HOW BLOCKCHAIN CREATES NEW OPTIONS FOR INVESTING IN REAL ESTATE

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  • HOW BLOCKCHAIN CREATES NEW OPTIONS FOR INVESTING IN REAL ESTATE

In 2008 Satoshi Nakamoto published the whitepaper “Bitcoin"

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

    Michael J. Flight is a founding principal of Concordia Realty Corporation in 1990 and more recently CEO of Liberty Real Estate Fund LLC, the World’s First Net Lease Security Token FundTM, joining 30 plus years of institutional real estate investment experience with blockchain technology to deliver very stable, diversified, tax efficient returns combined with liquidity, security and transparency.  The LIBERTY-RE token is a net leased property fund curated to create a conservative, safe haven portfolio of long term, Single-Tenant Net-Leased properties designed for geographic diversification, tenant credit diversification and industry diversification. 

    Michael is a real estate entrepreneur and Security Token evangelist who is an expert in retail real estate (Shopping Centers and Single-Tenant Net-Leased) investment, redevelopment and real estate on the blockchain. He has an extensive record of partnering with some of the world’s most well-known banks, insurance companies, hedge funds and institutional investors in many successful projects.  Michael has been active in commercial real estate over the past 34 years.  Michael has been featured on CNBC and CEO Magazine and these quality podcasts: The Real Estate Guys Radio Show, Cash Flow Connections, Real Estate Espresso, CashFlow Ninja, Buck Joffrey’s Wealth Formula, Family Office Club and Bitcoin.com podcasts and many more.  Michael is also a well-known speaker at Global Family Office Summit Dubai, FreedomFest, Investor Summit at Sea, the Intelligent Investors Real Estate Conference, the Multifamily Investor Network Conference, the CRE Power Players Summit, the LA Blockchain Summit and the Liberland 5th Anniversary Conference.  He is a published author having been recently, and was featured in the #1 Amazon bestselling book: DESIRE, DISCIPLINE & DETERMINATION (2019).  He is currently finishing a book on the benefits of Single-Tenant Net-Lease (STNL) real estate investments. Michael is co-host of the Nothing But Net podcast – an educational podcast about Net Leased (“NNN”) properties and the Chicago Blockchain Real Estate Collective.

    Michael has been elected to public office, also serves on the real estate investment advisory boards of two non-profits and is a founding board member for Freedom of Life, a Romanian NGO helping women achieve liberty and build new lives while recovering from human trafficking.

    *Note: Liberty Fund/Concordia Equity Partners (Concordia) have made every attempt to ensure the accuracy and reliability of the information provided. Concordia cannot not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the information contained herein. The information herein considered legally-binding legal advice, tax guidance, or financial counsel.

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