Blockchain Ledger Technology and the Future of Real Estate Transactions

Implementing new technology in the real estate and mortgage industries has been a relatively slow process when compared to other industries. In recent years, however, things have started to change with the move toward online listings coupled with mobile technology that is speeding up the home-purchase process.

Yet, even with this there is still so much opportunity for disruption in the real estate industry specifically.

One of the key components of that is Blockchain technology. When people hear Blockchain, they automatically think of cryptocurrencies, primarily Bitcoin. This isn’t a discussion about cryptocurrencies, however, this is about what is known as distributed ledger technology. Essentially, Blockchain ledger technology allows for a secure method for carrying out transactions and contracts. It is often referred to as a digital way to keep records and verify those records because of the way it is built (blocked chunks of data that are encoded). And not only that, this kind of technology has the capability of securely sharing data across massive networks, which makes real estate transactions the problem and solution to solve.

When it comes to the real estate industry specifically, Blockchain could alleviate a lot of the defragmentation that takes place within the MLS system. Let’s face it, with so many agents and listings managed within the MLS structure, the ability to share up-to-date information has become a real problem, especially when you consider how the modern consumer expects their purchases to be. As a matter of fact, the structures and systems created to manage real estate transactions need to be rebuilt, or replaced, to continue to deliver a transparent, seamless and secure process that the customers of today expect.

Moreover, the complex network of the real estate transaction process includes such parties as a seller, seller’s listing agent, buyer, buyer’s agent, broker, buyer’s lender, escrow officer, title officer, appraiser, insurance agent, inspector and notary. That includes, but isn’t limited to:

  • loan application;
  • purchase contract;
  • deed;
  • title;
  • disclosures; and
  • closing documents.

With so many stakeholders, paperwork and processes taking place throughout, it is no wonder things can get bogged down or impossible to manage.

Blockchain could solve that problem by centralizing all of the real estate data and making it secure, accessible and scalable. Instances have included managing virtual land and facilitating fractional ownership. Thus, Blockchain could take the current convoluted process and become an application for Blockchain. That would absolutely change the game.

Another way Blockchain could enhance the real estate industry is by turning real estate assets into a digital “token” of sorts.

A new startup is doing just that. It is called Harbor, and it is a compliance platform for “tokenizing” private securities, such as real estate rights into a digital token on a Blockchain. In other words, the company’s “Regulated Token” takes a real estate asset and transforms it into a digital representation. This allows for the sale of such an asset to happen much quicker than it has traditionally.

Forbes breaks it down this way:

Harbor aims to take hard-to-trade assets like real estate and private equity and use Blockchain technology to turn them into tokenized securities that comply with SEC regulations. For example, let’s say an investor group wants to create a private real estate investment trust (REIT)—a company that owns income-generating real estate. In launching their business, “95% of what they do remains the same as it was,” CEO Josh Stein says. “They find a property, form an investment thesis, run an analysis and do marketing.” The difference comes in how regulatory information is stored and securitized.

So, the technology is out there. It is up to today’s real estate companies to invest in the future in order for them to be better prepared to serve the modern buyer in the ways they expect to be served. By partnering with startups like Harbor, I believe many real estate and mortgage companies can use Blockchain to solve much of the fragmentation in real estate transactions that plagued the industry for years.

Not only that, transparency will increase among all the stakeholders in a real estate transaction if all of the data is readily available and up-to-date.

The bottom line is that the MLS system is likely approaching a point of becoming obsolete. It is up to the forward-thinking real estate companies to realize this and replace such an outdated platform with what technology is currently available.

10 Rules of Successful Real Estate Investing

I came up with the following rules of successful real estate investing over my many years of successes and failures. These are the same rules I follow today and share with our clients at Norada Real Estate Investments.

1. Educate Yourself

Knowledge is the new currency. Without it you are doomed to follow other people’s advice without knowing if it’s good or bad.

Knowledge will also help take you from being a “good” investor to becoming a great investor, and that knowledge will help provide a passive stream of income for you or your family.

2. Set Investment Goals

A goal is different from a wish; you may wish to be rich, but that doesn’t mean you’ve ever taken steps to make your wish come true.

Setting clear and specific investment goals becomes your road map and action plan to become financially independent. You are statistically far more likely to achieve financial independence by writing down specific and detailed goals than not doing anything at all.

Your goals can include the number of properties you need to acquire each year, the annual cash-flow they generate, the type of property, and the location of each. You may also want to set parameters on the rates of return required.

3. Never Speculate

Always invest with a long-term perspective in mind. Never speculate on quick short-term gains in appreciation, even in a heated market experiencing double-digit gains. You never know when a market will peak and it’s usually 6 to 9 months after the fact when you find out. Don’t chase after appreciation. Only invest in prudent value plays where the numbers make sense from the beginning.

4. Invest for Cash-Flow

With few rare exceptions, always buy investment property with a positive cash-flow. The higher, the better. Your cash-on-cash return is directly related to the before-tax cash-flow from your property.

