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August 3 2017

ICO Alert Report: REAL

ICO Alert Report: REAL

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Quick Facts

Pre-Sale Period
The pre-sale will begin on August 24, 2017 and last for 24 hours. It is only available for those looking to contribute more than 100 Ether.

There is a hard cap of 100,000 Ether during the pre-sale period.

Crowdsale Period
August 31, 2017 at 7 p.m. (UTC) through September 14, 2017 at 7 p.m. (UTC).

If the soft cap of 200,000 Ether is reached, the crowdsale will close within 36 hours of the soft cap being reached. There is a hard cap of 400,000 Ether and a total token supply of 100,000,000 REAL across the presale and crowdsale.

The crowdsale incentivizes early contributors through this structure:

  1. First 100,000 Ether raised = 25% token bonus for contributors in this slot

2. 100,000 to 200,000 Ether raised = 20% token bonus for contributors in this slot

3. 200,000 to 250,000 Ether raised = 15% token bonus for contributors in this slot

4. 250,000 to 300,000 Ether raised = 5% bonus for contributors in this slot

Token Distribution Information
REAL tokens (Real Estate Asset Ledger) are ERC-20 tokens and will be distributed through a smart contract. The crowdsale address will be published by the REAL team. They will be distributed within seven days of the end of the crowdsale.

One Ether contributed will return 220 REAL tokens to the contributor. If the soft cap is hit a total of 50 million REAL tokens will have been created, and if the hard cap is hit a total of 100 million REAL tokens will have been created. If the total amount of funds contributed falls somewhere in between the soft cap and hard cap, the amount of tokens created will vary.

As contributors send more funds to the smart contract, more tokens are created, so the amount of tokens is unknown until after the crowdsale is complete. However, it is important to note the REAL team will release tokens from the “reserve” in order to maintain certain levels of exchange liquidity. These REAL tokens will be sold by the team.

Token Allocation
50% of tokens will be available during the crowdsale.

29% of tokens will be in reserve. These tokens will be slowly distributed to contributors to foster growth. Tokens are distributed daily based on the amount of tokens available on exchanges.

20% of tokens will be reserved for the team. The team will have a lockout period that incorporates a 2 year vesting period with a 6 month “cliff” (vesting doesn’t start for 6 months).

Use of Crowdsale Proceeds
All crowdsale proceeds will go towards a five-year defined core operating budget for the REAL team. This total in Ether for a five-year budget is 43,759 Ether (assuming Ether = $250). The following budget is laid out towards the end of whitepaper in more detail:

55% — Team: This portion of the funds will go towards building out the core development team who will implement proprietary functionalities to the REAL platform. Further industry specialists will also be hired.

15% — Business Development: This portion of the funds will go towards generating new sources of revenue, clients and partnerships for the REAL platform.

15% — Marketing: This portion of the funds will go towards online marketing that will aim to generate awareness in the Real Estate sector, as well as boost adoption in the cryptocurrency community.

10% — Reserve: This portion of the funds will be reserved for future unforeseen expenses.

5% — Legal & Compliance: This portion of the funds will be allocated to develop a solid legal framework for REAL offerings; a minor part of that will go to administration/accounting.

The majority of ICO proceeds (80–90%) raised above the core operating budget listed above will go towards the “Crowdfunding Push Fund.” This fund advances acquisition of the initial real estate properties to be purchased by the REAL team. The team believes this will help set an immediate ‘price floor’ on the price of the REAL token, thus making the price more stable for REAL token holders.

The Team

The current team has invested $340,000 into this project thus far. All together, the team have sold various startups for over $200 million.

Enrique Dubois, Co-Founder & CEO

Serial entrepreneur and Business Angel with over 15 years of experience. He has founded and sold for profit multiple online companies. He also co-founded a development company and a blog network. He is an advisor and judge for several estate-run startup programs like Startup Chile and Startup Peru.

Bernardo Hernández, Co-Founder & Director

Bernardo is a serial entrepreneur and venture capitalist. He cofounded Idealista and has held senior marketing and product positions at Google. In May 2013, he joined Yahoo as the Head of Flickr, which he ran until May 2015. In May 2011, he was appointed to the Jury of the Prince of Asturias Awards for Science and Technology. He has a master’s degree in finance from Boston College and holds the Chartered Financial Analyst (CFA) designation.

