A protocol being built on Cardano Blockchain network to serve the real world needs to identify, verify and trade real estate globally
Small investors can now invest in real assets for small denominations. Large retail investors now have an international platform to invest in assets hosted directly by the owners and have an instant settlement via this platform. In addition real time trading of real estate will be possible via this platform. Hence true value unlocking of real world assets would be made possible, allowing more liquidity to flow into this ecosystem than otherwise would be possible.
In this global liquidity pool of buyers, you can easily raise capital once your asset is verified and hosted online. The transaction is instantaneous if buyers agree in the bidding process. Because you can sell even 0.1% of your asset, you can choose to raise capital in incremental amounts without totally diluting ownership. You can even choose to retain buyback rights to the equity sold (so as to retain ownership) using an agreed buyback price within a limited time frame, set at the time of selling the stake.
Real estate agents acting on behalf of the owners can host the real estates on equal terms as the owners themselves. They have the same role to play as the owners and also be able to take a share of the transaction cost if agreed to with the owners.
Once you have completed the KYC / AML checks required to validate real world assets and their ownership, the process of bidding and acquiring funding for your house or apartment is fairly straight forward using our bidding / marketplace auctions. Money will be transmitted within minutes of the bid closure.
Once you and your asset has passed compliance and ownership checks, you can sell part of your asset at fair price on the Reitcircles marketplace. Global investors will be looking for proper assets to invest in, with high growth and long term ownershIp perspective.
When owners sell part of their assets on the Reitcircles platform, they have the option of buyback within a particular period of time, against a payout to the investors. And this means that the owner is able to tap into the value of the house and invest this capital for urgent needs. And then buy back his share to retain complete ownership of the asset.
A new form of insurance product based on crypto tokens will be provided to the stakeholders. So if the house owner wants to release his equity then he can take this insurance that will allow total payback of the principal to the investor and automatic token release to the owner. Please contact us for more details.
We are connected to partners who will provide the verification service so that you can easily be onboarded onto this platform. This will include an asset survey report and submission of various relevant documents based on which the asset can be hosted on the platform for bidding by investors globally.
Allows one to invest in one's own choice of verified properties, in an international platform. Also time based investment horizon is possible where one invests say for a 2 to 3 years time horizon. In addition due to lack of long process and waiting times due to banking intermediaries, the transactions and value transfer is instantaneous.
Normally when we buy managed assets there are extra hidden costs associated with these instruments. One risk of non-traded REITs (those that aren't publicly traded on an exchange) is that it can be difficult for investors to research them. And with advent of tokenized assets we have a direct verification for each of the assets that a person is invested into including the exact equity they hold. Totally transparent and the rates in a particular city, provice, city, country will be reflected in this market price action. Hence we have far better information outreach that can be leveraged to take better decisions.
The housing market overall will determine the effect of the macro factors such as interest rate. When rates increase leverage on the financial market for the real estate decreases as capital can be deployed in banks to get equivalent return. And lending becomes more expensive. Since on this platform we are dealing with assets which are very liquid and not leveraged, this effect will be very low. Here on a peer to peer basis people sell their assets to raise some capital for themselves. Thus temporary dip in prices of assets can be offset by the high demand from global customer base and higher liquidity.
Non-traded REITs have little liquidity, meaning it's difficult for investors to sell them. In this case the global platform removing the need of any centralised intermediary between buyer and seller, is ideally suited to remove this liquidity topic. Now we can buy/sell small amounts of assets and people with small capital 1000 USD can invest in an asset to buy 0.01% of equity for example.
Due to stringent checks on individual assets being hosted on this platform, we are able to assure stakeholders (buyers/sellers) on the condition of the asset and the owner/lender. This level of transparency for each and every asset would ensure high level of trust for all, and due to removing all the intermediaries like banks, agents etc, we are able to offer better deals / offers in the marketplace.
Please contact us and we will soon be in touch with you
ReitCircles is a platform that enables individuals and corporations to monetize their equity in real-estate holdings in an international open market by selling partial ownerships into their assets without losing control over the assets.
What are the values of the ReitCircles?
ReitCircles is a platform that makes any real estate accessible to global markets for investment. Equity owners can raise cash by selling partial stakes without losing control and have the option to buyback. Real estate agents can use this platform to create a global business.
As an owner of real estate, what are the key benefits of using ReitCircles?
Currently, the owners must sell the entire real estate to raise cash. ReitCircles enables the owners to sell partial stakes into their equity to a global market. Global markets can provide better prices at higher liquidity. Owners won’t lose control over their property while retaining the option to repurchase it.
