In the last few weeks, I learned about a new way to invest in real estate…
Tokenization.
OwnProp is a new company that’s developed a way for accredited real estate investors who may not have enough cash to invest in a big commercial deal to benefit from the typical high IRR those properties yield.
They do this by creating a Special Purpose Vehicle (SPV) that purchases a minority share of a property, such as a hotel or apartment complex.
That SPV is then “tokenized” and investors can purchase the tokens, which are like shares.
A token owner is very similar to a limited partner, in that you can’t lose more than you invest.
As the property generates cash from rents, you get your share through the app. In the future, you’ll be able to trade those tokens, so you’ll also have liquidity.
The token transactions are recorded on the blockchain, but unlike a typical volatile cryptocurrency, their value is pegged to the value of the property they represent.
This solves the issue of most coins that are only really backed by thin air. In this case, it’s backed by actual ownership in a commercial building.
Interested?
I encourage you to download their app and check it out. Right now they’re taking no fees whatsoever and the app is free. Investors can see a PPM and financials before they buy their tokens, so everything is disclosed and there are no surprises. You’ll have to upload some documents to verify that you can invest (SEC law), but I’m told they’re verifying people’s eligibility within a few hours.
They were behind the first Austin Texas property to ever be tokenized, and they sold out to dozens of investors in a few weeks.
Now they have two more properties listed and one of them is a pretty famous historic hotel next to the University of Texas campus. They have a webinar coming up this Thursday and it’s a great chance to learn about tokenization of real estate.
People always tell me they want to know what the future looks like. This is a great way to find out. Signup for the webinar on Zoom using the link above.
Tom Zeeb
Traction Real Estate Mentors
