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How Tokenized Commercial Real Estate Will Skyrocket Your Business

Blockchain technology is the new rising star of the real estate industry, and no wonder. This groundbreaking system enabled the digitalization of almost every asset in the world, such as tokenized commercial real estate.
As a result, blockchain unlocked a new world of possibilities within the investment landscape, mostly thanks to the adoption of real estate tokenization models. In short, high-quality assets are available to a wider, more diverse audience of investors.
For real estate brokers in particular, this represents a unique opportunity to offer new investing opportunities to their clientele, help them diversify their real estate portfolio, and achieve their financial goals.
So, if you are new to this new investing system and want to learn how to take advantage of it, you’ve come to the right place. In this article, we’ll go over all the different ways brokers can benefit from commercial real estate tokenization.

What Is Tokenization?

Tokenization is the process of fragmenting an asset into smaller digital shares, also known as tokens. The process uses the blockchain technology, a method that stores data in blocks that are linked to form a chain.
Since the ownership of a certain property can be splitted into as many tokens of that property exist, technically it can have the same number of owners. Reducing the entry cost to a real estate investment from, let’s say, $150.000 to less than $1.000.
In commercial real estate, in particular, transactions can experience a cost reduction from 30% to 2% due to the blockchain, which, at the same time, grants operations closed in a few clicks rather than expecting more than a month.

Tokenizing Commercial Real Estate to Diversify A Portfolio

Usually people that are willing to invest in real estate know how to identify a certain added-value on a broker. In this sense, offering them the option to diversify their portfolio with a minimum amount of initial investment will earn their trust and start to generate a cash flow for both of you.
Commercial real estate has probably been the hardest investment to get into from a smaller investor perspective due to the initial capital needs. However thanks to the combination of fractional investments and crowdfunding method, today it is possible to be part of large scale projects without being a big financier.

Benefits of Tokenized Real Estate Crowdfunding

Crowdfunding is, essentially, a method to raise money to finance real estate developments with small investments.
The tokenization system allows to automate almost every process in order to keep every investor updated and pay instantaneously once a project finishes. It grants brokers a lot of benefits for you and your clients, let’s take a look on them:

1) Easy access to massive projects

Crowdfunding is the best way for bigger investors to finance their projects without a high-rate interest loan. From a client perspective, you’re giving them the possibility to invest in high-quality assets with a minimum amount of money required.

2) Organic growth instrument

Apart from the obvious benefit of earnings, real estate crowdfunding opens the game to a wider audience on social media. Fundraising a bigger project and including smaller investors proves to be one of the best publicity you can make.

3) Builds investor loyalty

Nothing speaks louder than great results. Once your clients notice you go the extra mile to help them succeed and start to perceive incomes for their investments, you will be a trustworthy person to them, and there’s no money that can buy a customer’s loyalty, something that leads to positive word-of-mouth, referrals and reinvestments.

4) Easy to invest - Easy to track

One of the best features of tokenized commercial real estate crowdfunding is that there are platforms with an eased roadmap to invest.
Through smart contracts (Digital contracts designed to automate every directive established) you and your clients can track and keep yourself noted on every status of the development. Once it is finished, the system will do the corresponding payment to every party involved.

5) Close to real time Feedback

Due to the tokenized crowdfunding’s nature, you can keep your referrals’ investments and, at the same time, develop a good relationship with them and improve your understanding of your clients investment profile in order to know what will be your next recommendation to them.

6) High-level security policies

Backed digital assets such as real estate are highly regulated by financial institutions and every person that invests in a fragmented property crowdfund needs to pass a KYC (Know Your Customer) and AML (Anti-Money Laundering) tests.
Whether it is a false ID or the person is on a list of potentially dangerous users,you must reassure your clients that every aspect of this investment is verified in order to keep the highest level of transparency.

Tokenized Commercial Real Estate for Everyone

Once a person invests in traditional real estate, their next step is to move into bigger developments, especially commercial projects, as they’re more profitable.
At the same time, this kind of investment takes a little more time to reach maturity and it is for the best that you know your clients’ investment horizon.
In any case, tokenization lets you expand your portfolio with a liquidity that traditional real estate doesn’t allow. In our platform you can trace where your clients invest and keep record of their picks within our portfolio. Once the cash flows get momentum, you will be an unstoppable force. Go for it.

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