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Author: Michael Flight

A Peer-to-Peer Electronic Cash System,” which explained how online payments could be sent directly from one party to another without going through a financial institution. That system is blockchain technology (or, simply put, a digital ledger).

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During the cryptocurrency explosion of 2017, we asked the question: “What if you could combine all the benefits of wealth creation, inflation protection, and cash flowing income of real estate with the liquidity and ease of use worldwide presented by Bitcoin? What about Real Estate On The Blockchain?

For the past thirty-five years, we’ve been focused on institutional-grade commercial real estate investments. More specifically, shopping centers and net lease properties throughout the United States.

It became apparent that technology would disrupt, but enhance the real estate investment world like it has impacted other industries for decades. So, we spent the next three years researching, designing, and building the ideal investment to get the best aspects of commercial real estate including wealth generation, inflation protection, tax benefits, the ability to leverage your investment, tangible value, and cash flow regular income with all the benefits of blockchain including security, transparency, cost efficiencies, worldwide distribution, liquidity (person-to-person & business-to-business trading, secondary exchanges) and immediate transfers.

To quote Peter Theil from his book Zero to One, “Look at what in your industry do you think is inevitable but no one sees coming.”

These are the problems of owning high-quality Commercial Real Estate:

High Barriers to Entry

  • It takes Specialized Knowledge to invest and manage with confidence
  • Most quality properties cost in excess of $1 million

Concentration of Risk

  • A single property creates a Lack of Diversification
  • Buying one property puts “all your eggs in one basket”

Lack of Liquidity

  • Your money is not available immediately which makes Commercial Real Estate Illiquid
  • It takes Time, Effort, and Specialized Marketing to sell a property

Wall Street wants you to invest in Stocks and Bonds

  • Investing in the Stock Market, unless you are an insider, is like gambling
  • Real Estate is Main Street Investing—the best “Alternative Investment”
  • Real Estate Investment Trusts (REITs) are not the best real estate investment:  Dividends are taxed as ordinary income, highly correlated to stock market volatility, and massive overhead to run these companies

Foreign Ownership of US Real Estate

  • It is extremely difficult to navigate the rules for persons and businesses outside the US
  • Compliance with regulations like FIRPTA and FDAP to legally own real estate

Time Commitment

  • Real estate ownership is a full-time job
  • You need a team of professionals and a system to stay competitive in the marketplace

There are problems with owning Bitcoin and Cryptocurrency as an investment:

Cryptocurrency is speculation backed by nothing

  • Pricing is based on its future potential and the anticipated applications
  • The small total market size makes it susceptible to manipulation from larger investors

Cryptocurrency does not produce cash flow

  • An investor is hoping for appreciation
  • Crypto was designed as a means of payment and store of value, not an investment

Cryptocurrency is not tangible

  • Based on an algorithm and software code
  • Not backed by a hard asset, it has a lack of inherent value—Crypto Kitties are not real animals

Price and Market Volatility

  • Wild swings in prices
  • Smaller pools of investment and high liquidity contribute to market manipulation

Regulations and Taxes

  • ICO (Initial Coin Offerings) don’t always comply with the alphabet soup regulatory agencies ASIC, ESMA, FCA, MAS, DFSA, SFCHK, SEBI and SEC
  • Uncertainty on how crypto enterprises and investments will be taxed in the future

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