The main goal of this startup is to allow small investors to invest in Real Estate with little money via a fractionalized NFT. I thought of NFTs because they allow ownership of a fraction of a valuable asset, in this case real estate, to be bought, sold, and traded as a unique digital asset. This could allow for a more efficient and accessible market for real estate investments, potentially opening up new investment opportunities and increasing liquidity in the real estate market. Also, the use of blockchain technology in NFTs can increase transparency and security in real estate transactions. Moreover, I was thinking that as you invest via NFTs, the process is done instantly and doesn’t need any paperwork as traditional real estate does.
I think the liquidity part is very important because for example if the economy crashes or there is a big recession and the real estate market crashes, you can’t get out. On the other hand, when you buy a stock and it crashes, you can get the money out that same day.
You may be asking how investors could make money buying lets say 1% of a property, well, they could get 1% of the monthly rent payed by some other guy who is using the property.
Finally, the property owner has also advantages of selling a portion of their house:
\–Access to new investment capital: By selling a fraction of their property, the owner can access new investment capital without having to sell the entire property.
\–Diversification of investment portfolio: Selling a fraction of the property allows the owner to diversify their investment portfolio and potentially mitigate risk.
Personally, I don’t know any big competitors in this niche, so I might have a big share of the market initially which is good.
Please share your feedback! Thanks in advance.
4 thoughts on “I am thinking of building a startup which is basically a fractionalized NFT marketplace for Real Estate(starting with multifamily properties). Any feedback or suggestions on the idea?”
How would you handle repairs/improvements to properties? This is a common issue for condominiums (see the FL condo building that suddenly collapsed a couple years ago).
Look up loftly on algo
This has been tried many many times. Not saying you shouldn’t do it, but you should know about all the other attempts.
How would the payout structure be ?
Like example my house that I own title in hand. Its a 2 family house and rents easily for 550 per unit .the full operations cost including a lil monthly maintenance or fix something is 550 per month and that leaves literally 550 per month profit from this property. My house and neighbors cost about 95-110k to buy an its rental move in ready.
So lets pretend that we fractionally split this into example;
300 NFTs and each NFT including paying taxes, gas fees, bullshit fees and everything cost 500 dollars Per NFT for a total of 150k cash that will buy this property and there will be some cash leftover for your profits.
So now that 300 people purchased a single NFT that cost 500 dollars each then how is the money split example; at the end of the month when both tenant pay rent 550 pays overall entire operation cost and now the other tenants 550 is PURE profit….. so monthly from the 300 people WHO would get the 550? Or how would this work to make sure everyone is atleast slowly receiving something in return ? Example;
At the end of the month do you take the 550 ÷ 300 investors = 1.83 cents per month profit PER person and this would take roughly 23 years for everyone to get their 500 dollars back and then the property could be sold for like 200k cash ÷ 300 investors = 666 dollars profit after 23 years waiting.
What other ideas do you have ? How would potential investors make money from Crowdfunding this into reality.