Like many people in her generation, entrepreneur Susannah Vila’s life is always changing and the idea of staying in the same house or apartment just because she’s beholden to a lease makes no sense. “This next generation is becoming more transient,” says Vila, founder and CEO of peer-to-peer leasing marketplace Flip which launched in December of last year. “I created Flip for myself. It’s a secondary marketplace for leases, allowing anyone to buy a lease directly from the outgoing tenant or sell a lease that they no longer want.”

Vila got her start at Techstars, a prolific accelerator program that has helped launched dozens of startups including Digital Ocean, Placester and Pivotdesk, among others. The premise of her startup’s concept is that tenants should be able to treat their leasehold interest in a property as a marketable asset, rather than a burden. So she set out to simplify the experience of getting on and off of a property rental lease with just a few clicks.

“If you are on a lease that you no longer want you can post it on Flip either with a reward or a price for access to the lease,” explains Vila. “It’s legal because we pre-qualify all users so that it’s easier for people to get approval to either sublet or assign their lease from their landlords.”

Though statistics for rental applications containing misrepresentation are difficult to find, real estate document fraud is a multi-billion dollar problem according to FannieMae. Just like in mortgage lending, it’s the tenant qualification part of the lease flipping process that poses one of the biggest challenges for Vila and her team. To help assure landlords that the new tenant is qualified to assume a lease, Vila created the Flip Report — a document containing credit and financial data. “This will make the process seamless for anyone,” she says. “You can continue to update that profile as the years move forward so you can easily get an apartment that someone else is flipping.”

Integrating our reports with the blockchain is one component of how we are keeping everybody honest.

Flip prequalifies users for up to a specified rent amount. They will even guarantee sub-lessees for a certain amount of months of rent based on their financials. The reason they are able to do this is because the Flip Report contains verified financial, education and background information stored in a secure blockchain. Vila is working with a company called Tierion, a new but already well respected Bitcoin blockchain startup, to store the reports in an immutable and universally readable format.

Blockchain is a distributed database or public ledger, made popular by Bitcoin, that maintains a continuously-growing list of all transactions in a particular network that have ever been executed. The “blocks” are added in chronological order with cryptography to prevent tampering, thus becoming an indelible record of every transaction in the network and accessible to every participant.

“As a landlord and as a subletter you don’t want to rent to people whose identities – their finances and their backgrounds – you can’t trust,” says Vila. “Integrating our reports with the blockchain is one component of how we are keeping everybody honest and improving trust and reliability for both landlords and renters.”

The real estate industry is becoming increasingly excited about the potential uses of blockchain. On May 17th in Newport Beach, California, Vila will be participating in a first of its kind conference about using blockchain in real estate. The event, orgazined by the International Blockchain Real Estate Association (IBREA), will bring together top professionals from real estate and technology for panel discussions, working groups, and beachfront networking.

Another conference participant is real estate technology investor Zach Aarons. He chairs the New York City IBREA chapter, is a co-founder of real estate technology accelerator MetaProp NYC and a project manager for real estate developer Millenium Partners. Both Aarons and Vila are alumni of Columbia business school. They met at an event put on by the school’s real estate association. She pitched the concept of Flip to him and he became the first investor and a trusted advisor.

Aarons believes that Flip might be even more valuable to commercial landlords than residential, because of the longer leases involved—often ten years or more. Vila agrees. “Our platform enables people with any kind of lease – office, retail, residential – to flip their lease. That said, we are still piloting the commercial side. We’re operating under a working hypothesis that we can add the most value for office spaces with less than 5,000 square feet.”

Aarons is also bullish on blockchain for storing Flip Reports as well other records. According to Aarons, lease administration, especially on the commercial side, is cumbersome, time consuming, and complex. “With a digital lease on the blockchain, things like rent bumps and renewal dates would automatically trigger a notification to be pushed to both landlord and tenant at the appropriate time, ensuring that neither party misses any detail within a lease. This will ultimately lead to more standardization, less friction, and less pain for lease administrators.”

Despite the hype around the blockchain right now, Vila cautions other entrepreneurs against jumping on the bandwagon. “Don’t invest any time into integrating it into your product unless you have a clear business case for it,” she warns. “Blockchain adoption will only happen as fast as we develop practical use cases for the technology. As with any new technology, the best way to separate hype from practicality is to dig into examples of how it is being used now.”

Vila believes being part of IBREA and its upcoming conference is the perfect opportunity for entrepreneurs and real estate professionals to explore blockchain’s potential further. “I hope people come away from the event with a few examples of how the blockchain is being used now to move the needle on a business or organization’s mission and metrics.”

The IBREA Conference will take place on May 17th at Newport Dunes Resort and Marina in Newport Beach, California. You can learn more by visiting IBREA’s website. Cre.tech readers will receive a discount if they register using the discount code CRETech.

Travis Barrington

Travis BarringtonTravis Barrington is the Founder of propmodo.com, a new media property focused on the commercial real estate technology scene. He is also the Founder of High Rise Facilities, a website and magazine for owners and managers of tall buildings. He routinely participates in real estate events and logs a lot of airline miles from his home base in San Diego.