Can you give an example of when an owner would use this platform?
Suppose a couple with kids moved into a new big house and face unplanned expenses. They have equity in the home but cannot tap into it for cash without refinancing it at a higher loan. If they are out of a job, then refinancing is no longer an option. Personal loans can carry a high interest rate, and the principal must be returned in a specific timeframe. If they host their house on ReitCircles, they can raise capital by selling a small stake into their equity. After that, if their financial situation improves, they can buy back the equity on the platform.
How does partial ownership work? Who retains the residential rights?
The owner who is selling equity or raising funds owns the residential rights.
For the owner, is there any upper limit till which he can sell his house equity?
Yes. The owner can sell up to a maximum of 75% of his unencumbered equity.
Does the owner retain the right to sell the property on another platform after selling a stake in his equity at ReitCircle?
No. As long as another partial owner of the equity exists on ReitCircle platform, it can only be traded at ReitCircle. If the owner has chosen the buyback option, that option must be exercised to first end partial ownerships on the platform.
Does the owner have a buyback option for his property?
Yes. The owner has a buyback option provided he chooses a fixed period for this buyback at an agreed-upon appreciation rate.
How does the ReitCircle platform ensure the security of the capital transacted?
All users undergo the KYC/AML process before transacting on the platform. A locked account with the amount reserved for the bidding is locked in a distributed manner for all the investors. This is mandatory for participating in the auction. Additionally, insurance coverage can be purchased on the platform as well.
How are the assets priced in the marketplace?
The owner can list the assets at the desired price and change it. The owner can also allow bidding until a hidden reserve price is reached, at which point the transaction goes through. Finally, we provide a recommended price based on supply-demand data for similar assets.
What is the minimum offer I can make for a listed asset?
The minimum offer can be up to 0.2% of the asset hosted on the marketplace.
If I want to revise my bid on the marketplace, what is the process for doing this?
Every bid has a price and a duration. Once an investor has placed a bid, the funds are placed in escrow until the bid’s expiry. A cancellation bid before the expiry will incur a penalty fee.
If I want to cash out of my investment, what are my options?
Sell to another investor in the marketplace.
Can the asset terms and conditions change after listing?
Once a listed asset has been traded in the marketplace, the terms and conditions are fixed. If the owner upgrades the house and improves its value, he can relist his unencumbered equity at a higher price. It is in the owner’s interest to keep the details regarding the property constantly updated on the platform to allow better pricing for any future sales, thus benefitting all investors.
Can I list a rented property?
Yes. The partial equity owners won’t have residency rights to the property.
What are the taxation laws on equity transactions?
Sellers and investors are responsible for tax compliance.
Is there any holding period of the equity before I can transact it?
What does it mean to Tokenize real estate?
Traditionally, regulated financial institutions, escrow agencies, title insurance, county records, and notaries played the role of trust keepers. They ensured that the financial system and real-world assets are transacted and recorded in an approved way. Blockchain technology rigidly enforced that trust. As a result, lower costs and faster settlement of transactions enable a global marketplace for all real-estate assets. The unit of value used on this blockchain is called a Token. And using this value unit, we can now transact real estate assets between buyers and sellers. This process is called tokenization.
What is blockchain, and how does ReitCircle use this technology?
A blockchain is a chain of software blocks where each block contains a record of value transactions happening on the network. The creation of each block is governed by a mechanism known as proof of work (POS) or proof of stake (POS). In POW, we solve a mathematical problem, and the one who solves this the fastest is granted the right to create a block and insert the transaction inside that block. Furthermore, each block is linked to the other by a hash of the content of the other block. In POS, the blocks are verified by a group of actors (computers in the network), and the selection of these actors is based on the amount of tokens (stake) they hold. Both these systems embed Trust via a chain of transactions, and this chain continues to become more robust, over time, against attacks and manipulation. That is why even though the chains are open-sourced, and data is visible to the public, no one can change the content of these chains. And since Trust can now be delegated to the chain, intermediaries like banks or notaries are no longer needed. This trust disintermediation is the foundation of web3.0, and is explained in another article.
Can the equity bought on ReitCircle, be transacted outside this platform?
Not now, but eventually, the protocol uniformity will make this possible.
Is there any holding period of the equity before I can transact it?
What documents should we provide to identify oneself on the platform for buying and selling real estate?
As per country KYC/AML requirements, we will identify the person buying and selling on the platform.