The traditional business of Real Estate investments rely on buying property for the lowest price with the best possible terms, and maximising rental incomes: essentially creating the highest potential ROI (Return on Investment). Strictly focusing on rental income properties - both residential and commercial, any landlord must work to not only keep occupants, but attract additional occupants in case of rental vacancies. Concomitantly, landlords must manage maintenance issues, ensure bills are paid, including any mortgage obligations and generally operate the property in a good and professional manner.
It is, however, not easy to break into this traditional model: rental properties require larger down payments than for example a primary residence, and often higher interest rates and taxes are expected. On top of the debt service, the investment property requires upkeep, maintenance and management which costs additional expenses. Ultimately, unless an investor has investment money - that means money they can risk, it is almost impossible to develop a traditional real estate business.
Leaving aside the possibilities of winning the lottery, inheriting family money or finding a bag of cash under the bed, most people will have to work to develop the downpayment necessary for the above. That might mean working for years and investing in a home that may appreciate and return a good profit after a sale. If that home is a 2 or 4 family property it would require living in close proximity to tenants and managing the property for years before being able to leverage or even sell for profit. Each takes time and requires patience and hard work.
Sure, there are other options: using spare money to buy stocks etc., or investing in crypto currency and hoping values increase. These options may generate a profit, but they may also leave an investor with nothing. And, as traditional methods go, this will not guarantee the ability to access the traditional Real Estate (RE) investment market.
So, what other ideas are out there?
A New Way Forward
Fractionalised Real Estate (RE) Rent Roll (RR) Investments: The Opportunity to buy into a percentage of an investment property rent roll.
This is not possible with traditional methods. Making the RE investment as a sole investor with all the accompanying responsibilities requires capital, and more likely 30%+ of the purchase price. For a property valued at 1 Million USD, this would require $300,000 plus closing costs, an appraisal, insurance, up front costs (earnest money) and broker fees. Secondly, it requires finding the right property. This is no easy feat: RE sales brokers tend to keep the good properties to themselves or friends. After that, they will offer them to their best customers or people who they have worked with in the past. And, if none of these options are available they will offer the property to the open market, and that may very well mean that the property is not that great!
However, type B operates on a different plain. Instead of being a sole buyer with sole responsibilities and risk, type B collectively pools investors through ‘fractionalized’ buying thereby spreading the risk and allowing small investors to become part of something much bigger, something they would not be able to fund or manage by themselves.
The following is a brief outline of our NFTRE type B process:
a. After KYC clearance, investor joins project via NFT purchase
b. Investor funds are collected and pooled
c. Project purchased - secured.
d. Balance of Pooled funds move into investment strategy
e. Additional RR funds added monthly
f. Funds compound daily for project period
g. Project reaches maturity within set period
h. Investment strategy terminates. NFT holders ‘cashed-out’. Pool becomes zero.
i. Project closed.
Basic Project Mechanics
Type B requires the investment property to be placed into a new LLC, where, for their NFT investment, the investors are entitled only to a percent portion of the Rent Roll. The balance of the percent portion is used to pay ongoing costs up to 30%: Maintenance, Insurance, Taxes.
Sale and Transfers of NFT
Contingent on the specific project, an NFT holder may transfer / sell their NFT at any time at their chosen price to any pre-approved and pre-registered buyer. This secondary buyer must qualify to be able to access NFT’s. All transfers will move through XCFS exchange system. Note: not all projects allow transfers. XCFS will apply a service charge for this action.
Not all approved and available projects are strictly Real Estate. Projects may be Commodities, Businesses, Development Projects, Hotels, Shopping Malls, Gold Mines, Warehouses, Brand Business, Agencies, Retirement Homes; even Art.
Any feasible, strong Asset, Business or Real Estate can bring the returns we require for our fast, targeted APY for the mutual benefit of those involved
Indirectly, a portion of the project income comes from income derived from the business of the asset. For instance, a real estate NFT will be funded by the Rent Roll income of the project. A hotel project NFT will be funded by the income generated from the hotel. And, as a third example, a project involving a gold mine will generate income from the mining and sale of produced gold.
The derived income from the asset is collected along with additional funds from the NFT sale and managed through crypto trades to generate daily yield returns. Compounding returns over the period of the project will generate the targeted APY for our investors. If our APY generates faster returns we will close the project earlier. Greed is the enemy.
NFT Security and Mitigated Risk
In all offered projects, there is an element of risk. The significant portion of NFT pooled funds are used to secure the property or asset. It is this action of security that can mitigate any losses to the project that might occur. The following is an example that is applicable again to all offered projects: If a project involving a large income producing mixed use property fails to perform, the project will be sold, and all funds particular to the project will be divided between the existing NFT holders, as outlined in the project prospectus. It is the intention of the project administrators to hit their APY targeted return. If this does not happen, the administrators will liquidate the project and make the investor as whole as possible.