The goal is to raise funds to acquire a 20-100 acre plot of raw land within 200 miles of New York City. The land will be used for a range of purposes, determined by the investors. This initial purchase will serve as a model to be replicated.
We believe land value will appreciate in coming years for a combination of reasons:
- Inflation will make real & finite assets more valuable, especially usable assets.
- Land is more usable than any real asset and contains component assets (trees/lumber).
- The trend towards remote work is increasing the appeal of real estate outside of major metropolitan areas.
- Legalization of cannabis will create a wave of opportunity for new businesses. For example, each household will be able to grow for personal usage and a coop can be created for that. We believe upstate New York and surrounding areas may become a hub for cannabis on the East Coast.
Modernizing Real Estate
As NFTs expand outside of digital assets, real estate will likely be the first real assets where NFTs gain broader adoption.
Land ownership and acquisition can be complex and we see the opportunity to create a cooperative to concentrate the legal, regulatory and administrative burden. In the past, this was achieved through investing in real estate investment trust (REIT). We believe there’s an opportunity to modernize REITs through blockchain technology, particularly in its ability to fractionalize ownership, enable liquidity, and even vote.
We see a growing interest in using crypto tokens, specifically NFTs, to represent real estate ownership – which will increase the appeal from many type of investors. For some NFT collectors, this is a unique collector item that’s backed by an actual physical asset, an evolution from the digital assets that they are currently used for. For more traditional investors, this will be a diversifying asset from stocks and bonds. For venture investors, this is the ground floor for a potentially disruptive business model.
If this initial offering is successful, it serves as a template for modernizing REITs using crypto. Developments have already been made with fungible tokens. But since each fraction of the land is unique, we propose using a non-fungible token (NFT) instead of a fungible one, which doesn’t differentiate between each token. It also allows the investor to have power over how a specific plot will be used.
Modernizing Real Estate
If this initial offering is successful, it serves as a template for modernizing REITs using crypto.
How it Works
Investors in this initial project buy NFTs that represent indirect fractional land ownership. Each NFT is expected to be offered at a similar price to market value of land ($5,000-$10,000 per acre). Each token holder will be granted rights of usage and voting through a newly formed company that will own the property. The newly formed company will grant rights to the NFT holders.
The offering is expected to be completed by year-end 2021 with the raised amount to be used to acquire the land in the first half of 2022. If the land isn’t acquired, the investment (less startup/R&D expense) is refunded, minimizing risk to investors. Putting aside the potential commercial usage, investors are buying land at market value. Early investors will be granted the highest economic upside. We expect to abide by all local security laws.