Despite economic uncertainty, the real estate market continues to offer a wealth of opportunities for investors. According to Zillow, U.S. home prices are up 18.2% year over year. Compare this to the S&P 500 and NASDAQ Composite Indexes, which are down 16.7% and 25%, respectively, and it's clear that real estate is faring much better than most other assets.
Investors are taking notice, and real estate, especially properties that can be fixed up and flipped, is in higher demand than ever before. In fact, home flip rates are at their highest in the past 20 years, and for good reason: According to ATTOM, the average home flip results in a gross profit of $67,000 and an ROI of 26%.
Landshare, a tokenized real estate platform on Binance Smart Chain, has already sold tokenized properties to investors in over 30 countries around the world through its first property sale on Binance Smart Chain. Now, the company is looking to bring house flipping to the masses with a new feature: Tokenized House Flipping.
What is House Flipping?
Home flipping is when an investor buys a property, renovates it, and resells it for a profit. Done right, a renovation can add more value to a home than it costs. For example, new paint and new floors are inexpensive but can make an outdated room look like new.
Flipping a home is a great solution for short-term investors because it allows for a lump sum profit in a relatively short period of time – a process that typically takes anywhere from a few months to a year, depending on the scope of the project.
Traditional barriers to entry
Despite being extremely lucrative, flipping a home can be difficult or impossible for the average person. In addition to the high cost of purchasing a property, would-be flippers must also navigate the complicated process of selecting a property, budgeting for repairs, and renovating it in a cost-effective manner.
Hiring and managing contractors is not only a hassle, it can significantly reduce your bottom line and result in a negative ROI. While investors who choose to do all the work themselves can save money, renovating a home requires specialized skills and a significant investment of time. Simply put, the process is expensive, complicated, and can lead to losses if done improperly.
Landshare enables home resale with blockchain
By leveraging the power of blockchain technology, Landshare's latest feature offers the opportunity to renovate and flip without all the traditional hassles and barriers. Instead of buying an entire property and doing the renovations yourself, Tokenized House Flipping allows anyone to invest partially with other investors around the world, while the Landshare team handles the renovation and selling process.
The technology underlying this new feature is called tokenization, which refers to the creation of tokens on the blockchain that represent ownership of real-world assets. Landshare has previously used this process to offer fractional investments in rental properties. Now, the company is applying this proven method to the first-ever tokenized fix-and-flip.
Here's a quick summary of how the tokenized home resale process works:
Landshare will create a new legal entity that will be responsible for owning, renovating, and selling the properties. Ownership of this legal entity will be converted into tokens. A limited number of tokens will be sold to KYC-verified investors to help cover the costs of renovating the properties. Once renovations are complete, the Landshare team will sell the properties on the open market. Once the properties are sold, token holders can redeem their House Flipping Tokens for a share of the sale proceeds. Conclusion
Tokenized house flipping is the latest addition to the Landshare ecosystem, which also includes investment opportunities in rental properties, real estate NFTs, and a full suite of DeFi features. This new feature expands Landshare's lineup by introducing short-term investment opportunities in real estate, a first for Binance Smart Chain and the blockchain sector as a whole.
Disclaimer: House Flipping Tokens have not been and will not be registered under the Securities Act of 1933. Accordingly, the securities will be offered and sold only to persons outside the United States pursuant to the SEC Final Rule Offshore Offerings and Sales (Regulation S). Additional restrictions may apply. See website for more information.