NFT Homes For Sale Whitepaper
Ownership In Investment Real Estate Is Going Global!
***COMING 2022***
Information in this document is subject to change as developments are made. Edits will be noted and cited.
What is NFTHomes.forsale?
What our IRL Real Estate NFT marketplace is addressing is the overwhelming unbalance of owners in real estate. In today’s economy, on a global basis, it is getting harder and harder for average individuals to have ownership in their own homes, much less try to own investment properties. This is where our marketplace and blockchain technology comes into play.
Our mission is to democratize the global real estate markets to anyone who wants to be an owner! Not everyone can afford to purchase an entire property, that is why we use NFTs to split and tokenize our properties. This gives anyone, from any walk of life, the ability to be an owner in real estate, even if it is just fractional ownership.
We will start with our own properties, but the idea is for real estate investors who like to think outside the box, can wrap their property into an LLC, then sell off fractional shares of the LLC in the form of NFTs on a publicly verifiable blockchain. The property will be managed by the investor or a company of their choosing. Our company will then provide payment services for property tenants, to ensure accountability to ensure the NFT holders will receive their rent payments. This can be available via fiat payments or through cryptocurrencies like Bitcoin, Ethereum, Litecoin, and various stablecoins. Payments will then be sent to a DAO that will be created for each property for payment management. .
NFT owners can resell their property on the open markets for a higher price than they paid, or any price they set. They will also have the ability to auction off their share of a property. The rent payments follow the NFTs, so once sold, the new owner will start receiving their monthly rent payments.
What is a Blockchain?
Cryptocurrencies like Bitcoin and Ethereum are powered by a technology called the blockchain. At its most basic, a blockchain is a list of transactions and transaction history that anyone can view and verify. Essentially it is nothing more than a global, decentralized, ledger of transactions. The Bitcoin blockchain, for example, contains a record of every time someone sent or received bitcoin. Cryptocurrencies and the blockchain technology that powers them make it possible to transfer value online without the need for a middleman like a bank or credit card company.
Some advantages of blockchains are that they run on global networks that operate twenty four hours a day, seven days a week, unlike the traditional markets. Cryptocurrency payments offer a bit of privacy, although the transactions are transparent and auditable. Your wallet address, by default is not attached to your personal identification unless you have used it with a KYC enabled exchange. This personal privacy can help you from being hacked and scammed, but it also comes with its own set of risks.
Securing your cryptocurrencies and holding your private keys in a safe and responsible manner is one of the benefits of using digital assets. This allows you to move with your assets anywhere in the world, without anyone having the ability to take your assets. Just remember your private key phrase, and you are set.
For more information about blockchains and what they are, you can look at this article from the Binance exchange that gives a great beginner’s overview.
What are NFTs?
NFTs, or non-fungible tokens, are digital assets that are unique and cannot be replaced. They are often used to represent items in video games or digital art. Recently, NFTs have exploded in popularity and become a hot topic in the world of cryptocurrency. Cuddle is using NFTs to provide a digital proof of ownership of fractionalized real estate investment properties.
NFTs are digital assets that may be purchased using cryptocurrency but act differently from Bitcoin or Ethereum. Cryptocurrencies like Bitcoin are fungible, meaning all tokens are equal. Each NFT token is unique. Again, it is a digital proof of ownership, or a certificate of authentication that can actually benefit you in different ways.
NFTs have a way using decentralized storage protocols like the interplanetary file system or IPFS, and Filecoin to store media and documents like images, audio, video, 3D graphics, and of course PDF files. In the case of NFT Homes, your NFT will contain a PDF file that is your membership documents for the property you are taking part in.
Our NFTs will be built using the ERC-1155 standard, which allows us to mint multiple NFTs for one property. NFTs on Ethereum or Polygon will be viewable on the Opensea.io marketplace.
What Blockchain Will We Use?
