Real estate, tokens and 7% yield

Real estate, tokens and 7% yield

Given the gray prospects that the economy presents for the next few years, when it will take us 3 to 4 years to restore GDP before the pandemic and all kinds of adjustments, there are entrepreneurs and businessmen ready to fight and innovate, invest your time, Knowledge, illusions and the resources to achieve innovative financial solutions that create jobs and profitability, some of which have social impact, are cause for hope and sufficient argument to analyze some of these projects.

If we add to this the interaction of the latest trends in the real estate sector, as well as the tokenization that blockchain allows, and the possibility of 7% profitability in 12 months, the circle will complete, opening up an exciting world. capabilities.

Tokenization refers to the process in which the right to a real asset (property, debt, interest in a fund, a work of art, a theater ticket, etc.) is represented in a distributed ledger (blockchain) using unit accounts. They are called tokens (specifically, “security” tokens). That is, real assets are converted into digital assets, with the recognition of a specific value through tokens. The process of issuing them is called “Security Token Offering” (STO) and they have the quality of transferability. These tokens are tied to a digital wallet (wallet) as a specific account, which allows you to have ownership and the right to transfer them freely.

real estate tokenization
real estate tokenization

The main advantage of the new token-based economy is the reduction of friction arising from issuing, buying and selling financial instruments. This means achieving a number of advantages, such as greater liquidity (the ability to trade in secondary markets with access not only locally or nationally, but also globally), increased transparency (the token includes the rights and obligations of the holder, possibly the traceability of the property), have cheaper and faster transactions (through the use of smart contracts and the elimination of certain intermediaries) in addition to greater global availability. Regulations and how to comply when adapting to new times is one of the greatest challenges of tokenization. DigiShares provides a primary issuance platform as well as a platform for ongoing corporate management of the real estate fund. Other companies provide secondary trading exchanges for security tokens, custody solutions, legal services, real estate tokenization, white label tokenization etc.

Next week we will visit the first of these real estate loan processes to be launched in Spain, which will be an example of how the value of this new economy in the country can be added. With the aim of reforming the house in Barcelona, ​​which will be priced using the coliving formula, the promotion company decided to apply for a loan to carry out this transformation through this system.

It is true that in addition to traditional bank financing, which in many cases is not associated with this type of transaction (despite the presence of good plans and business opportunities), there are already various formulas that should be used in the search for resources. … The co-financing platforms associated with these real estate assets, some of which are registered with CNMV in their respective sections, have allowed, on the one hand, to finance these developers, and on the other, to open up new investment and diversification opportunities for small and medium-sized investors and investors. …

However, with tokenization, a new path opens up where, through the use of Blockchain technology, an intermediate layer is added that includes all the above characteristics, further optimizing the process on both sides. Thus, if the loan that the developer needs is tokenized and given these digital characteristics, greater transparency will be obtained, the ability to more easily manage investments (token in the wallet) and get liquidity before maturity.

This first project, recommended by RealFund, is a 12 month funding with a 7% coupon per annul under law. This is still a commercial loan, through which the developer is financed, receiving remuneration in return for the borrower and a return on capital at the end of the term. Tokens will be sold in accordance with the Securities Market Law (Articles 35.2 and 35.3), according to which, and since the transaction amount does not exceed 5 million euros, the publication of an information brochure is not required. However, general oversight of the process and verification of the information to be provided to investors, along with its risk assessment and other details required by law, by the investment service provider, under the oversight of the regulatory body, is required.

This token is issued by issuing 7,500 security tokens on the Ethereum network and is qualified by the real estate company Proptech.


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