Real Estate

Real Estate

Highest real estate sale ever in a cryptocurrency

With the value of $22.5 million, or more than 18 million euros. The very luxurious Arte Surfside residence, on the waterfront of Miami Beach in Florida, in the southeastern United States was paid for entirely in bitcoin.

This is the highest real estate sale ever in a cryptocurrency in the United States, reports the American financial magazine Forbes, Monday June 7, 2021.

Investing in stone to “preserve your fortune”
The apartment is located on the ninth floor (out of twelve) of the residence. It is a very luxurious property, which covers 470 m², specifies the website specializing in economic news Business Insider. It has four bedrooms, as many bathrooms and, above all, a huge 274 square meter terrace that overlooks the ocean.

The buyer(s) remained anonymous, and if the sale took place on May 27, the American media did not mention it until the beginning of June.

Why did the real estate developers behind this project agree to carry out this bitcoin transaction?

Indeed, the price of bitcoin, volatile, has suffered recently, between a turn of the screw from the Chinese authorities and the messages posted on Twitter by billionaire Elon Musk which caused its value to fall.

The idea of ​​the promoters was to attract rich investors, with a fortune in bitcoins, and willing to invest part of it in the “real world”, in the words of Giovanni Fasciano, one of the two promoters.

It starts from the premise that a person with a substantial sum of money, in one currency or another, will want to “invest it in real estate” , in order to “preserve his fortune and his inheritance” . The two promoters, however, did not give specific information on how the transaction took place.

Is Miami the capital of bitcoin?

This is not the first time that an apartment or house sale has taken place in bitcoins. Dozens of such transactions have taken place in the United States in recent years.

For 2017 alone, the American real estate brokerage firm Redfin already listed 75. And Florida, the state where Miami Beach is located, is particularly concerned by the phenomenon.

Three years later, Francis Suarez, the mayor of Miami, “praises his city as the world capital of cryptocurrency”, indicated the American daily The New York Times, at the end of March 2021.

In February, the elected official had already indicated that he was considering allowing the inhabitants of the region to pay their local taxes in bitcoins, and municipal employees to receive their salaries in this virtual currency.

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Real Estate, FAQs

Can I buy real estate property in the US if I live outside the country?

Buying a home is a step that requires deep analysis. It is not only about the place where you are going to live, but the amount and the years that are going to be invested.

Some nonresident aliens have chosen to buy a home in the United States. The most requested payment is in cash.

Buying a house is a step that requires a deep analysis. It is not only about the place where you are going to live, but the amount and the years that are going to be invested. CNN published a video in which the details that the potential foreign buyer should know are listed.

According to data from the National Association of Realtors, between April 2019 and March 2020, foreigners acquired a volume of houses in the United States worth $74 billion , it is quoted in the audiovisual. 61% were people who had recent residence in that country. With Texas, New York, California, Florida and New Yersey being the top five most preferred states.

CNN reports that purchasing conditions differ between those who are not Americans and permanently live outside the country and recent residents (or visa holders).

Of these two groups, the second has more facilities to buy a residence because it is easier for banks to acquire information about their finances. However, CNN highlights, there are foreigners outside the US buying houses, mainly from China, Colombia, Mexico and India .

So can I buy a house in the United States if I live abroad?

According to the publication, although there is no law that prohibits foreigners from buying houses in the US, there are prohibitions related to national security that can vary by state.

Knowing these rules in advance, you can buy a condo, but with certain limitations, says the American media.

Nonresident aliens tend to buy with cash, compared to those who do live in the United States. The latter opt for financing because they have greater access to banks in the country.

This is an alien reality for those who are outside. CNN highlights that there are no loans subsidized by the Federal Housing Federation for non-resident foreigners. This makes banks more demanding.

The requirements are made innumerable because financial institutions cannot access the credit history of the future buyer and have to apply another procedure. Added to the list is that the initial value is high. There are banks that ask for up to 20% down payment , says CNN.

