This interview is part of our new Blockchain In Real Estate series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and real estate.
In this interview we speak with Viktor Viktorov, managing partner and co-founder of REINNO, to understand how his company is using blockchain to transform the real estate business, and what the future of the industry holds.
1. What’s the story behind REINNO? Why and how did you begin?
VV: REINNO is a fintech company solving the illiquidity problem of commercial real estate. Why? REINNO’s co-founders experienced this issue first-hand and have the expertise to tackle it.
Take Barry Moniês, for example. He has been involved in analysing, financing, purchasing and managing millions of dollars worth of commercial real estate (CRE) for decades. He knows the CRE market and perfectly understands the needs of investors. Kristiyan Lozanov worked with some of the biggest banks (like Deutsche bank, Commerzbank) and IT companies in Western Europe. His 15+ years of experience in the IT sector combined with the insights into financial industry help us create innovative fintech products. I am a serial entrepreneur with over 12 years of experience of launching successful ventures. I’ve built companies from scratch and turned them into profitable industry leaders.
Together we came up with a solution that transforms real estate into a flexible investment instrument you can easily purchase and use as loan collateral. At the moment, our proprietary lending platform is the most efficient way of taking a loan backed by real estate.
2. Please describe your use case and how REINNO uses blockchain:
VV: REINNO is a fintech company that provides real estate tokenization and lending solutions with a focus on liquidity. Our offering allows using tokenized real estate as loan collateral and provides a paperless, hustle-free and quick access to cash. REINNO’s easy-to-use platform enables users to deposit tokens and receive funds instantly. We are destroying the limitations set by lock-in periods by letting our clients access the value of their investments in just a few clicks.
At the moment, even if an asset is tokenized, its value can be trapped by the lock-in period; plus, the secondary market is not fully established yet. REINNO’s lending functionality allows using tokens backed by real estate as loan collateral and getting instant access to funds with no hustle or paperwork. The clients have leverage over their investments since the lock-in period won’t prevent them from accessing the value of real estate. They get a chance to obtain funds instantly, choose the size of loan collateral (the number of tokens) and repayment conditions. We believe that using real estate tokens as loan collateral is the key to providing immediate liquidity to investors.
Blockchain technology is essential for REINNO’s offering. It allows us to represent property titles digitally, make their transfer more efficient, reduce costs and ensure transparency. Since the information about real estate is recorded on blockchain, lending can be truly instant – due diligence is done once (when tokenization is initiated) and no extra paperwork is required to take a loan.
3. Could you share a customer/user that benefits from what you offer? What has your service done for them?
VV: Currently, we are tokenizing a $32 mln worth of commercial real estate for one of our clients. Once the deal is complete, they will be able to sell a part of the property, use another part as collateral to get an instant loan, and keep the rest. Tokenization will unlock tax benefits by allowing our client to easily qualify for a 1031 exchange by selling and buying tokens within 45 days and invest in opportunity zones with less risk. They will enjoy extra security thanks to the blockchain technology that ensures full transparency and protection of records. By digitizing the process, REINNO eliminates the need for middlemen, making property-related transactions more efficient and saving our client money. Lastly, this real estate owner can forget the hustle and stress associated with the property-related paperwork – all the information is already stored on blockchain.
4. What other blockchain use cases in real estate are you excited about?
VV: We are very excited about blockchain in real estate crowdfunding. In combination with blockchain, crowdfunding decreases transaction fees and increases accessibility. Fractional ownership enabled by tokenization and crowdfunding allows entering the market with smaller investment amounts and diversifying portfolios. Individual investors are exposed to more offerings, can get direct ownership of an asset (bypassing funds and REITs) and gain more control. REINNO is partnering with a few selected crowdfunding platforms to establish an ecosystem where it is easy to tokenize, sell, invest and take a loan. We expect real estate crowdfunding to expand as properties are moving to blockchain.
5. Where will REINNO be in 5 years?
VV: REINNO’s ultimate goal is to offer the full spectrum of lending and investment products on the real estate market and provide a seamless transition for the consumer to blockchain-powered services. We are revolutionizing the industry and aiming at becoming the go-to lender for tokenized real estate investors.
In five years, REINNO will enable many investors and property owners to unlock the full potential of real estate. We will make investing in CRE and using it as loan collateral easier, faster and more accessible. The company will also educate the public about tokenization and popularize this concept in order to increase the overall efficiency of the fintech ecosystem.