What is fractionalized real estate?
Fractionalized real estate is the concept of dividing ownership in a single real estate parcel into many different pieces, and having individual investors own the pieces. To put simply, imagine a residential single-family house located on a piece of land in a suburban neighborhood. Typically, one homeowner owns the deed to the house and land (or maybe up to a few people may be on the deed, depending on the ownership). If someone wants to buy that real estate, they would need to come up with the funds to make an offer to the current homeowner. This requires the potential buyer to have enough capital or qualify for a large enough loan to make the offer, which is an onerous and cumbersome process. Fractionalized real estate solves these problems by allowing investors to own a piece of the real estate rather than the entire parcel, so they can much more easily make the investment.