Interest also goes up. In these cases it is 8% , according to Fidelity Group. Another limitation is that the property cannot be a reason for moving but for investment . The foreigner needs to demonstrate that he has economic stability in the country he resides and that his intention is to rent the house or use it for another activity.

CNN also highlights the taxes each state collects annually from homeowners. The foreigner will have to pay them even if they do not live in the United States.

In conclusion?

Buying a house in the United States is not an easy procedure, but it is not impossible either. At first, non-resident foreigners can buy their home, although with cash the process is easier.

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Real Estate, FAQs

Beginner’s guide on real estate investing strategies

Real estate investments are one of the greatest sources of wealth in history. Of the total global assets, 60% corresponds to real estate. Learn to invest even with little money.

What is real estate

Real estate, real estate or farms are the things that cannot be transported, such as land and mines, and those that are permanently attached to them, such as buildings. Real estate investments include sale, rent and other business models related to real estate.

Tax dictionary, supplemented by income passive.co

Is it good to invest in real estate?

Knowing if investing in real estate is a good business is one of the most frequent questions of those who want to venture into this field.

We are going to answer the question from several angles:

First, according to Wealth X , 7.6% of wealthy people built their fortune in real estate.

On the other hand, according to ecyY (founder of the information and research center for Development and research on construction REDBRIC) of the total global assets, 60% corresponds to real estate.

According to a Morgan Stanley survey , 77% of millionaire investors in the United States own real estate investments.

With these data there is no doubt that real estate investments CAN be an excellent business. That said, it’s important to say that like all businesses, it has risks and downsides, which we’ll talk about later in this article.

Robert Kiyosaki’s phrase is famous , perfectly applicable to real estate investments:

“Risk is not the investment but the investor.”

Kiyosaki

Real estate has some characteristics that make it excellent investments, however, it is important to have a solid strategy and well-founded knowledge when investing.

In response to the question: Investing in real estate can be an excellent business if you select the right business model for your situation, knowledge, available assets and market situation.

Read on to learn more about low-cost real estate investment business models.

Countries to invest in real estate

Investing in real estate is a more local investment alternative than other options such as stocks, mutual funds or bonds. The success of a real estate investment depends on many local aspects, such as the growth of the market in a specific area, in a specific segment and at a specific time. In addition, knowledge of local regulations and codes is essential.

With this in mind, often the best place to invest is the one you know best . If you live in Philadelphia, you will probably have access to more and better sources of information about the used housing market in that city than if you live in San Francisco or Miami.

On the other hand, in case you need resources, such as tax advisers, real estate lawyers or even plumbers or electricians, you are better prepared if your investment is in the place you know best.

Despite the above, there are many ways to invest in other countries, such as REITs, real estate ETFs among other figures that we will see later in the article.

The best countries to invest today, according to the Fine Homes and Living portal are the following:

United Arab Emirates: It is a country with tax benefits in which it is feasible to obtain high returns for real estate investors. There is no income tax. It is possible to achieve an income yield of 5.19%.

Germany: It is a safe bet for investors looking for opportunities in Europe. Germany is a super power and a thriving economy with stable conditions.

France: Another popular destination for real estate investment in Europe. France is the best option for real estate investors looking for a long-term return. Mortgage interests are low and it is possible to finance up to 85% of the value of the properties.

United States: It is considered the best country for real estate investments. Several cities score high in the rankings of the best destinations for real estate investors, such as Los Angeles, San Francisco, New York and Washington DC.

Other countries to consider are: Canada, Australia, Turkey, Indonesia, Colombia, the Philippines and Morocco

Advantages and Disadvantages of investing in real estate

We start with the downsides of real estate investments:

Disadvantages of investing in real estate:

