California-based QuantmRE has provided equity release solutions for $300 million worth of properties since their founding in 2017. With the help of Securrency, they are now launching the EQRE stablecoin. The real estate backed coin aims to bring homeowners increased access to their home’s equity and helps real estate investors diversify their portfolio through fractionalized interest.
Security tokens continue to transform the conventional real estate market. Last week, it was announced that a $30 million luxury Manhattan development was tokenized on Ethereum. Now, the latest news centers around a recent partnership announcement between QuantmRE and Securrency, along with the launch of QuantmRE’s Regulation A+ offering of the EQRE token.
QuantmRE and Securrency Working Together to Enhance Real Estate Financing
QuantmRE is the world’s first blockchain-based real estate marketplace which features fractionalized interests in single family residential homes.
Securrency claims to have the world’s first multi-ledger token standards— the CAT-20 and CAT-721. This means that their tokens can be issued on various distributed ledgers: Ethereum, Stellar, Ripple, and others.
Through their security token issuance and maintenance tools, Securrency offers the ability to issue self-governing security tokens, programmable for global compliance regardless of jurisdiction. If regulations or issuer requirements are altered, their ‘Rules Engine’ provides the ability to update all circulating tokens.
QuantmRE’s CEO, Matthew Sullivan, described how his enterprise plans to utilize the services offered by Securrency.
“Robust, frictionless regulatory compliance is a critical component for the mass-market adoption of cryptocurrencies that operate as securities. QuantmRE will use Securrency’s versatile suite of technologies to launch its globally compliant, blockchain-based platform that will enable its members to diversify their investment portfolios into fractional real estate assets, as well as giving homeowners the ability to unlock the equity they have built up in their homes without having to take on extra debt.”
But in simple terms, what does this partnership actually mean?
How Blockchain-Based Assets Can Transform Conventional Real Estate
First, QuantmRE’s services include a ‘shared equity’ program. Typically, QuantmRE will purchase a 10-30% portion of a home’s equity, directly from the homeowner. This purchase is not a loan; there are no monthly payments, interest, or debt, which differentiate the system from traditional financing methods such as a home equity line of credit, or a second mortgage.
So, for example, consider a homeowner who purchased a home for $300,000 with a $50,000 down payment, and a $250,000 mortgage. Over time, the home has increased in value to $400,000. Now, in order for the homeowner to liquidate the added value, they will have to go through a long process of borrowing against this new appreciated value.
This is precisely the problem QuantmRE is trying to solve. By selling a portion of their home’s equity, homeowners have increased access to their home’s appreciated value, and can sell that for fiat in a groundbreaking way.
Second, QuantmRE offers an ‘Active Portfolio’ which allows for independent investors to build, manage, and trade a customized real estate portfolio. Of course, the main asset here is blockchain-based, fractionalized real-estate. The primary benefit is increased investor access, due to a low minimum investment barrier which is absent from traditional real estate investing.
Once the homeowner decides to sell their home, QuantmRE receives a financial payment for the appreciation experienced by their previously purchased equity portion, which is then distributed to the those who own the digital assets.
What do you think of such new methods of real estate financing? Will such an approach transform the real estate industry? We’d love to hear what you think in the comments below.
Image courtesy of Pixabay.