Real Estate Valuation Modelling for Tokenized Property
Real estate and prop tech
Real estate’s evolution is being powered by proptech (property technology). Real estate asset tokenization is an emerging trend representing the convergence of real estate investing and blockchain technology. Tokenization helps asset owners raise capital more efficiently, and gives investors unprecedented access to private real estate investments, transparency, and liquidity.
BigRoom: Property data operating system
BigRoom is a real estate startup that is focused on disrupting how we manage our real estate assets by using market data, tokenized assets and modern applications. The problem today is that most residential real estate ties up a majority of a family’s capital and net worth but we only know its value when it’s time to sell it. We also lack the tools for being able to leverage its value without slow and antiquated bank processes. Big Room connects physical real estate to the digital layer.
Building a digital layer and connecting market data
The solution to making real estate dynamic is to start with the digitization of the property. We defined the digital roadmap for tokenizing property using Ethereum ERC20 technology that allows for an asset to maintain an accurate ledger of transactions and ensure distributed node security. Tokenized property then acts as the hub for connecting to the complex system of financial, insurance and marketplace services needed for modern management. We developed the ERC20 token and the protocol for managing groups of properties.
Valuation modelling and Tokenized property
For valuing residential real estate, the project uses a modified Comparable Sales Approach which identifies past and current transactions of comparable properties. Property value is indexed based on attributed and then analyzed using public market transaction data and market trends based on historical and near term data to forecast a value band. Trend information is also generated using public real estate data and real estate listing networks including data.gov, Zillow and MLS.
Property value dashboard
We designed and developed a mobile and web interface that allows people to see their visualized band of property value in real time. We also made it easy to see transaction history, mortgage details, historical price trends and integrated finance services all in one place.