Throughout the past couple of years, I’ve always been interested in long-term investments in fundamentally strong but undervalued companies, projects, cryptocurrencies, etc.
My ultimate goal has always been to build multiple (passive) revenue streams, to snowball wealth as efficient as possible, in a risk-diverted way. This of course includes real estate. During my classes in San Francisco, I learned a lot about real estate development, even though my interests mainly lay with BRR (Buy, rehab, rent).
The entry barriers have always been too high to invest in real estate assets. This was until I first discovered REITs, followed by RealT (fractional real estate investing in U.S. properties through LLCs). as well as I recently discovered LabsGroup.
When wanting to invest in real estate, I experienced the following barriers:
To still be able to invest in real estate, I discovered two options: RealT & LabsGroup.
I’ve been using RealT for about half a year now, whereas I’ve had it on my radar for over two years. RealT is located in Boca Raton, Florida, and offers fractional investments into the US real estate market through fully-compliant, fractional, tokenized ownership. Powered by blockchain technology.
I also recently discovered LabsGroup, who just successfully completed their LABS token sale on Poolz, Mantra DAO and Zendit. It’s clear this team knows how to market their platform, it’s yet to be found out what reality is going to be like once it launches and enables users to invest in fractional tokenized real estate.
As explained tokenizing real estate assets on the blockchain offers for more liquidity, 24/7 property ‘trading’ and cross-border ownership. This significantly reduces entry barriers and costs to begin investing into real estate. It also reduces the barrier of having to invest a large amount of money into a single property, enabling users to spread their risks among different properties.
LABS also combines real estate with DeFi. To further ‘reduce’ the entry barrier and to further enable users to enjoy leverage, LABS offers peer2peer transactions, but also collateralised loans with LABS. Meaning loans can be taken by providing collateral, this means more liquidity available for more properties.
Do note: loans typically come with risks of being liquidated upon a decrease of the collateral value below the required threshold.
What’s interesting is that LabsGroup is ultimately building on the RioChain, a Polkadot’s Substrate. Built for cross-chain transfers and DeFi, to still support e.g. the ERC-20 Network (and taken advantage of the benefits of multiple chains, such as lower fees and faster transactions).
LabsGroup is building the LABS Securities Exchange, to be fully licensed, enabling investors to cherry-pick their properties incl. residential, industrial, commercial real estate, or a hybrid version of it.
Where RealT only offers properties in the US, LabsGroup goes beyond that and aims to offer global real estate, with various projects confirmed in the pipeline. This is incredibly interesting and I’m eager to find out which kind of properties we’ll see listed on their exchange.
Because of this license, LabsGroup is able to offer projects that meet the criteria to raise funds directly through Security Token Exchange Offerings (STEOs).
Similar to RealT, LabsGroup aims to distribue dividend or rental payouts on a daily basis. This makes it extremely easy to re-invest earnings into new properties, to snowball asset growth.
Real Estate Swap Marketplace
The Real Estate Swap marketplace is something that stood out to me. LABS aims to launch this marketplace in Q4, 2021, enabling investors to further diversify their portfolio by offering peer2peer swaps of pre approved KYC assets. Effectively making them the owner of assets that are being swapped.
LabsGroup will also offer to facilitate OTC deals instead, for those who do not want this to be publicly seen.
As mentioned, LabsGroup recently successfully completed the LABS token sale. They sold out rapidly and are now trading on the open market at more than 10x its token sale price.
LABS is a utility token, that can be used for various features:
On top of that there will be security tokens / NFTs that represent the ownership of unique properties.
What is the difference between tokenized real estate & REITs?
RealT & LabsGroup differ from REITs in four significant ways, according to the LabsGroup white paper.
Differences between LabsGroup and RealT are / will be:
I’m a big fan of tokenized real estate, as it enables the masses to start investing into it. Although, do understand this comes with multiple risks and I’d recommend you to:
For me, real estate is a perfect way to further diversify my portfolio outside of cryptocurrencies. I sold my stocks about two months ago as I’m anticipating the downside risk is higher than the potential rewards. As well as I’ve been investing into peer2peer lending for about five years now.
I’ll likely continue to purchase properties through RealT for now, but am very interested in LabsGroup and purchased a decent number of LABS in anticipation of the platform launch.
Based on their launch and the properties they offer, I’ll decide if the LABS token is meant as short-term trade or rather a long-term HODL opportunity to invest into real estate properties while enjoying various benefits.
It’s certainly a unique project and in my opinion offers significant upside potential, as this opens up a complete new investment opportunity for cryptocurrency enthusiasts (and other type of investors that currently find the real estate investment entry barriers to be too high).
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