![]() One year after buying into a RedSwan offering, investors are free to do whatever they like with their tokenized equity through the blockchain. RedSwan, in contrast, offers investors the flexibility of a blockchain ecosystem. Complicating matters further, the early liquidation of shares in most funds or property offerings (assuming they allow it) can carry significant penalty fees and tax implications. Some REITs don’t have out clauses or secondary markets where you can liquidate shares. That can be a problem if your financial situation changes, and you want to liquidate your shares to make other financial moves. This hold period can last for several years. Normally, when you buy into a real estate fund or a property, you have a hold period where your money is locked up. Secondly, it allows RedSwan investors to have tremendous flexibility. First, it allows RedSwan to make high Class A and B real estate investment offerings available to small- and medium-sized investors at affordable prices. RedSwan’s founders believe its business model offers several distinct advantages over traditional real estate investing. When investors buy shares of the offering, they become equity owners in the property, and the platform converts the shareholder’s equity into tokens on a blockchain. If the offering satisfies RedSwan’s vetting requirements, RedSwan will list it as an offering on its platform. In cases where RedSwan’s team feels like the developer lacks the requisite experience or the proposed development doesn’t have the right balance of upside and risk, the platform will not accept it. In addition to having executed over $3 billion worth of CRE transactions, RedSwan’s team brings nearly 70 years of combined experience in CRE to the table.ĭevelopers who submit properties to RedSwan for funding must undergo an intense vetting process that examines both the developer’s track record and the underlying fundamentals of their proposed deal. ![]() RedSwan is a team of real estate professionals and investment analysts who provide that capital. When CRE developers seek funds, they turn to a variety of sources. The RedSwan real estate investing platform seeks to shift that paradigm by giving investors the benefits of real estate investing while offering them the enhanced liquidity of being able to sell shares on the blockchain. In the rare cases where a REIT has a secondary market, liquidating shares can still be punitive because of early liquidation fees. These hold periods can last several years. Second, most REITs have hold periods during which shareholders can’t liquidate their investment. First, REIT shareholders have no say over what assets the fund buys and sells. When you buy into REITs, you go onto the books as an equity owner and your equity share would be based on the percentage of the property you owned.īuying into REITs is less expensive than being a sole proprietor, but it carries other potential complications. Currently, one of the most common ways to do this is to buy into a fund such as a real estate investment trust (REIT). The other way to go, and this method has proven to be popular, is to pool your money by joining a group of investors in buying property. Even if you financed the building, you’d be looking at decades worth of debt service and having to assume all the headaches of management or to pay for outside management. The downside is that buying high-performing CRE assets can cost millions of dollars. One, you’d buy a property flat out by yourself. In the past, if you wanted to invest in CRE, you had two ways to do it. RedSwan: A Perfect Marriage of Fintech and Real Estate?
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