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Non-Tech : Investing in Real Estate - Creative Opportunities
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To: John Vosilla who wrote (2638)4/11/2019 7:06:42 PM
From: sense  Read Replies (1) of 2722
 
I think its way too early to say what it will do, or if it will even be allowed.

My first take on it is that MOSTLY what it would do is... sort of what stock trading has done to ownership of corporations... so that you can own a bit of a business, without having to buy the whole thing. That generates a massive increase in liquidity by allowing bits to trade, not just whole entities.

That also means downsides in result, roughly parallel to what you see in less well traveled corners of the stock market... shares that might go without trading for a long time... a relative lack of liquidity in smaller share issues making more "no trades" or huge price volatility in those. And, for investors, similar challenges, as wanting to avoid participation in tokenization of smaller properties with no income... but maybe thinking a token or two in Trump Enterprises... or the Hilton Chain... might be good to have.

The original purpose of the stock market... was to enable capital FORMATION... not to allow selling off bits of established businesses, or trading, but to enable entrepreneurs to raise money from investors to create new businesses.

We have most of that already in real estate, with REITs... but with them, and otherwise, there is far more dependence on bank loans than other forms of finance in real estate. This alternative would enable direct participation by investors as lenders... while letting them take direct possession of the collateral in form of a token... and not need the bank to hold that collateral, while exposing the investor to the banks own business risks.

Consider it broadly as another form of dis-intermediation... getting rid of middle men who add cost and risk.
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