Financing plays a critical role in real estate investments because of the high capital requirement and the effect of leverage. Investment in properties can be leveraged as high as 90% depending on some factors such as asset class, market, the credit profile of the borrowers among others. A 90% financing of a property would imply that the owner or the equity holder will have to put down the remaining 10% of the required capital. Due to the effect of the positive leverage, this lower equity contribution generates higher returns for the investors. This feature of financing further opens up many avenues for the investors as they can use an amount of capital to take equity positions in many properties - referred to as diversifying a portfolio.
Realising the importance of financing in the real estate investments, RealBlocks will continue to pioneer technology in the real estate blockchain space, ultimately building out additional debt offerings to meet the needs of its investor base.
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