How will Blockchain Technology disrupt your real estate investing business?
You’ve heard the word blockchain, and maybe associated it with a cryptocurrency like bitcoin. It is true that bitcoin uses shared ledger technology, but it would be wrong to assume that cryptocurrency is a blockchain.
Joe Snyder, the CEO of Lannistor Holdings, takes us through what a blockchain is and how it will be used in real estate investing in near future.
The simplest description of a blockchain is:
All users with access to the ledger can see the in real time, exactly what is the current status. Because there is not one central point, the opportunity for a hack or corruption are reduced.
Every major industry, government and education institution is looking into how they can employ blockchain technology. They are looking at how using a shared ledger can result in cost savings and loss mitigation.
It is estimated the next 36 months shared ledgers will be introduced and become the standard for many current paper systems.
You are a real estate investor asking how will Blockchain affect your real estate investing. A couple of easy applications are chain of title and lender investor records, ie mortgage backed securities.
For your real estate investment, a clean title is a must. If your title has a hidden lien, no lender will lend, and you will not be able to transfer ownership to a willing buyer. Shared ledger technology would allow for the local government, seller, buyer and lender to determine with certainty if there are any claims against the property instantly.
Do you remember the mortgage meltdown and the mess created by mortgages that were packaged, securitized and resold? There were multiple stories of homeowners losing their homes because the bank or loan servicing company was selling the home because they could not identify performing mortgages from non performing .
A blockchain would have provided instant identity for the homeowner to stop the sale, and or the lender to recognize the loan was performing.
These are just a sample of how shared ledger technology will affect real estate investing.
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