Our blockchain of choice for NFTHomes.forsale is Polygon. Polygon is a second layer for Ethereum to help developers scale their applications without the need to pay excessive network or gas fees. By using Polygon for our NFTs, they are going to be able to be linked with Opensea.io, which is the world’s largest NFT marketplace. We are also able to use Polygon to create our DAO or decentralized autonomous organization, which we will be using to be able to collect and pay rent payments for the properties. Users will need a small amount of MATIC tokens in their wallets to make transactions on the network. Our plan to create some sort of faucet for small amounts of MATIC for users is in the works.
We use audited Open Zepplin smart contracts for our NFT marketplaces to ensure that we are using solid and tested code for our platform. These contracts are able to be used across multiple blockchains, which paired with the WP Smartcontracts front end framework, will make it extremely easy to scale and expand to other EVM based blockchains, like Ethereum, Binance Smart Chain, Avalanche, and others.
What is the USDC Token?
USDC is a dollar backed stablecoin issued by the company, Circle, and is highly regulated. Many say that USDC will be the chosen digital dollar. As the dollar is still the world reserve currency, it makes it easier to price our real estate based on the dollar and use the USDC for transactions across all of the blockchains we operate on. USDC is easily exchanged for fiat or other tokens on most major exchanges.
USDC is a cross-chain stablecoin that has native versions on Polygon which is easily able to be bridged to other blockchains like Ethereum or Binance Smart Chain (BSC).
What are the Benefits of Tokenized Real Estate?
NFT Homes sells real estate property through the internet, allowing real estate to be purchased from nearly anywhere in the world. Properties are fractioned, meaning investors can invest any amount that fits their needs. Additionally, NFT Homes has reduced the time to purchase real estate from a minimum of 30 days and numerous steps with third parties, to just a few minutes and on your phone or computer.
With tokenization, real estate investments can be made affordable to just about anyone. A single token for a NFT Home property may cost between $50 – $250 per NFT, which are the lowest investment minimums the real estate industry is able to offer. Traditional market competitors have $5,000-10,000 investment minimums. The price of each NFT will depend on how many will be minted for that particular property. There can be anywhere from 100-5000 NFTs per property. The difference between an NFT and a regular crypto token is that NFTs are not divisible. So you have to purchase at least 1 NFT to participate. The NFT also contains the documents of the property, or LLC membership, where that kind of media cannot be stored with a regular crypto token like an ERC-20 token.
Real estate is also a notoriously illiquid industry, meaning that it can be extremely hard to sell. By turning real estate into digital tokens, real estate can be accessed by far larger numbers of potential buyers, both due to fractionalization of the tokens and the potential reach of internet-based markets. The larger market participants that digital tokens are able to reach increases the liquidity of real estate. We have a built in NFT marketplace directly on the site that will allow owners to be able to place their NFTs for sale or auction. All of the purchasing is done via smart contracts so there is no agents, brokers, or anyone else to deal with!
How are Properties Chosen for Investment?
Our team of highly experienced real estate investors carefully curate real estate opportunities that can be purchased and used to produce cash flow through rent and any other income. We are currently looking at African markets as well as moving into the United States for our rental properties.
Properties will range from large apartment buildings in popular areas to low-cost single-family homes, all with high rental rates. Each has been renovated, brought up to code, taxes, and utilities paid up to date, and rented to suitable tenants.
The purchase and sale transaction and paperwork between the seller and the LLC are conducted by attorneys upon whom we comfortably rely. Included in the paperwork is the transfer of deed and a filing in the appropriate jurisdiction is made.
Each investment property is wrapped in its own limited liability company or LLC. Physical deeds are not yet able to be tokenized legally, so the parent company, will physically hold each deed for the property with an independent escrow agent. Each NFT is the digital representation of the holder’s partnership in that particular LLC. So in reality, you are a part owner of the company that owns that piece of real estate.
What is the Purchasing Process?
To purchase NFT Homes, you will need to first take a few easy steps.
