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You Can Now Invest in Real Estate Using Bitcoin

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LAS VEGAS–(BUSINESS WIRE)–Prime Trust, a technology-driven trust company, announced today that it
has released new technology which enables real estate syndicators and
securities issuers to accept funds from investors in the form of Bitcoin
and Ethereum, frictionlessly and with zero crypto-market risk to the
syndicator or issuer. This enables holders of these virtual currencies
to invest in real estate, crowdfunding and other private and public
securities offerings without having to go through the cumbersome and
often confusing process of liquidating tokens and then wiring funds in
USD to an escrow account at Prime Trust.

With Prime Trust’s transaction technology, real estate syndicators,
portals, platforms, brokers and direct-issuers can now accept
investments with minimal friction, regardless of whether the investor is
remitting funds to escrow via wire, ACH, check, credit card, Bitcoin or
Ethereum.

How it works: Historically in Prime Trust’s standard escrow
business for the securities and real estate industries, funds could be
remitted via ACH, wire, check or credit card. The firm’s transaction
technology presents the investor with funds delivery instructions
specific to the method they chose to send funds. Bitcoin and Ethereum
work the same way. Prime Trust’s systems present BTC/ETH delivery
instructions, including a unique wallet address and QR code for the
specific transaction (see attached example photo).

Using these straightforward instructions, the investor can easily and
securely complete the transaction. Prime Trust’s platform keeps the
syndicator or issuer informed by updating the accounting records for the
offering to note the investor’s funds have been received, including the
net amount, and automatically sends email notifications (customizable by
the issuer) to the investor.

“Demand for people to be able to use digital currency as a method of
remitting funds for investments they make in real estate, as well as
traditional Reg D, Reg A, Reg S, and Reg CF offerings has been
dramatic,” said Scott Purcell, CEO of Prime Trust. “After years of
leading the crowdfunding and real estate industries with
technology-driven escrow, compliance, KYC, AML and other services,
adding Bitcoin and Ethereum is a natural extension of what we provide
our portal, broker, real estate syndicator, adviser and direct-issuer
customers.”

The technology is now out of beta and released for select Prime Trust
customers. It is available both via API’s and via the Prime Trust
“Invest Now” plug & play transaction engine. It is highly scalable and
can be used for both initial (primary) offerings, as well as for escrow
and clearance of secondary transactions by exchanges.

More information about Prime Trust’s products and solutions is available
at www.primetrust.com.

About Prime Trust

Prime Trust is a chartered Nevada trust company that as a Qualified
Custodian provides custody of cash, tokens (aka “coins”), stocks, bonds,
private business interests and other assets. It also provides compliance
and specialized services relating to funds processing, AML/KYC
compliance, and transaction technology for the new digital economy. As a
blockchain-driven trust company, its mission is to provide portals,
platforms, brokers, real estate syndicators and direct-issuers with
best-in-class solutions to seamlessly meet the needs of their securities
offerings and of exchanges and secondary markets. As a trust company,
Prime Trust provides a wide array of account types, including simple
custody, IRA’s, asset protection trusts, health savings accounts and
college savings solutions, all of which are designed to hold any asset
class.

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Real Estate

How Tech Solves The Real Estate Investor's Two Biggest Problems

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I started investing in real estate in the early aughts, and clearly a lot has changed since then. In my infancy as an investor, I was frustrated by the lack of tech available for networking and finding investment-quality properties. On the heels of that was the need to connect so I could secure capital for investments. In my desperation, I tried to use MySpace to find the resources needed to launch my investment career. It’s not hard to imagine how ineffective that little experiment worked out.

Since that time, I’ve seen up markets, down markets, feast or famine in funding, and inventory levels that can make or break the average real estate investor’s deal flow. I’ve also seen institutional buyers enter the single-family residential investment property market. While that alone had a massive impact on the local buyer of investment properties, nothing has changed the face of real estate investing like technology and the ability to move money and properties faster than ever. What I was looking for back then has come to fruition through my company and others as well. Tech and big data have joined forces, and it’s changed the way real estate investors find and fund investment properties.

Tech Solutions For Finding Investment Properties

In the not-too-distant past, it was only larger institutions that had the power of big data to satisfy their appetites for investment properties to turn for profit. Clearly technology had already come to the aid of institutions and the average homebuyer. Institutions have been using tech to buy properties in bulk for years and have had unprecedented access to critical data needed for sound investment decisions. Then there are sites like Zillow, OpenDoor and, more recently, Zillow Instant Offers to serve the typical homebuyer.