Cash-flow is the “glue” that keeps your investment together. Your equity will grow over time (through appreciation and loan amortization), while the cash-flow covers the operating expenses and debt service on your property.

5. Be Market Agnostic

The United States is a very large country made up of hundreds of local real estate markets. Each market moves up and down independently of one another due to many local factors. As such, you should recognize that there are times when it makes sense to invest in a particular market, and times when it does not. Only invest in markets when it makes sense to do so, not because you live there or you bought property there before. There’s an element of timing and you don’t want to buck the trend.

6. Take a Top-Down Approach

Always start by selecting the best real estate markets that align with your investment goals. Most investors start by analyzing properties with little to no regard of its location. This can be a big mistake if you don’t consider the investment in light of the market and neighborhood it’s in.

The best approach is to first choose your city or town based on the health of its housing market and local economy (unemployment, job growth, population growth, etc.). From there you would narrow things down to the best neighborhoods (amenities, schools, crime, renter demand, etc.). Finally, you would look for the best deals within those neighborhoods.

7. Diversify Across Markets

Focus on one market at a time, accumulating from 3 to 5 income properties per market. Once you’ve added those 3 to 5 properties to your portfolio, you would diversify into another prudent market that is geographically different than the previous one. Typically that means focusing on another state.

One of the underlying reasons for diversification within the same asset class (real estate), is to have your assets spread across different economic centers. Every real estate market is “local” and each housing market moves independently from one another. Diversifying across multiple states helps reduce your “risk” should one market decline for any reason (increased unemployment, increased taxes, etc.).

Even if you don’t live in Texas, you can invest in the Houston Real Estate Market, which is becoming a hotbed of buyer activity that could be really beneficial for real estate investors; just ask the multitude of overseas investors who are choosing Houston as the city of choice to invest in for the foreseeable future.

8. Use Professional Property Management

Never manage your own properties unless you run your own property management company. Property management is a thankless job that requires a solid understanding of tenant-landlord laws, good marketing skills, and strong people skills to deal with tenant complaints and excuses. Your time is valuable and should be spent on your family, your career, and looking for more property.

9. Maintain Control

Be a direct investor in real estate. Never own real estate through funds, partnerships, or other paper-based investments where you own shares or other securities of an entity you don’t control. You always want to be in control of your real estate investments. Don’t leave it up to corporations or fund managers.

10. Leverage Your Investment Capital

Real estate is the only investment where you can borrow other people’s money (OPM) to purchase and control income-producing property. This allows you to leverage your investment capital into more property than purchasing using “all cash”. Leverage magnifies your overall rate-of-return and accelerates your wealth creation.

As long as you have positive cash-flow and your tenants are paying off your mortgage for you, it would be foolish not to borrow as much as possible to buy more income property.


Homes for Sale in Topeka

Topeka Real Estate & Homes for Sale in Kansas

With a population of approximately 130,000 residents, the city of Topeka is one of the largest cities in Kansas. Located on the Kansas River, Topeka is within convenient driving distance of several major metropolitan areas including Kansas City, Omaha and St. Louis. Topeka is also an important rail hub and a shipping and marketing center for neighboring agricultural areas. The local economy benefits from major manufacturing and processing of flour, tires and pharmaceutical products as well as a number of meatpacking plants. Other important industries within the region include education, health and social services and retail trade. 

Residents of Topeka with children from grades K-12 will find excellent educational accommodations through Topeka Public School Unified School District 501. Those in pursuit of a degree in higher education will find more than eight college and university campuses within the region as well as other schools in surrounding areas. 

Lovers of the outdoors will be immediately drawn to the Lake Shawnee recreational area. This area contains a city-regulated swim beach that offers swimming lessons. Also available are a golf course, a campground and community parks with trails, tennis and sand volleyball courts, soccer and softball fields, and activity centers. A number of museums are also located within the city, including the Combat Air Museum, the Kansas Museum of History and the Mulvane Art Museum. Available real estate in Topeka includes single-family detached homes, condominiums, townhouses, estate properties and land lots.

Topeka Living |

Topeka Real Estate Market: Prices of Topeka Houses for Sale

Single-family homes dominate the real estate market in Topeka. Selection and price ranges for these homes are varied. The starting price is well below $100,000. Three-bedroom homes in the Sherwood Park area begin in the high $100,000s. Larger homes with four bedrooms can range anywhere on the scale depending on the area. Estate properties in Topeka start in the low $300,000s and may range up to $800,000 and more. These homes include fireplaces, swimming pools and spacious wooded lots with considerable acreage. The availability of townhouses and condominiums in the region is limited compared to that of single-family dwellings. A standard two-bedroom townhouse in Topeka can be purchased for less than $80,000 with prices ranging upward to $160,000s depending on locale.

Topeka  For Thursday, January 10th, the current national mortgage rate for a 30 year fixed mortgage is 4.51%; the 15 year fixed rate is at 3.90%. For a loan larger than conventional conforming loans, or ‘jumbo’ loan, the 30 year rate is 4.41%, while the 15 year jumbo rate currently is at 4.12%.