Traditional Real Estate vs Real Estate 3.0

Key takeaways

  • Syndicates and REIT present attractive offers but always require compromises in terms of liquidity, tax benefits and accessibilty.
  • Real Estate 3.0 offers all the benefits of Syndicates, REIT and more in a single package.
  • The DCAP ecosystem allows even non-investors to benefit from the revenue generated by the real estate operations through the $DCAP token.

Real Estate

In order to invest in the U.S. Real Estate Market, currently, one must go through one of two ways: Real Estate Syndicates or REITs:

Large and lucrative investment opportunities

Tax Benefits

Less Liquid, longer hold terms

Difficult to qualify for

Unfair fee structure

Real Estate Syndicates

offer you the possibility to invest in physical assets including large commercial properties offering lucrative investment opportunities as well as several tax benefits, such as asset depreciation and 1031 exchange. However, these investments are largely available only to accredited investors (high net-worth individuals) and investors are locked-in for the agreed term posing a liquidity problem. Additionally, the General Partners (person charged with structuring and managing the deal) take up 30-50% of all revenue generated by the property without contributing any/or very little capital towards its acquisition.

Can invest small amounts

Pull money whenever

Diversified across properties

Dividends are taxed as ordinary income

Depreciation cannot be applied to other income

Real Estate
Investment Trusts

are modeled after Mutual Funds that own and manage income-generating Real Estate Properties. Investors can enter the fund with a capital contribution as low as $1,000. The income generated by the properties is distributed as dividends to the investors monthly or quarterly. Although as liquid as traditional stocks, unlike a Real Estate Syndicate Investment, they do not offer any tax advantages and capital appreciation as the investors do not own any shares of the physical assets.

Real Estate 3.0

Real Estate 3.0 is a term describing the new way of investing in real estate characterized by the tokenization of properties which is the process by which its ownership is fractionalized and recorded on a blockchain.

Tokenization of real estate

Fractionalized ownership

Recorded on blockchain

DCAP is bringing decentralized finance to the traditional Real Estate Syndicated market. Decentralization of real estate assets provides an unprecedented level of transparency allowing for a trustless system between investors that often do not know one another. By leveraging cryptocurrency and the tokenization of real estate assets, DCAP is able to introduce solutions not yet found in the market.

The tokenization of revenue-generating properties, confers all the tax benefits of owning physical real estate assets along with generating passive income. The liquidity issued by this process is unrivaled even by the REITs. Furthermore, it allows for non-accredited investors to get on some investment opportunities and benefit from the DCAP fund structure which reinvest all revenues into the ecosystem (learn more about the DCAP structure here).

Comparison Chart

Tax benefits
Passive income
Accessible to anyone
Diversified investments
Transaction transparency
Seamless 1031 exchange