  • High transactional costs: Buying or selling real estate has numerous associated costs, which vary with the country and the city. Taxes, fees, contributions, notary fees, agency fees, property transfer costs are just some of the frequent outlays.
  • Low liquidity: Selling real estate is slow, unless you sacrifice a significant part of the asset. It is faster to sell stocks, bonds, shares in funds than real estate.
  • Real estate requires management and maintenance, which carries additional costs.
  • The real estate markets have significant inefficiencies. This point is in both the advantages and the disadvantages, precisely because inefficiencies can play for or against.
  • Real estate often carries financial and legal liabilities. If you have a property, the pipe breaks and floods the apartment below, you have a responsibility. It is essential to cover yourself with insurance against all risks.
  • High cost: In most cases, real estate has a high cost, which inhibits many investors without much capital to invest in them. This can be mitigated by using financing or investing in other business models that require low capital.
  • In the case of rental properties, there is often a time of no income when one tenant leaves and another enters.
  • The tenant (s) can stop paying. When renting a property it is advisable to take out rental insurance to maintain the rental income, even if the tenant stops paying.
  • The real estate market is very local. When changing city or country, taxes, costs, recovery areas and the dynamics of the sector change.
  • Events outside the property can drastically change the value of the property: Pollution, noise, new contiguous developments, new legislation, among many others. This point can eventually also lean towards the advantages. More than one neighborhood has been greatly appreciated by new roads or shopping centers in the area of ​​influence.

Advantages of real estate investments

  • Double income for valuation and rent
  • Good refuge from inflation
  • Easy to understand investment
  • Real estate market is inefficient, allowing bargains to be found
  • Real estate assets can be easily financed because they provide collateral for the lender.

Why Invest in Real Estate?

In addition to the advantages that we indicated above, investing in real estate has some characteristics that make it very attractive:

  • In the long term they tend to appreciate
  • They are relatively passive investments, that is, the administration of a property requires less management and time than many businesses
  • It is possible to build scalable businesses from real estate.
  • Positive cash flow: by calculating and executing the financing conditions well, it is possible to have one or more properties with a positive cash flow, which allows the business model to scale.
  • It is possible to improve assets, increasing valuation and income.
  • The same property can produce income for life.
  • It is possible to start with very simple business models, such as buy and sell or buy and rent, and move towards more complex business models (such as buying land and building) as you have more knowledge and experience.

How to invest in real estate with little money

Fortunately, there are business models, which we will see in more detail later, through which it is possible to invest in real estate without much money. Some of them are:

  • Securitization
  • Real Estate Crowdfunding
  • ETFs
  • Pro-undivided funds
  • REITs

Real Estate Investments: 12 business models

Today there are numerous business models for investing in real estate of all kinds, for all budgets and levels of experience and knowledge.

Next, we will list some of these models, so that you can choose those that best suit your current situation:

Buy and sell (flipping houses)

It is one of the simplest models that exists, however, there are techniques to make this modality a scalable and sustainable business over time. It should be mentioned that it is not a passive business , in the sense that it requires a lot of work to execute it properly.

The essence consists of buying a property and reselling it at a higher price, in such a way that a profit is obtained from the operation, after subtracting all the implicit expenses. People who are dedicated to this business specialize in obtaining information on dations in payment or auctions, in such a way that they manage to buy real estate at prices lower than the market average.

Buy, remodel and sell

A very frequent variant consists of remodeling, renovating or improving the property that is purchased. As the goods that these investors buy in many cases are in poor condition, by improving their standing, the expectation of the sale price increases significantly.

Buying, remodeling and selling requires knowledge, dedication and a team of specialists, so that the operation results in profitability.

By “team of specialists” I normally mean a real estate agent, a construction contractor, a real estate agent who helps to find the appropriate properties for purchase, a real estate attorney who is proficient in the study of titles and the buying processes and transfer of ownership. Having a good accountant to support you in the tax planning of operations is highly recommended.

Buy and rent

This is another type of figure, in fact, it is the one that I have used the most for years. Unlike buying and selling, this operation seeks to keep the property for a much longer period of time, which makes it a much more passive type of business.

Buying and renting is a real estate business model applicable to various types of properties: housing, commercial, industrial and offices.

Buy and rent furnished

This variation in the figure of buying and renting is very common in some cities, and in some sectors in which the term of the rental contract is short, say months and up to a year. The furniture impacts the rental fee upwards, so that the purchase value is amortized.

