This post is written from the perspective of a real estate professional and crypto noob.
It is written in order to demonstrate some relevant opportunities to merge traditional real estate with crypto.
If using NFT’s, DAO’s and custom tokens, the real estate sector can potentially benefit from cryptos’ liquidity.
Smart contracts, escrow, creative finance, and barter principles, enable crypto holders to hedge the benefits of physical, income-producing & appreciating assets.
1) NFT’s
Create an NFT of the Air Rights of an Income-Producing Asset
Air Rights are essentially condos.
One specific unit in a 300 unit building is defined by the location of the asset in the space of the building -- a specific spot in or over a building.
Essentially you are monetizing the income-producing portion of the real estate. This is where the tenant conducts business or lives. This is where the money is made, the yield is derived.
As the owner, you can dictate the terms of your payment to the NFT holder. Payment, length, when, how, etc.
You can tie the payment to the performance (a Performance Mortgage) of the asset. As the rents increase, the payments increase. This would encourage the NFT to be traded.
Royalties can be paid to you upon transfer. Like a commission.
The downsides: What if the seller doesn’t pay? What recourse do we have? Does the seller keep funds in escrow? A 3rd party steps in to make good on the payment and assumes the asset from the seller? An insurance coin?
Alternatively, the seller could write a lien on their property, place it in escrow to be recorded if certain conditions are not met.
NFT as a ‘To-Be-Built’ Asset AKA Monopoly
If I own a piece of land and I want to develop a tiny home on it, I can potentially develop an NFT collection for ‘Cherry St. Development.’
So there are a few plays here:
- Purchase the land & enjoy income from a ground lease.
- Purchase the improvements and enjoy a modest income for providing the concrete pad, plumbing, and electric.
- Purchase the home, place it on the improved land and enjoy the greatest yield, from the leased home.
Each NFT has its own value and utility. Each NFT can be traded, sold, mortgaged (rented) or burned (potentially).
If you buy the improvements, your pad would be the first filled, hence improving the value of the Lot. If you went in with a buddy and bought both, you could then merge them in one wallet and enjoy the benefits or split them up.
AS the developer I may want the right to buy back your NFT’s to complete my development. Alternatively another buyer may be waiting to buy a completed package.
Below is an early attempt of this concept:
Here is a site dedicated to trading real estate with some crypto: www.rexnet.io
Education on Web: Represent Traditional Materials in a Value-Add Fashion
Real Estate Exchangors use barter techniques to exchange equity in properties without having to buy to sell or sell to buy.
This information is largely exchanged at in-person marketing sessions and more recently on Zoom. These formulas and concepts are discussed verbally and brainstormed to create new possibilities. This has been hard to convey by books or CDs’.
With NFT’s we can now upload books, add accompanying audio/video and provide access to events, calls, meetings etc anytime in the future. It is my belief that just like people used to check email and phone messages, they will now focus on their wallets.
Any airdrop, be it tokens or access or knowledge will be valued and will add value to the asset its dropped to.
This will create appreciation in these assets and encourage the exchange of them. Royalties will benefit the creator and his lineage for generations. All the while the community of holders will be adding value to the NFTs’ by adding knowledge.
An early take on this concept is taking a large book, for example, 300 Ways to Buy, Sell or Exchange Real Estate by Bob Steele and making it digital.
This NFT comes with a pdf of the 400-page book, a video of the author discussing various aspects of the book, a signed physical edition of the book, a signed baseball, and access to weekly calls to discuss using these formulas in your business.