1. You will need to create an account on our site. Fill out the registration form which will also serve as your KYC information as we intend to stay as compliant with global regulations as possible. We also ask for a copy of your government-issued ID for us to keep on file. We do not sell or share your information to anyone other than for regulatory compliance, which that would take a court order to hand over any information.
2. Set up Metamask or another Wallet Connect capable wallet to interact with the NFT marketplaces. Click here to download Metamask to install on your Chrome or Brave browsers. If you already have a Metamask or WC wallet, then you are good to go!
3. Go shopping for real estate on our marketplace. Locate a property that you want to get involved with as an investor and simply purchase your desired share of the property. The NFT will contain a copy of the LLC documents in PDF format. Purchasing this NFT makes you a member of the LLC that represents the property. You can also purchase property from other owners who are selling their NFTs, this would generally be done after the initial supply sells out. Your digital cryptographic signature that you perform in your wallet when you are purchasing the property, although is different from your written signature, still represents the same thing. When you click ‘Sign’ or what ever button shows to continue on with a transaction, is essentially you putting pen to paper and writing your name.
4. Sit back and collect rent. This is the easy part. Once you have registered and your wallet address is whitelisted, you will begin receiving monthly rent payments in USDC tokens to that wallet address. You can cash out your USDC tokens easily to dollars or other local fiat currencies using various centralized exchanges like Binance and Coinbase. You can also trade for other currencies using a variety of exchanges like Changelly or Simpleswap. Rent payments could also be used in many different DEFI protocols to earn additional yield.
How to Sell Your Property?
NFT Homes has an internal marketplace where owners can sell their NFTs either in a flat rate sale or through an auction using the USDC token. This is a great way to get the property if you missed out on an initial sale and all of the NFTs were sold. One benefit of NFTs over standard tokens is that we have the ability to have a marketplace without having to provide extra trading liquidity on an exchange. It is a simple post-for-sale and purchase-style marketplace, just like selling any other real-world or digital item. NFT Homes automatically collects a 5% marketplace commission on all secondary market sales.
Do NFT Owners Get a Say In Property Decisions?
Yes! Our NFTs are not only an investment token but, using the Unlock Protocol, they will also be acting as an entry ticket for our governance voting system. We will use this to make proposals to property owners on big decisions for the property. This can come in the form of property updates, repairs, remodels, or major tenant decisions like evictions. Only owners of a specific property’s NFTs will be allowed to vote on that property.
What will happen is that when a decision is being made by our team or the property managers who are operating the property, a voting proposal is written and posted. The owners can then come and vote on the proposal to note if they are for or against it. If the vote passes, then the motion moves forward. If the vote fails, the motion will not be executed.
What is the NFT Homes DAO?
The term DAO is short for a decentralized autonomous organization. This is a blockchain-based form of organization or company that is often governed by a native crypto token. Anyone who purchases and holds these tokens gains the ability to vote on important matters directly related to the DAO and in some cases the tokens are used to pay dividends from the DAO treasury. They typically use smart contracts in place of traditional corporate structures to coordinate the efforts and resources of many towards common aims. These are self-executing computer programs that carry out a particular function when certain conditions are met.
The NFT Homes DAO is will be used as an investment treasury to help fund the company as a whole. Those that will hold the governance tokens are primarily a part of the team. Voting is used to control the actions of the treasury and act as a multi-signature account, creating accountability and transparency, which is lacking in many traditional companies today.
Anyone will be able to invest in the DAO via the investment token, which does not give governance voting, but is what feeds funds into the DAO to help pay for company needs as well as investments into new properties. The DAO treasury will be able to be invested in a variety of income-driving DEFI investments like lending protocols or yield farming pools that can help earn additional passive income for the company. These decisions are proposed and voted on by the governing board.
More information on the project and the NFT Homes DAO will be released as developments are made. Please subscribe to our blog and email newsletter to stay up to date.