Buy, remodel and rent

It is a variation of the buy and rent model, according to which it is sought to increase the value of the rent through an improvement of the property. As always, it is necessary to calculate if the value of the remodeling is recovered through the higher value of the rental fee.

The phrase is called “buy, rehab, rent, refinance, repeat” (BRRRR for its acronym) which ultimately seeks to use mortgage credit (long-term and low rate) to cover the costs of remodeling through the refinancing of the remodeled property.

REITs

REITs are an abbreviation for Real Estate Investment Trust, that is, Real Estate Investment Trust. A REIT is a publicly traded real estate investment company (usually the owner and manager of real estate that produces rental income).

In the same way as a company can issue shares that are publicly traded and investors can buy them to be co-owners of the company and receive a fraction of its profits through dividends, in the same way through a REIT a person can be co-owners of large residential or commercial real estate and get part of its profits.

REITs earn their income from the rental fees they collect from tenants on real estate and / or interest on mortgages and transfer most of the income to investors, via dividends.

On the other hand, REITs and their investors profit from the gradual depreciation of the properties they own.

There are currently 3 types of REITs:

Capital REITs:

They are owners of large residential properties (buildings, apartment complexes or complexes of houses) or commercial (hotels, offices, shopping centers, data centers, medical centers, cell phone antennas and industrial estates, among others) and obtain their profits mainly from rents paid by the tenants of the properties

Mortgage REITs

They own the mortgages backed by real estate and derive their income mainly from the interest paid by the borrowers.

Mixed REITs

They are companies that own both real estate and mortgages and derive their income from income on real estate and from interest on mortgages.

To give you an idea of ​​the popularity of these instruments, according to the Morgan Stanley report , 35% of millionaire investors in the United States own REITs.

ETFs

ETFs is corresponds to Exchange Traded Funds in English, or Funds Traded on Stock Exchanges. For a more detailed explanation, we invite you to read the article on ETFs and index funds .

In short, a REIT ETF is a collection of REITs that are traded as a complete package. For example, the Vanguard Real Estate ETF is a fund that is traded on the stock exchange under the symbol VNQ and is made up of REITs in various real estate sectors:

  • Properties for health centers: 8.6%
  • Hotels and Resorts: 2.5%
  • Industrial properties: 11.5%
  • Residential real estate: 13.2%
  • Specialized REITs: 42%
  • Shopping centers and warehouses (retail): 8.1%
  • Offices: 7.4%

among others.

By investing in ETFs containing REITs we can increase diversification by type of property (residential, commercial and industrial) and by geographic region, since the properties are located in different countries and continents.

If at first glance it seems a bit complex, don’t be scared. Both REITs and ETFs are widely used instruments that you can access through an investment account. In the article on ETFs and Index Funds we give you some suggestions.

However, it is important that you read the prospectuses, know the historical behaviors and raise awareness about the risks and mitigations before investing.

Real Estate Crowdfunding

Crowdfunding is another figure that allows you to access real estate investments, even if you don’t have a lot of money. In our article on Crowdfunding and Crowdlending you can go deeper into this interesting concept.

Real estate crowdfunding is a model that seeks, through a technological platform, to unite investors and promoters of a real estate project so that it can be carried out.

For example, if I want to build an apartment building in a certain specific location, but I don’t have enough money to finance the work, I can present the project to a specialized platform, so that potential investors know about it, review and compare the profitability and risks against other projects. If they are attracted to it, they will invest their money in the project, and it will be built.

Securitization

This scheme is similar to REITs, although they have some method differences:

A securitization company sells the securities to investors like you, and in return you receive a right to benefit from it .

In other words, if the securitization company builds an office building, you are entitled to a fraction of the rent that tenants pay monthly in exchange for your money.

Important: You are not a co-owner of the property. You own the usufruct rights over the asset.

Divide properties

Dividing a house into two or more apartments or a large apartment into two small ones is sometimes possible and very profitable and other times it is totally impossible.

The demographic profile of families in most countries has changed dramatically. 50 years ago it was not uncommon to find families of 6, 7 and even 10 people.

In the following graph with data from the United States Census Bureau we can confirm this trend.

