Gone are the days when the average person could save for a down payment and buy a house. The real estate market has seen a significant amount of growth over the last few decades. Prices in prime cities such as San Francisco and New York have soared so much that people simply cannot afford to live there anymore. This is bad news for non-institutional real estate investors, who don’t have the capital to compete in such an expensive real estate market.
The real estate market is one of low liquidity, although it requires large amounts of capital. This means that investors have to invest large amounts of their capital, and also have to take the risk of not being able to sell their property at the right time.
Normal Americans suffer greatly due to the burdensome, contemporary process of making real estate deals in the US. If you’re looking to buy a house in the US, you have to go through credit checks, high transaction costs, taxes and numerous other steps.
If you look at the transaction costs, generally, when an investor is looking into investing in the real estate sector, he has to pay up to 5% of the house value as fees to different agencies and people. Each transaction has a minimum of 5 middlemen, all of whom have their share in the middle of a deal.
This makes investing in the real estate sector highly expensive and a slow and arduous process. Investors and homeowners have to go through numerous checks, difficult processes and dozens of other difficulties before they can even make an offer.
The Difficulty of Getting In
Even if you’re buying a house with a mortgage, you still have to invest at least 20% of the house value as the initial down payment to qualify for the best rates. This is now impossible for most people as house prices have soared up to 12% within a year, in some localities.
Apart from the initial down payment, buyers also need to have a strong credit record and must demonstrate that they are responsible enough to commit to a long-term investment. Even if an investor has all of these things, it is very difficult to get exposure to high-value and high-return real estate investments because these investments are usually only limited to the high net-worth investors.
In the US, investors have the opportunity to participate in real estate Investment Trusts (REIT), which allows multiple investors to invest in large-scale projects easily. But REIT also has its downsides, including higher fees and more middlemen in the transaction process. While public REITs can be traded, they are usually traded domestically and embed high fees which reduce the returns to an average of a single digit. The private REITs usually have higher returns, but they’re a less liquid investment than the more liquid public REITs.
How Blockchain Changes All of This
Blockchain creates a public ledger, which holds the information about all of the transactions conducted on the network. By its nature, it is a fraud-resistant system and does not require the numerous middlemen who are usually included in real estate transactions.
Slice is bringing these much-needed benefits to real estate by creating a platform that will allow investors to invest in real estate projects directly through blockchain technology. In this way, the investors will bypass the middlemen, and transaction costs will be greatly reduced. This means investors will enjoy higher profits and also faster processes.
The blockchain is very secure, and investors don’t need to worry about their privacy. Their identities and personal data exists in the blockchain in an encrypted form. Slice ensures that this data is not provided to any third-party applications and is encrypted with a secure algorithm.
Slice: Accessible and Liquid
Slice resolves both accessibility and liquidity of real estate assets. With Slice, investors don’t have to worry about minimum investments and extensive lock-down periods. They gain access to institutional grade real estate investments, which promise high returns with low fees.
Private REIT offered in the US does not promise liquidity, but Slice does. The platform that is being created by Slice will allow investors to sell and buy from real estate projects like any other investment in the stock market. They can easily trade their investment and sell it whenever they feel like it.
Slice offers investors the freedom to choose from an array of investments and they can also choose the investment strategy. It is up to the investors to decide whether they want to pursue an aggressive stance or choose a safer investment.
Stellar, Bancor and Hosho are some of the notable partners of Slice. The project also has a large number of famous advisors on its team.
Using the platform, people from all over the globe can access institutional grade real estate investments in the US. These investments are known all over the world for their high-returns, and Slice gives investors a chance to invest in them.
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