ICO Review of REAL LAND (RLD tokens on Ethereum)
Real Land (RLD) is an IPO of global properties RLD token that incorporates blockchain technology and is governed by Ethereum smart contracts to keep a transparent record the investment portfolio and purchases into it. While not disruptive to the current real estate market, it will offer crypto investors a way to incorporate a less volatile coin into their portfolios. More so, investors will be able to purchase fractionalized non-ownership economic rights from a varied property portfolio for even a dollar if they want.
The business model for the RLD token is easy to understand, the point of the IPO is to provide them fiat liquidity to invest into residential and commercial property. Their focus will be on “Buy-to-let commercial property investments, discounted buy-to-sell “flip” opportunities and loan-note investments” and “high-quality hospitality assets. “ For its services, RLD will charge a flat %10 commission on all profit from rental income and sale of the property.
During the IPO, they plan to release 70 million RLD tokens priced at 1 RLD per 0.1 ETH. The IPO will run for 60 days or until they hit their soft cap of 100,000 ETH or the hard cap at 300,000 ETH. In dollars this is 40 and 80 million and would represent .0021% and .0042% of the total ETH circulating supply. 80% of all tokens will be distributed during the RLD Initial Token Sale and any tokens not sold during the IPO will be burned. The founder team, Advisors and Strategic partners will receive 5% of all contributed tokens over a 12 month vesting period, with a 6 month cliff.
The funds from the IPO will be split 80/20 towards the initial purchase of real estate assets and operations, respectively. The company Real Land or one of its subsidiaries will purchase 10-20 properties starting in March, with the IPO platform to be released in March 2018. The company will use 80% of the token sale capital to invest in Real Estate Units, 10% in IPO platform operations and 5% for sales & marketing expenses for the first 12 months.
Company Info & Investment Strategy
The team has extensive experience investing into the Real Estate market and so it can be expected they will begin their project there. They also have a partnership set up with Nordic Group & Heights Holding to provide investment capital for their new “Projects.” After conducting analysis, a third party appraisal and determining investment viability, the team will purchase and then list the project on the IPO platform. Investors then will be able to purchase fractional shares with their RLD tokens for Property Participation. These tokens will be tradable within the platform, allowing an investor to sell their shares if needed. Each month, earnings from project seals will be distributed among token holders, paid in Ethereum. If the property is sold, the RLD team will deposit profits from the sale and documentation of the sale, then all existing RLD tokens will be automatically exchanged for Real Estate Units and profits from the sale will be distributed according to the total share of RLD each user held.
Concerning property prices, “We’ve chosen USD currency denomination because we think it is the most global currency. All property prices will be valued in RLD with market conversion from original purchase price and currency, whatever that is. Finally we’ve chosen to pay in ETH and not in RLD to increase trust in our business as ETH is much more consolidated than RLD. It will also help the Token since people won’t be selling their profits obtained in RLD.”
Strengths
The greatest benefit of RLD it’s backed by Real estate units 80% of the ICO funds will be invested in Real estate so at list 80% of money is saved. And most promising that RLD is given every holder a base value guarantee it means at any point of time if the value of RLD goes under offer price RLD holder can exchange it to any Real Estate unit Real Land team invest money.
Conclusion
Long term I think there is an opportunity for sizable growth for fractionalized real estate funds, it provides lower barrier to entry and reduces fees for investors. The question though is if now the time is and if the Ethereum platform is the proper method for distribution. We will see if there will be significant VC and investor interest in the lead up to the IPO. However, they probably will meet their soft cap requirements with institutional involvement, how much non-institutional investor proceeds
This is the only real estate IPO I will be watching closely and I hope they can achieve their plans. I have no affiliation with REAL LAND or am I an investor.
For more info check out Real Land website : https://realland.io