Real estate in Detroit has long caught the eye of speculators. The concept of buy low, sell high is the standard practice when it comes to property. But over the years there have been some new players in the Detroit real estate market. One of the world's largest real estate cryptocurrency marketplaces has been sweeping up properties and selling them to multiple investors, sometimes even to hundreds.
This growing trend in real estate, known as tokenization, involves companies purchasing properties and listing them in a digital marketplace. The properties are then divided into hundreds or thousands of tokens, which investors can purchase.
"You can sort of subdivide these tokens into as many fractions as you like," Aaron Mondry told Stateside. "It's a very flexible way to buy and sell pieces of real estate.”
But the concern, Mondry said, is that because there's not one person tenants can turn to when things go wrong, problems on these properties start piling up. Mondry is a senior reporter at Outlier Media who has been investigating how an out-of-state firm is swooping up Detroit's real estate.
A company named Realty, based in Boca Raton, Florida, has been acquiring residential properties across Detroit since 2019.
“They told me they own around 1,000 properties, 2,000 units,” Mondry explained. “And they subdivide these properties and then they operate their own marketplace where people can buy tokens for $50."
The appeal of purchasing “stocks” in these properties lies in the ability to cash out at any time. But for those Detroit residents living in these homes, necessary repairs are going unaddressed for months.
Background reading
Hear the full conversation with Aaron Mondry on the Stateside podcast.
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GUESTS ON TODAY’S SHOW:
Aaron Mondry, Senior Reporter at Outlier Media