Javier Llabres, CTO

Javier is an experienced full stack software engineer with experience in Python, Java and other blockchain-related scripting languages. He is currently pursuing a postgraduate degree. Javier specializes in blockchain system architecture and is actively involved in the development of various blockchain technologies.

David Ortega, Ethereum Developer

In 2016, David started testing different capabilities for public and private blockchains. He is a multi-chain developer with a focus on Ethereum. He has experience as an iOS developer for several big projects like FCBarcelona and “Glassy Pro.” His specialties range from blockchain and iOS development to HTML5 and CSS3 work.

Melissa Sapmaz, Communications Director

Melissa has been a senior PR consultant for online startups for the past 10 years, and is also an e-food entrepreneur. She has won several awards, including awards from Startup Chile and the Actualidad Económica prize. She studied communications and public relations at London Metropolitan University.

Miguel Covas, COO

Migual has over 14 years of business development experience in usability, sales, design and programming experience at all startups Enrique Dubois has founded. He holds a degree in business administration.

Social Media

Facebook: https://fb.me/realestateassetledger

Twitter: https://twitter.com/real_token

Youtube: https://www.youtube.com/playlist?list=PLA0ABbsKC9fVRfw8NmdBmER2fKei3P-pY

Slack: http://invites.real.markets/

Telegram: https://t.me/joinchat/EuKMRkMXRcL6Rg5KUNQ4Mg

Github: https://github.com/RealEstateAssetLedger/real_contract

Medium: https://medium.com/@real_token/

The above ICO information can be found on the REAL website and in their whitepaper


What is REAL?(1)

The Real Estate Asset Ledger (REAL) team aims to disrupt the world of real estate by applying blockchain technology to an industry that is historically inefficient and illiquid. REAL uses Ethereum smart-contract governance to provide the best ecosystem for real estate investment. They aim to eliminate intermediaries, improve transparency and liquidity, lower barriers to entry, and alleviate tax issues associated with cross-border transactions. REAL aims to generate rental income and value appreciation through worldwide real estate investment. By bringing together property owners and potential investors, the REAL platform will reduce friction in the real estate investment process.

Any amount of money can be contributed towards a real estate property. Anyone can exchange REAL tokens for economic rights to some piece of property (these economic rights are referred to as REAL Property Participation — RPP). Profits are paid back in Ether, and users can even trade/sell rights to those investments (RPPs) on the platform. Both a website and mobile application will be the home to view and invest in any property made available by the REAL team.

It is important to note that the REAL platform will take a 10% fee of all profits. If a property earns 1,000 Ether in rental income, the REAL platform will take 10% as commission for finding and hosting the property on their website.

How does it make money?(1)

Through the REAL platform, both investors and property owners will be brought together in one “marketplace” of sorts. Property owners are able to “tokenize” their real estate holdings, thus making them more liquid, and users are able to use REAL tokens to gain real ownership over the property. The REAL team will also be selecting, acquiring and managing a variety of real estate properties all over the world. The team aims to employ three value-investment philosophies to their acquisition strategy:

  1. “Buy-to-lease” commercial properties: These are commercial properties that the REAL team will purchase and lease out. The goal is to recoup your original investment through leasing, while the asset appreciates in value over time.
  2. “Buy-to-sell” flip properties: These are commercial or residential properties that, for one reason or another, are being sold at a discount. Generally, the purchase of the property will require some sort of further investment to flip the property, but this is not always the case. Buying low and selling high (and quickly) is the goal when using this strategy.
  3. “Loan-note” investments: These investments are “paper” investments, meaning, the REAL team would be buying the loan on some property with the goal of renegotiating the terms of the loan. Often the previous owner has failed to make payments, or is in foreclosure, so the lessor will accept less than the original loan to ensure newly negotiated payments are made on time and in full.

The team will look to acquire high-quality properties in desirable locations with steady, long-term cash flows. The team states that they have already identified the Spanish market as one with room for considerable growth, and will analyze the North American, Latin American and Asian markets next. Spain, the Caribbean and United States are of particular interest to the team. Some other important details include:

— The team is aiming for 12–20% annual returns depending on the type of asset and market risk. While these returns may be smaller than some of the reported returns through cryptocurrency investment, it’s important to note that these retrurns are generally valuable in the real estate industry. REAL is essentially providing a safe haven from volatility that is more typical of cryptocurrency investment.