But real estate investors as a whole have an entirely different subset of needs in the real estate technology space. Finally, the combination of advancing technologies and big data has handed local real estate investors access to two major components of every real estate deal: properties and funding.

Online tools for locating distressed properties and contacting motivated sellers are available to any wholesaler or flipper with the wherewithal to access them. As it was put in Attom Data’s April 2018 Housing News Report, “Data, being what it is today, is able to simplify the job of the investor looking for properties. Using the latest technology and advanced algorithms, smart data filters and overlays, real estate investors can access big data that provides more than names and addresses. Smart tech and big data combined also puts phone numbers, email addresses, social profiles into the hands of investors making direct mail an alternative rather than the norm. With the wealth of data now out there, it’s a fact that the aggregation of the right data for the job can empower progress in any industry.”

Tech Solutions For Funding Investment Properties

In the funding arena, Lending Tree and Rocket Mortgage, among others, have put technology to work to close more loans faster for the owner-occupant homebuyer. For the larger institutional investor, along came The JOBS Act of 2012. It changed the ways institutions fund properties and projects when it opened the doors to crowdfunding — and the entire process is handled through technology and crowdfunding portals.

So where does all of this leave the real estate investor who is looking for funding to purchase investment properties?

As we experienced after the crash, investor funding dried up. As a result, distressed properties weren’t purchased, and the market suffered. It took some time, but lenders finally recognized the missed opportunities. Capital started pouring into the investment property loan market, and lenders sought ways to bring that money to the market.

Technology now plays a major role in the way investors access the cash needed. Money follows opportunity, and accessing funding via online portals is the rule, rather than the exception. The Lending Tree model has been applied to investor funding, and the result is faster, easier access to capital for investment.

Tech and big data are no longer reserved only for the average homebuyer and big institutions. The savvy real estate investor uses both to advance his or her real estate investing objectives. I’d call it a win for the industry as a whole when MySpace isn’t a go-to source for finding and funding investment properties.

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BC Real Estate Association forecasts 21 percent fewer residential property sales this year

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Tough new mortgage rules are being blamed for a sharp drop in the number of housing sales across the province.

Today, the B.C. Real Estate Association predicted that residential sales would fall 21 percent by the end of 2018—from 103,768 units last year to 82,000 this year.

That would take a big bite out of commission income for B.C. real-estate agents.

“The B.C. housing market is grappling with a sharp decline in affordability caused by tough B20 stress test rules for conventional mortgages,” BCREA chief economist Cameron Muir said in a news release. “While these rules have had a negative effect on housing demand across the country, the impact has been especially severe in B.C.’s large urban centres because of already strained housing affordability.”

This year’s largest forecasted drops in sales are in the Fraser Valley (down 26.3 percent) and Greater Vancouver (down 25.7 percent). Sales are expected to increase by 1.9 percent in northern B.C. in 2018.

Slower sales would also seriously affect B.C. government revenue through the property-transfer tax.

Finance Minister Carole James has forecast that this tax will generate more than $2.1 billion in this fiscal year ending on March 31, 2019. But through the first six months of 2018, it raised less than $900 million.

The BCREA predicted that housing sales will rise eight percent in 2019 to 88,700 units. Greater Vancouver housing sales are expected to increase by 13 percent in 2019.

The multiple-sales-listing price of homes across B.C. is anticipated to go up 1.9 percent this year across B.C. and in Greater Vancouver. In 2019, MLS prices are expected to increase 5.3 percent across B.C. and 3.3. percent in Greater Vancouver.

The report noted there are strong fundamentals driving the housing market, including low unemployment, which is putting upward pressure on wages.

In addition, the news release pointed out that the millennial generation is entering their household-forming years.

The report stated that the “pullback” in housing sales is “helping alleviate a chronic shortage of supply”.

“After trending at decade lows last year, active listings in the province were up nearly 20 per cent in July,” it said. “Even the supply-strapped Vancouver market has experienced a 30 per cent increase in active listings over the past year.”

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Real Estate

UK's Purplebricks comes to Canada in a bid for real estate disruption: Don Pittis

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An international online property powerhouse has purchased one of the world's top web-based, commission-free real estate companies in a bid to shake up the Canadian home-selling industry.