Today most families are small (having only 1 to 3 people) .

This change makes large houses and apartments oversized for the need of the average family. In addition, the high prices for buying and renting real estate makes us look for smaller flats.

Given these perspectives, the division of real estate makes a lot of sense.

NEVERTHELESS…

Carrying out a work of these characteristics may require the permission of the joint ownership and of the respective governmental entity: the city council or the mayor’s office.

To apply for permits you must do a complete project, which has architectural, structural, legal and financial implications, among others.

Build and develop real estate projects

In the development of real estate projects, there is usually the greatest potential for operating profits while owning the property and greater capital gains at the time of sale.

It is a risky process, but a satisfying one, once executed successfully.

The process of developing real estate projects requires a lot of knowledge in various areas, such as finance, engineering, urban legal, commercial and project management among many others, as well as a team of professionals each expert in their area.

What is understood by real estate development:

According to Ben Bulloch & John Sullivan , real estate development is the process of creating value by making tangible improvements to real estate.

Developing a real estate property is achieved either by building structures, modifying existing ones or generally improving a real estate property in a way that increases its value. Real estate includes permanent or temporary land and structures that occupy this land.

The phases of a real estate development

  • Pre development: understand the market; find the property, analysis and study of the property; the area, the local regulations; design; negotiation with tenants; cost analysis and redesign and negotiation with the community.
  • Construction
  • Post development: There are generally two options. Maintain it and operate or sell it.

Tourist income through the sharing economy (Airbnb model)

Through this model you can rent your apartment, your house or even a room inside the apartment you live in. It allows you to obtain additional income from a property that you own, even if you live in it.

We include this modality in the list of ways to invest in real estate with little money, since you do not even have to own the property. On the other hand, you can receive more money through Airbnb or Booking for tourist housing than through a conventional long-term rental.

Airbnb: The other side of the coin

So far there are many advantages, however, it is necessary to take into account:

  • Tourist rents through sharing economy platforms are not a passive business model.
  • Many cities, mainly those that are tourist destinations, have modified local legislation so that homes for tourist use have identical conditions to those of hotels in fiscal and tax terms. In other words: if they allow it, you do pay taxes like a hotel.
  • In many cases, the homeowner must request authorization from the co-ownership to make tourist use of the property.
  • The administration of tourist properties is expensive: admitting visitors, receiving the property for departing visitors, fixing, provisioning, repairing damage, etc. This implies more time and additional costs.
  • There are wonderful guests and others not so much: it is necessary to be very selective when accepting reservations.

Real Estate Investments as Property for Undivided or in Community

It is possible to buy a property between several people. If you and your friends want to buy an apartment for tourist rental in Barcelona and neither of them wants to invest all their assets to buy it, they can buy it together, so that they acquire it and benefit from it as a community.

When the property in joint venture generates income, these are distributed in the same proportion in which each co-owner owns the property.

The costs associated with maintenance and improvements must be borne by all co-owners pro rata of the participation of each one.

Aside from the obvious advantages, you have to anticipate the possibility that one or more will want to sell their stake and that the others will not want to sell.

Conclusion on real estate investments

  • Real estate investments have been a tool for generating wealth for centuries
  • It is possible to invest in real estate through numerous modalities, including some that require practically no capital. We have mentioned the following:

1 Buy and sell

2 Buy, remodel and sell

3 Buy and sell

4 Buy, rehab, rent, refinance, repeat

5 REITs

6 ETFs

7 Real estate crowdfunding

8 Securitization

9 Divide properties

10 Build or develop real estate projects

11 Tourist income through the sharing economy

12 Assets owned by individuals or in the community

  • All real estate investment models have advantages and disadvantages, as well as implicit risks that the investor must know, anticipate and mitigate through planning, knowledge of the rules and code and mitigate in the company of the work team constituted, among others, by a expert in real estate law, finance, construction, accounting among others.
  • Some options are much more difficult and risky than others. Get started in the world of real estate investments with the easiest and least risky options, such as REITs, ETFs or securitization.

