Financing Real Estate with Cryptocurrency & ICO
Financing Real Estate with Cryptocurrency & ICO (initial coin offering) will be the newest form of construction, mortgage and REITS financing and investment.
“Typical Real Estate financing is granted by a financial institution such as a bank, private hard money lender or by filling PPM (Private Placement Memorandum), which allows accredited and/or un-accredited investors to participate in such deals.
Financing by a financial institution is a straightforward deal where the middleman and the financing firm receive all financial benefits and the investee agrees to pay a certain interest and principle. There is no opportunity for partial public funding or participation in such lending opportunities
Private and hard money lenders while offering certain financing options usually require larger equity or higher rates and point with shorter terms or a combination thereof. Some private lenders use established funds where they pay their investors a certain percentage and lend the same funds at a higher rate. The public and smaller investors have no chance of exploring or investing in most of such opportunities.
As a form of public financing, a developer could file Private Placement Memorandum with SEC and specify to attract accredited or none accredited investors. Such method f financing also could cost a few percentages in brokering the deal plus all the filing fees that paperwork that is associated with it.
Thanks to the blockchain technology and crypto coins, there are many ICOs (initial coin offerings) that are geared to address real estate financing and partial ownership via cryptocurrency investments. This means that in an ecosystem, one could invest to finance or pay to own a portion of a project or a real property. This represents an opportunity for both the investors and the investees. Due to the technology involved, it eliminates the middlemen and most other paper works and fees.”
Valentino and his team have been working over the past year in design, creation, and implementation of a new cryptocurrency called Nummus. The real estate industry is one of the industries, which will benefit from this coin, smart contract, and its ecosystem.
Nummus’ white paper and its ICO site will be published in early 2018. The project development has been self-financed by Mr. Valentino. “I did not want to accept investment funds from those whom I have shared this project with. Once our technology is ready to be launched, we will open the opportunity to those who will share our goals and vision” Abraham added.