Last month's successful $51-million bid for Quebec-based duProprio means "For Sale" signs bearing the name Purplebricks will soon start popping up across Canada, says the company's president, Michael Bruce. Also watch for some major advertising campaigns.

Traditional Canadian real estate agents scoff at the idea Bruce can disrupt how homes are sold here with his discount model that charges a flat fee for the services of a real estate agent rather than a sales commission.

But from a standing start in 2012, Purplebricks has taken over about five per cent of the British market and has expanded to Australia, the U.S., and now Canada.

Powerful in Quebec

Based on market share, the Canadian company that Purplebricks bought is itself a global leader in discount real estate services. Within Quebec, duProprio commands about 20 per cent of the market.

The biggest selling point of both Purplebricks and duProprio is avoiding the five per cent commission traditional brokerages charge.

As of last week, the Canadian Real Estate Association reported that the average Canadian resale house now goes for $481,000. The duProprio online calculator says using its services on that average house would save you more than $27,000.

DuProprio, acquired last month by Purplebricks, controls about 20 per cent of the Quebec real estate market, although it is little known in other parts of Canada. (DuProprio)

"In my opinion, that's very misleading," says Christopher Alexander, an executive with real estate firm ReMax.

Alexander says studies have shown that for-sale-by-owner transactions earn significantly less on the market.

"So, sure, you save $27,000, but if you could have gotten an extra $50,000 on the sale of your house, you're losing money," he says.

Honda or Porsche

Alexander says doing a property deal can be "pretty scary" and having a full-price broker to hold your hand can make a difference. Not only that, he says, with traditional brokers you only pay if the sale goes through.

"Like any industry, you can pay a premium for a good service," Alexander says. "You can buy a Honda, or you can buy a Porsche."

According to Purplebricks's Bruce, the reason his company has done so well is that people would rather only pay for a Honda. And rather than being a for-sale-by-owner company, he says Purplebricks offers full agent services without Porche pricing.

A spokesperson for ReMax real estate in Canada says buyers and sellers benefit from full-service brokerages: 'You can buy a Honda or you can buy a Porsche.' (Jonathan Hayward/Canadian Press )

"What Purplebricks is, is a flat-rate, fairly-costed, full-service real estate agent," he says.

The company focuses on marketing and driving new clients to its website. Then licensed real estate agents are sent out to those clients to provide their professional services, from initial pricing to helping with negotiations.

Good agents badly used

He says the conventional industry recruits agents who are good at property transactions but then misuses them.

"Actually, 85 per cent of their time is spent acting like marketers, trying to prospect, trying to find the next customer, and they're not very good at it."

He says Purplebricks takes that duty off their hands. 

"We create all the opportunity, so therefore that frees them up to deliver an exceptional service to customers."

He says the company is efficient and can offer discount services because it has little office space and its agents spend their time doing what they do best.

Could discount brokerages shake up real estate the same way Uber disrupted the taxi business? (Will Oliver/EPA-EFE)

As to getting a worse price than traditional firms, Bruce says that's not what the U.K. numbers show.

"We sell houses faster, we get more money for our customers than our competitors, and that's why we're the most positively reviewed real estate agent in the world," he boasts. However, the company has also been accused, in Britain and Australia, often by competitors, of misleading the public with its advertising.

While duProprio is already doing a roaring business in Quebec, its subsidiary in the rest of Canada, Comfree, is a less familiar name. But Bruce says those Comfree signs will be among the first to be replaced by the Purplebricks brand.

However, as ReMax's Alexander says, Purplebricks won't be the first discount real estate company to try its luck in Canada. He notes low-priced services are easier to offer when houses sell quickly. Some say last year's downturn in the market was what put the knife into Toronto-based discounter The Red Pin, which went broke in June.

On the other hand, as Red Pin CEO Keith McSpurren said at the time, the Canadian real estate industry is still ripe for disruption.

Certainly Purplebricks has deeper pockets than The Red Pin ever did, especially after a recent $200-million investment from German publisher Axel Springer. Purplebricks is spending some of that money expanding outside Quebec. The jobs page at Comfree has a series of recent listings.

If it is done well, grabbing a share of the real estate business with discount services is not so far-fetched. 

Discount services in the financial and insurance sectors, as well as familiar names such as iTunes, Uber and Airbnb, have all disrupted their industries at the expense of traditional players.

And if Purplebricks is a success here, watch for the big players to try to join the party.

Follow Don @don_pittis

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