Max Property Group Brings Innovation and Transparency To
Despite being the most valuable asset
class in the World, the technology underlying the real
estate investment market has remained largely unchanged for decades. Max
Property Group, a real estate investment company in the Netherlands, having
suffered antiquated practices and outdated technology first hand, has developed
a platform with the potential to rock a US $228 trillion market.
The World’s Most
Valuable Asset Class
In 2016, the Savills World Research
team calculated the value of all global property at US $217 trillion
total. In 2017, their research showed
that global asset price inflation had grown by 5 percent to US $228 trillion.
To put this in context, real estate is
a more valuable asset class than all the stocks, shares and securities in the
world combined, as well as all the gold ever mined throughout history.
Yolande Barnes, head of Savills World
Research, said, “Real estate is the pre-eminent asset class which will be most
impacted by global monetary conditions and investment activity and which, in
turn, has the power to most impact national and international economies.”
In other words, the real estate
investment market has the power to affect the entire global economy.
Given the enormity of this asset class
and its potential impact on literally the world’s finances, it is peculiar that
it has not been more subject to disruption by the wave of startups and technological
advancements that have emerged in recent years. In fact, real estate
technology, with the possible exception of rental listing platforms, has not
advanced significantly in decades.
In addition to its sheer size, few
asset classes deliver passive income and capital appreciation levels comparable
to real estate, but similarly few are subject to the same entry barriers. These barriers can include access to banking,
credit scores, finance, cash requirements, and reliance on industry
professionals. This is particularly
applicable to cross-border investment, where anyone planning to invest in
another country will most likely have to make international trips, go through
several middlemen and navigate foreign languages, laws and cultural
The lack of transparency in the real
estate market is reflected in the fact that, according to the United Nations,
money laundering can reach up to US $2 trillion a year, of which a significant
amount is laundered via real estate transactions.
On a smaller scale, many home owners
have experienced issues such as properties with hidden damages, unknown debts,
problematic neighbours and a myriad of potential problems that can be
obscured. Title ownership records are often
specific to a country or region, making it difficult to ascertain ownership or
rights over a property. For example, the majority of U.S. states operate under
a land recording system wherein there are no governmental officials to make
absolute determination of the property title or whether a title transfer
transaction is valid.
This lack of transparency can make
almost every element of property investing difficult, risky and time consuming.
Costs and fees
International real estate investments
are subject to multiple, varying fees such as: exchange fees, transfer fees,
broker fees, legal fees, taxes, etc. not taking into account the cost of
consulting lawyers, tax advisors and accountants.
Because of the sheer number of
middlemen involved, international real estate investment can be an extremely
One of the most significant problems
with real estate investing is its lack of liquidity. When property investors wish to release their
cash from their investment, selling a property can take months or even years,
often leaving investors with their money tied up. Even investment funds often have a tie-in
period, which means that property investing often means committing cash to a
lock-in period of several years.
Similarly, buying and selling a
property can be extremely slow. According to a Chinese travel survey, 56% of Chinese investors spend over
a year selecting a US investment property. In general, it can take six months
to find a property and a further six months to complete the transaction.
Distributed Ledger Technology (DLT),
more commonly known as blockchain, is proving to be a major disruptive force in
the financial world, and is beginning to branch out into other areas in the financial
sector. One of the industries that DLT
could have a great deal of impact on is real estate, and specifically the real
estate investment sector. Blockchain
technology can greatly improve, if not overcome, some of the major hurdles
holding the real estate market back, making it more transparent, accessible and
Max Property Group (MPG) is a real
estate company based in the Netherlands with operations in Germany and the
United Kingdom. MPG has been managing
property funds since 2016, but its founders, including Munte Immobilien in
Germany, have been active in the real estate industry for decades. They also
engage in property sales, management and rental activities. Having endured the
challenges of the property investment sector first hand, MPG decided to
streamline the real estate investment process and has subsequently been
developing the Max Crowdfund platform since 2018.
Max Crowdfund is, or will be since
some features are still under development, a real estate investment platform
where real estate investment opportunities can be listed by developers,
purchased by investors, and overseen by authorities. The addition of DLT means that every
transaction is recorded on the blockchain and can be performed almost
instantaneously. Max Crowdfund is one of
the first platforms leveraging blockchain technology to disrupt the real estate
industry, proving that DLT can be used to modernise the real estate investment
market, and open it up to a global audience.
Perhaps the biggest disruptive
potential of blockchain technology in the real estate investment sector is the
elimination of high entry levels.