As your knowledge and experience grow, study and prepare to venture into other increasingly profitable business models.

Start preparing now to have your real estate investments. In a few years you will see how you achieve an entire emporium.

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Real Estate

Bill Gates is the largest owner of private farmland in the United States

You say Bill Gates and immediately algorithms, technology, incomprehensible mathematical calculations and screens of any kind of cutting-edge device spring to mind. Few people know, however, that, at 242,000 acres, Bill Gates is the largest owner of private farmland in the United States. For years, according to The Land Report Gates, one of the richest men in the world with a net worth of nearly $ 21 billion according to Forbes, has been acquiring agricultural land in states like Florida and Washington.

This year the size of Mr Gates’ huge land portfolio that spans as many as 18 states. The largest properties of the American billionaire are in Louisiana (69,071 acres), Arkansas (47,927 acres) and Nebraska (20,588 acres) and, in addition, has a stake in 25,750 acres of transitional land west of Phoenix, Arizona. According to the authoritative magazine addressed to those who have an interest in owning agricultural land, the properties of Gates are held both directly and through third parties such as Cascade Investments, which is the personal investment vehicle of Gates. Cascade also includes other investments such as Ecolab, a food safety company, used car dealer Vroom and the Canadian National Railway. It may come as a surprise that the one who became a billionaire thanks to technology and foresight in this sector is also the largest owner of overseas farmland, but this is not Mr. Gates’ first agricultural initiative.

In fact, already in 2008 the Bill and Melinda Gates Foundation had allocated $ 306 million in grants to support and promote sustainable high-yield agriculture for small farmers in sub-Saharan Africa and South Asia, in addition to having further invested in climate-resistant “super-crops” and high-yielding dairy cows. Furthermore, the foundation last year gave birth to Gates Ag One, a non-profit organization that aims to carry out these projects. It is still not entirely clear how Gates’ land is being used or whether some are set aside for conservation. Surely, however, the land will be destined for projects in line with the philosophy of the Foundation, Cottonwood Ag Management, one of the subsidiaries of Cascade is in fact a member of Leading Harvest, a non-profit organization that promotes sustainable agriculture standards to protect crops. soil and water resources. The Microsoft founder isn’t the only American multi-billionaire on The Land Report’s list of top farmland owners : Wonderful Company co-founders Stewart and Lynda Resnick ranked third and use their 190,000 acres to produce. products for their brands including POM Wonderful, Wonderful Pistachios and Wonderful Halos.

Gates is the largest owner of private agricultural land, but he is by no means the largest individual agricultural owner. In the list of the top 100 landowners The Land Report ranks John Malone, president of Liberty Media, which owns 2.2 million acres of ranches and forests, third with 2 million acres is Ted Turner, founder of CNN and Amazon CEO Jeff Bezos ranks 25th with his 420,000-acre property primarily in West Texas.

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FAQs, Real Estate

What is fractional real estate?

Founded in January 2019, RealT is an American company based in Florida that offers fractional investment in real estate in the United States market through the Ethereum blockchain.

a) Fractional real estate: real estate investment for all?

In general, when you buy real estate you own it 100%: it is yours and yours alone. However, with the emergence of blockchain in recent years, a new concept has emerged: fractional real estate.Fractional real estate is based on the tokenization of goods: concretely, this results in the division of a good into token. Each token represents part of the ownership of the asset.Let’s take an example: a house that costs $100,000. To be able to buy it at 100% (classic real estate) you must pay $100,000 (cash or via a bank loan).With fractional real estate you can decide to buy only 10% of this house: in effect, the house has been divided into token. It was arbitrarily decided by the seller that the house would be divided into 1,000 tokens with a unit value of $100.Thus, if you want to own only 10% of the house, you will have to buy 100 tokens for a total value of $10,000. You will then be co-owner of the property and you will receive 10% of the annual rental income.What are the advantages of a fractional real estate investment?

