Most people hate the process of buying a home or rental property and it is easy to see why. Several layers of middlemen, ranging from realtors to mortgage brokers to management companies, make the process cumbersome, expensive, slow, inefficient, and time-consuming.
A Panama based company called Prime-Ex Perpetual hopes to change all that with a new a new blockchain-based solution. The Prime-Ex team wants to make it possible to rent or purchase residential properties without credit scores or asset verification using its PEX Token and blockchain platform.
Prime-Ex’s basic idea is a simple but potentially revolutionary notion: put everything in the residential property development, sales, maintenance, finance, and management process on the blockchain. The hope here is to eliminate the many chokepoints that drive up the cost of housing, such as realtors, bankers, mortgage brokers, and management companies.
If all goes as planned Prime-Ex would be able to speed up the process, reduce costs, and possibly make instantaneous approval of real-estate transactions possible. One way this could be achieved is to make all payments in cryptocurrencies. That might eliminate the bank lending and credit checks.
Being Tested in Panama
The current plan at Prime-Ex Perpetual is to put the concept to the test in Panama. Prime-Ex hopes to build and sell between 20 and 45 luxury homes a year in the Central American nation for the next five years.
What will be different about those homes is they will be financed with Prime-Ex’s PEX Token. The Waves-based token will be used to crowdfund the homes, which are supposed to be sold to wealthy North American and European expatriates. Prime-Ex’s team thinks there will be a market for such homes because Panama is becoming a popular retirement destination.
Everything related to the development and sale of the homes will be done on Prime-Ex’s blockchain platform. Property selection, land development, construction, advertising, sales, financing, maintenance, and even renting are supposed to be done through the platform.
Real Estate Based ICO Scheduled for November
The process will be financed through the sale of the PEX-Tokens. Owners of the Tokens will receive 80% of Prime-Ex Perpetual’s audited net profit. Those profits are supposed to be distributed to Token Holders every year.
The presale of the PEX-Token began on November 1, 2017. An initial cryptocurrency offering (ICO) is scheduled for November 15 through November 30. Prime-Ex plans to sell 30 million PEX tokens. The initial value for PEX has been set at $1 USD, a minimum investment of $1,000 is required to participate in the ICO.
Interestingly enough Prime-Ex’s system is based on the Russian Waves blockchain operating system and not Ethereum. This will be something of a test for Waves because as far as I know is this the first time that a Waves based application has been made available outside of Russia.
Even though Prime Ex is built on waves, PEX Tokens can be purchased with British Pounds, US Dollars, Euros, Bitcoin, and Ethereum. Owners will have to set up a Waves wallet in order to store or sell the PEX Tokens.
Prime-Ex Bets on Panama
Prime-Ex is taking some huge risks here because it is taking on the real estate industry, which is powerful and politically connected. In the United States realtors effectively control many local governments, and dominate some state legislatures.
The company is taking those risks in a very realistic way by carrying out its Beta test in a small some out of the way market. It is also concentrating its efforts on a small segment of the market and selling to very specific high-income individuals.
The first crop of houses will be built within a two-hour drive of Panama City, Panama. The company hopes to build on both beachfront properties and in the popular Panama highlands. One reason why Prime-Ex chose Panama is that the team believes the nation has a stable economy that is poised for substantial growth.
They also hope to cash in on a growing wave of Americans, Canadian, European, and other retirees that are seeking a more laidback, lower-cost lifestyle, in warmer tropical climates. Panama certainly offers that along with a well-known financial center and good airline connections to North America and Europe.
Since a large area of Panama; the Canal Zone, was formerly administered by the United States there are also many English-speaking people in the nation. There are also many American residents and international law firms in Panama.
Disrupting Real Estate by Starting Small
By building only a small number of homes, it can test the platform and make sure it works they scale it up. Also commendable is the way the Prime-Ex Perpetual team plans to go slow and build only a few houses a year.
If all goes as planned, Prime-Ex hopes to build 10 homes financed with PEX proceeds and pre-sale another 20 homes next year. Those numbers will be repeated in 2019, increased to 30 homes built and 30 presold in 2020, 45 presold and 30 homes built in 2021, and 35 delivered in 2022. That makes for a total of 125 homes on Prime-Ex Perpetual’s drawing board.
Disrupting the real estate industry will be tough, but Prime-Ex seems to have the patience to begin the job. Only time will tell if Prime-Ex’s business and plan and technology can truly eliminate middlemen from the world of residential real estate.