— REAL is aiming for a 50% loan-to-value ratio (re: putting up 50% of the total property value in a loan). They also plan to allow for 20% headroom in the ability to service the debt, which will allow for some cushion in case of unforeseen circumstances with each property.

— The team aims to build a partnership with Portblue hotels, a hotel operator that is managed by one of their advisors. This will be the first major partnership for the REAL team.

— The team aims to have a desktop, mobile and lite client of the REAL platform in order to make the use of the platform available to as many people as possible. For further details on smart contract or desktop/mobile specifications, please consult the REAL whitepaper.

Technological Specifications(1)

The REAL token is the primary driver of the REAL platform. As an ERC-20 token, it has full smart contract functionality. In this case, the smart contract will complete the property acquisition for users. Users can exchange their REAL tokens for RPP (REAL Property Participation), which entitles them to a proportional amount of profits from that property. As the property earns rental income or when the property is sold, Ether will be automatically deposited into the RPP holder’s wallet. Further, once the property is no longer owned by the REAL team, the REAL tokens that the user exchanged for RPP for participation in that property will be returned to them.

Evaluating new property

The REAL team will ensure that the process of finding new property is intensive and results in a positive outcome for REAL token holders. Their 11 step checklist found in their whitepaper involves identifying a location and property, renovating and furnishing it post-purchase, and ensuring profitability through low vacancy rates and available maintenance processes when necessary.

Once a property has been purchased, a smart contract executes the following steps in order to list the property on the REAL platform:

  1. A property register ID, acquisition documentation hash (using IPFS), custody information (using IPFS), total amount of participants, and value in REAL from each participant are all included.
  2. The smart contract will mint the necessary RPP for each property, allowing users to exchange REAL tokens for property participation/ownership. The smart contract associated with each property will hold the REAL contributed for each user and return the REAL tokens when the property has been sold.

Process Flow of the platform

The REAL team lists a helpful 12-step process flow in their whitepaper for ease of understanding:

1. The REAL Platform invests in the acquisition of a property and offers participation(s) to platform users. For that, we will create a REAL Property Contract (RPC), a smart contract of physical property.

2. The REAL Platform creates participations that are offered to the users through REAL Property Participations (RPP). These are internal tokens that describe the participation details for each property with their different valuations and participation percentages.

3. Users will get REAL Tokens in the Token sale, or at exchanges. We will facilitate on our site the exchanges link where users can buy REAL Tokens.

4. Once the users have REAL, they will be able to acquire RPP (Real Property Participation(s)) by exchanging REAL Tokens.

5. Property participation(s) of each property generates profits through rentals.

6. These profits will be split according to the participation percentage of each user in that property. (This will be detailed in the RPPs).

7. Rental profits will be paid monthly among the RPP owners in Ether.

8. The REAL Platform sells the property.

9. Profits from the sale of the property are obtained.

10. The profits are split proportionally among users as detailed by the RPPs.

11. Each user’s profits are paid in Ether.

12. Each user gets their REAL Tokens back when the sale transaction is finished.

Finally, it is important to note that the REAL team has spent time analyzing the future price of the REAL token and potential profit or loss. They also include information on what they believe will be a token price “floor effect” (re: token cannot go lower than “x” price) and have analyzed the level of growth of the project. All of these equations created by REAL can be found towards the end of their whitepaper. (1)

View the REAL website: http://www.real.markets/

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Disclaimer: This report is intended to provide a helpful overview of this particular ICO. This is not investment advice and does not constitute any solicitation or endorsement of any investment. Any investment you make is done at your own risk and at your full and absolute discretion. The contents of this report are the property of ICO Alert. All rights reserved.

References:

(1) REAL Whitepaper, Real.markets, (2017) http://www.real.markets/REAL_Whitepaper.pdf

(2) REAL Telegram, Telegram Application, (2017) https://t.me/joinchat/EuKMRkMXRcL6Rg5KUNQ4Mg

Topics: Blockchain, Real Estate, Real Estate Investments, Fundraising, Crowdfunding