Many people are convinced that real estate is exclusively “slow” money. However, when it comes to fintech, the main asset is precisely speed. Real estate funds and white-label crowdfunding software platforms form a specific ecosystem in which the closing of transactions takes place not in months but in a couple of weeks. A significant advantage is also that the dollar works more transparently than ever.
A Brief History: From Securities to API
The REIT model was born in the distant 1960s when regulators in the United States allowed retail investors to buy commercial real estate in installments. This formula managed to prove its success. Dividends were generated through rental payments, and asset appreciation was directly proportional to the market. But the archaic nature of the operational side remained. An endless number of bank checks, calls to brokers, and paper signatures — all this chaos significantly slowed down the circulation of capital. Undoubtedly, the emergence of electronic signatures helped accelerate these processes. But the true quantum leap was ensured thanks to the “API-first” architecture, in which data “migrates” without additional human intervention.
Where Traditional REITs Are Holding Back
The digitalization trends in the world are widely recognized, yet some funds continue to rely on a diverse array of tools. Brokers create Excel spreadsheets, and lawyers approve edits in PDF format. The compliance department then conducts KYC through a third-party service. The back office handles the manual import of payments.
This “seam” between data eats up too much time, sometimes days, and sometimes even several weeks. The lack of a “single window” for payments, manual verification of investors and projects, a rather complicated process of integration with a network of custodians and banks — these are all examples of the most common bottlenecks of a traditional REIT Market conditions are pretty volatile, so while documents are traveling between teams, you can lose not only time, but also money. The FED rate can rise significantly, and building materials are also clearly not falling in price. Therefore, the speed of market entry becomes one of the decisive KPI indicators.
White-Label as a Catalyst
A white-label platform is a foundation, base, or soil with ready-made modules that the company brands under its strategy and style. What does this mean in the context of REIT? Now let’s explain:
- Faster and, accordingly, more effective investor onboarding thanks to automated KYC/AML;
- The ability to simultaneously manage multiple jurisdictions exclusively from one account;
- Instant implementation of publishing offers and collecting online subscriptions.
The traditional model of launching a new investment fund can be compared to building a house “from scratch.” And if we are talking about white-label, then this is already a particular “skeleton” with ready-made key blocks, which significantly simplifies many subsequent moments.
What does the fund manager get in this case?
- Reduction of financial costs (no need for a large IT department).
- Saving time and resources (launch is implemented dozens of times faster).
- Expanded geography (access to international investors without the need for their physical presence).
LenderKit: practical case study
One of the leaders in the context of providers of such functions is LenderKit. The software of this company is suitable both for launching real-estate crowdfunding and for building a full-fledged REIT management service. This is possible thanks to the support of three types of models — equity, debt, and, of course, the hybrid model.
Below are examples of platform integrations:
- Payment gateways: Lemonway, HyperPay, Mangopay;
- KYC provider: VerifyInvestor;
- Blockchain adapter: Polymesh;
- Electronic signature: DocuSign.
Time to Market
The process of deploying the basic (fundamental) version typically takes 2 weeks but can extend to 1 month with minimal customization. The implementation of unique marketplaces lasts about 2-3 months. LenderKit, unlike ordinary developers, guarantees you an essential thing — while your competitors are collecting signatures and papers, your product will already start generating real cash flow.
Business Impact in Numbers
Let’s talk a little about the real numbers. In particular, an internal study by one of the platform’s clients (a real estate group from California) recorded that the average collection cycle for 5 million USD was reduced from 92 to 28 days. In addition, the volume of commission expenses for the project decreased by 30%. This was possible due to the absence of the need to verify investors manually, and auditors were provided with the opportunity to receive ready-made CSV reports directly from the system.
Challenges and Ways to Overcome Them
Cybersecurity and the digitalization process are not the best tandem; no one will argue with this fact. Suppliers that are maximally focused on the financial sector undergo regular pen tests and are certified according to ISO 27001. However, this does not exempt the fund from its responsibility to implement its SOPs, including a crisis response plan, network diversification, and MFA for the back office. The symbiosis of the provider’s SLA and internal security culture reduces the risks of platform downtime to almost zero.
Added Value for the Secondary Market
The liquidity of shares is like an open wound in the context of a traditional REIT. The white-label platform easily connects the tokenized secondary or bulletin board module. As a result, the share is transformed into a security token and is further traded peer-to-peer. It is worth noting that in 2024, the scale of internal transactions increased by 140%. This is direct evidence of a really high demand and a fast and flexible exit.
Roadmap for Transitioning to White-Label
- Conduct an assessment of current processes and identify the most “sensitive” areas.
- Create a list of must-have functions (such as payments, reporting).
- Choose a specific provider with extensive experience in your jurisdiction.
- Implement the launch of an MVP, then collect feedback from investors.
- Add secondary circulation and/or a mobile application to scale functions.
Horizon 2025+: Tokenization and ESG. What Awaits Us Next in This Area?
White-label infrastructure is gradually becoming a full-fledged platform for security tokens, which act as representatives of equity shares in buildings. Automatic distribution of dividends is facilitated by smart contracts, enabling the blockchain to immediately record ownership rights, thereby significantly reducing the costs of registers. ESG dashboards, which are simultaneously built into this entire so-called ecosystem, provide information on energy efficiency, which helps attract “green” investors.
Conclusion
The symbiosis of REITs and white-label software creates standards of a new format, thanks to which risks are reduced, the process of concluding deals is accelerated, and the price of the service is much easier to predict. Platforms like LenderKit are direct proof that launching an investment platform in a couple of weeks is no longer a dream; it is a reality that allows fund managers to get more time and resources to search for profitable opportunities. The next stage will be mass tokenization. In this case, white-label acts as its driver. Thus, “slow” real estate is transformed into another fintech expressway.