  1. It’s more affordable: you only invest what you can afford and you don’t need to get a bank loan
  2. You reduce the risk of non-payment of rent: you can invest in several different properties to reduce the risk of non-payment of rent.
  3. You become an owner more quickly: during a classic real estate purchase, it takes at least several months before becoming an owner. With fractional real estate on the blockchain, a few hours is enough.
  4. It’s easier: no need to have a bank account in the United States or to be physically present for the signing of the contract!
  5. You keep your rights as owners: when a decision has to be made, a vote takes place on the blockchain.
  6. You can resell your tokens at any time : need liquidity? You can resell your tokens to RealT or resell them on the secondary market using Uniswap.

b) Tokenize real estate

It is this notion that is most often the most complicated to understand for people who are new to cryptocurrencies and blockchain: when I explained the concept of RealT to my mother the first time, she asked me if I had bought the toilet or the living room.In reality, when you buy a token, you are not buying a part of the house, you are buying a part of a company that owns the house: This company will own only one asset: the house or the building that the house is owned by. ‘we want to transform into a token. Thus legally the owner of the property is a company which itself is owned by investors through tokens. Each token represents a small part of the company and therefore by buying tokens you are actually buying a company which gives you back the money it receives from the tenants of the property.

c) Buying your first token

When buying your first token from RealT , you will have to register on the platform and fill out a form to indicate your identity. Once this has been verified, you can buy your tokens on the site.

If you are familiar with how cryptocurrencies work (You know how to create an Ethereum wallet, send and receive ethers, secure your wallet…) then you can go directly to the RealT website .

For beginners and for people who are not yet very comfortable with cryptocurrencies and the Ethereum blockchain, I recorded a video training in which I explain step by step how to invest on this platform .

d) Payment of rent

Rental payments are made in USDC, a stablecoin (ie a cryptocurrency that tracks the price of a fiat currency. Here, the USDC tracks the USD, the US dollar). The rents are sent to your Ethereum wallet. You can then convert your USDC into USD, EUROS or any other classic currency.Originally, rent payments were to be made daily, but due to the increased transaction fees on the Ethereum blockchain it was decided that rent payments would take place once a week on Wednesday. The RealT team is working on a new payment system that will allow them to have more flexibility.

e) Reinvestment of rents and secondary market: Uniswap

When you own at least one token of a real estate then you are part of the whitelist of investors for this good and you have access to the secondary market which uses the Uniswap protocol .Uniswap allows you to create liquidity for a RealToken : some investors may decide to sell their RealToken on Uniswap and therefore allow other whitelisted investors to buy back their tokens at the price of the Uniswap price. Thus, even if all the tokens appear as sold on the RealT site , it is possible to continue buying them on the secondary market as long as you have purchased at least one on the RealT site and that you are therefore on the white list.On the RealT website , you are obliged to buy a whole number of tokens: 1 token, 2 tokens, 10 tokens… This is not the case on Uniswap where you can buy fractions of RealToken : thus, you can buy 0.237366423943342345 or 3.748320394325346346 tokens if you like! In particular, this allows you to reinvest the rents you receive without waiting for the amount needed to buy a full token on the RealT site .

f) The revaluation of the property: the annual audit

Over time, the value of a property changes: to allow investors to follow this development, RealT uses an independent auditor to assess the value of the property each year. This audit is then made available on the property sheet on the RealT site .The evolution of the value of the good also causes another parameter to evolve: the price of the token. Therefore, if the value of the asset increases, the value of your token increases and you can resell it for more.

g) Resale

With classic real estate, the resale of real estate can be long and complicated: this is not the case with fractional real estate because you do not sell all the property, but only the fraction that belongs to you ( your tokens).There are currently three ways to resell your tokens:

  1. On the RealT site : The company buys back your tokens from you at the price in effect on their site for a sales charge (a small percentage of the total amount). RealT will then release them for free sale on its website.
  2. On Uniswap: You can put your tokens on Uniswap and wait for someone to buy them back from you. The price is set automatically by Uniswap based on availability and demand.
  3. By directly finding an investor who is already on the whitelist: Thanks to the Telegram group and the Discord server, you will quite easily find an investor who can buy back your tokens. You will set the price yourself in agreement with the buyer.
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