Historically, property investing has been exclusively for the rich, requiring
outlays of tens of thousands of dollars as a minimum, and often going into the
However, the tokenisation of assets
has made it possible to split up real estate assets into small parts, thereby
reducing investment levels to mere hundreds of dollars. For example, by placing its own property
funds on the Max Crowdfund platform, MPG has succeeded in lowering the minimum
investment amount from €10,000 to just €1,000, without affecting investment
returns, and are currently working on reducing this to €100. This means that anyone who has €100 can
become a property investor, joining the super-rich in enjoying asset-backed
investments with high returns.
This in itself is a game changer for
the real estate investment market.
Considering that real estate is the most valuable asset class in the
World, currently only accessible to the very wealthy, opening up the market to
regular people could become one of the most significant financial events in
Blockchain technology is resistant to
tampering and, once an activity has been recorded, it cannot be removed or
altered, resulting in an extraordinary level of transparency.
Every transaction that will take place
on the Max Crowdfund platform, whether it is an investment transaction, the
signature of a rental contract or a transfer of ownership, will be recorded on
The platform will also have a property
management feature, so that activities such as renovations, repairs, mortgages
and rental contracts can also be recorded on the blockchain. This way, when investors look at a property,
they can access important information such as its repair history, its rental history,
its previous sales price, etc. eliminating the need for agents and lawyers, and
reducing the risk of deception.
If blockchain technology was taken
further and adopted by authorities, it could theoretically lead to a global
land registry where all titles are recorded impartially under one,
Costs and fees
By automating much of the sales
process, Max Crowdfund has managed to eliminate many of the fees associated
with property investment. Agent fees are
eradicated completely as properties are carefully vetted before inclusion on
the platform, and all information relating to them is provided. Access to land registry documents, mortgage
information, company accounts etc. are all made available so that investors can
make informed decisions without the use of an intermediary.
Automation further eliminates fees
such as notary fees, legal fees, accountancy fees etc. Transactions happen electronically on the
platform, without the need for paperwork and are “witnessed” by the blockchain
without the need of “official” supervision.
Intermediaries are replaced by technology thereby fees are reduced to
relatively tiny amounts.
Historically, an individual or company
would own a property and in order to liquidate it, would have to: list the
property with an agent, market the property, wait for a buyer with enough money
to buy the entire property, then engage in the sales process which could
include structural checks, finance applications, price negotiations, etc.
With tokenised assets, an individual
or company owns a share of a property investment product which could be a
company share, property bond or brick (a fraction of a physical property) which
is represented by a digital token.
Generally, this would be in small units of €1,000 or smaller, and all
the information regarding the asset would be available on the blockchain. The process of selling this asset would
therefore require little more than placing it on the platform and trading it
electronically, an operation that could take just a few seconds.
Max Property Group (MPG) is made up of
real estate professionals with decades of real estate industry experience. Since its foundation in 2016, MPG has raised
several millions of Euros in investment and currently holds assets valued at
close to 8 million Euros (as shown in the Q2 2019 financial report). They currently manage properties in the
Netherlands (Rotterdam and surrounding areas), Germany (Lower Saxony region),
and the United Kingdom, as well as offering property sales services, running a
rental agency and operating an academy that provides seminars and workshops on
real estate and blockchain.
The idea for the Max Crowdfund
platform grew out of the company’s frustration with the historical barriers
affecting their industry, and their inability to find the technological tools
to overcome them. The development of the
platform has been successful with all milestones having been met to date. The platform has tens of thousands of
registered users from around the world and is functional on many levels, with
more features being added in line with the developmental roadmap.
Investing via Max
High quality property investments are
listed on Max Crowdfund, and registered users can purchase them, subject to KYC
and AML procedures, via the platform.
Payment for the use of platform is charged in Euros but paid in MPG
tokens. This allows of the transactions to
be registered on the blockchain. MPG
tokens have been in circulation since January 2019 and are listed on several
exchanges as shown on CoinMarketCap (https://coinmarketcap.com/currencies/max-property-group/).
Max Property Group is currently
applying for the relevant licenses from the Dutch Financial Authorities (AFM)
to operate Max Crowdfund. Once obtained additional licences for operation in
other jurisdictions will be applied for.
As soon as they have been granted, the platform will be opened up to
listing third party investment products.
Projects seeking funding will then be able to apply for listing on the
platform, and investors will have access to a greater diversity of high quality
MPG is currently holding an equity
round to pay for the final development of the platform as well as the licence
applications that will allow for third party listings. Details can be found on the Max Crowdfund
 Blockchain: Digitally Rebuilding the Real Estate Industry by Avi Spielman B.A.,
Philosophy, 2008 Vanderbilt University https://dspace.mit.edu/bitstream/handle/1721.1/106753/969450770-MIT.pdf?sequence=1