to millions around the globe that are building their nests eggs and planning for the future. Many of these same people are technologically savvy and have invested in cryptocurrency because they understand the value of a decentralized digital currency that can’t be manipulated by a government. Investors around the globe that have ETH cryptocurrency will be able to invest as little as 2 ETH into fractionalized US real estate through the RealtyReturns online marketplace, and bypass the working with banks, attorneys, brokers, title insurance companies, and escrow. RealtyReturns has a rich background investing in residential, multi-family, and commercial cash-flowing properties around the US, and collectively have well over 100 years of real estate experience.

How Tokenization works at RealtyReturns

The tokenization of US real estate assets makes these investments accessible and affordable to International investors. Returns Tokens are a new ERC-20 Ethereum Smart-Contracts governed security token protocol for real estate. Because the Ethereum market cap is over $50 billion there are plenty of buyers and sellers trading ERC-20 compliant tokens. This ecosystem has its own rules and language, which everyone must abide by. Having a standard ERC-20 ETH security token is standard in this ecosystem and can seamlessly be traded among crypto traders.

Because the Returns token embeds compliance at the token level it allows for decentralized trading on any platform that supports ERC-20 tokens. This creates liquidity as this opens up many different exchanges for investors to trade on. The key to trade is liquidity, if it’s difficult to both buy or sale, then it’s not going to be liquid, it’s not going to convert to cryptocurrency (value) very easily.

Benefits of Tokenization

Tokenization isn’t a new concept, it’s been going on for thousands of years in cultures all over the world. Tokens create accessibility and simplicity when trading value for value. It’s a mutually trusted medium of exchange that can be traded easily among its traders. Beads, precious metals, Cowrie Shells, and Ethereum all have one thing in common, they have all been used as tokens of exchange at different time periods in human history.

The significance of digital tokenization can’t be overstated; it’s simply transformational because of its unique ability to divide assets into bite size pieces. The ability to take an asset and divide it up into smaller individual parts that can be traded in the blockchain creates efficiency, greater utilization, and income streams to people that were denied access in the past. The second significant breakthrough that makes blockchain tokens unique as a medium of exchange is the security and ERC-20 compliance embedded in each token.

Each block in the chain contains the history of the transaction and the link to the previous block validating the transaction firmly recording the history without possibility of erasing or changing the data. This data becomes immutable in the digital ledger creating trust in the exchange and eliminates costly third parties. Because the blockchain is decentralized it’s contained on computers around the world, it can’t be changed once recorded, which creates confidence and efficiency among traders. We are only in the beginning stages of what might be the most disruptive technology in the last quarter century.

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Democratizing global access to investment grade commercial real estate using the blockchain. Visit RealtyReturns.io and join our Telegram group https://t.me/realtyreturnsglobal

Trevor Whiting

VP, Investor Relations

RealtyReturns

Experienced Sales Leader of over 14 years and has started offices in London, Toronto, and the US. He was VP of Investor Relations of RealtyMogul where was responsible for revenue growth, sales operations, and growth initiatives. Under his leadership, he developed a sales playbook that resulted in 2x growth.