The challenges on the regulatory side is that who will be the registered owner on regulatory's records of the tokenized property.
The fact that these tokenized real estate are own by multiple persons and/or companies, will it be considered as a partnership organization?
It would be easily to regulate on the Government side if they acknowledge it as a partnership. Then the taxation and legality treatment
will be followed on the partnership organization.
The tax implications and other issues regarding structure are certainly important, but the big regulatory concern in the US is really regarding securities law and trading of the tokens. That's the biggest hurdle as it really decreases liquidity and essentially kills the main advantage of tokenization (which would be democratized access to real estate investments). If you look at crowdfunding in the US via regulation-CF you'll see how the US efforts to introduce new ways for startups to raise money have failed. There's so much red tape and regulation that even though someone might be able to become an investor in an early stage startup and invest as little as say $100, it's literally a more complicated process than getting a mortgage (you basically have to go through a type of KYC, provide your social security number, income, multiple disclosures on risk, etc). And that's not even considering the difficulties reg-cf portals have with escrow and accepting different types of funding as that's more or less solved by using crypto.
