Lofty-Tokenized Fractional Real Estate

Lofty.AI is an innovative fractional real estate platform that allows you to invest in properties in the USA. The platform uses blockchain technology to create tokenized investment opportunities in Real Estate. Tokenization is a solution that divides the ownership of an asset (such as a building) into digital tokens. These tokens act as “shares”, and are similar to non-fungible tokens (NFTs)

Table of Contents

Introduction

Lofty is a marketplace where you can co-invest in tokenized real estate for only $50 and sell it anytime. The property can be bought through cash or algorand crypto. The interest is accrued on daily basis. The platform uses blockchain technology but has no impact due to crypto volatility as all returns are computed in US dollars and crypto is used for ease of buying and selling.

Lofty.AI Business Model

Lofty.AI is not an investment fund but a marketplace like Airbnb, eBay, or Amazon.

The Lofty marketplace consists of buyers (token holders) and sellers (people who want to sell their properties). Currently, there are less than 5 sellers who are permitted to list properties on the Lofty marketplace. These sellers have years of experience rehabbing and selling turnkey properties with a great track record.

The various steps followed by the platform are as below

Step 1: A seller submits their property for listing on the Lofty marketplace. The property is either approved or denied based on factors like occupancy status, condition, location, rental history, etc.

Step 2: If the property is approved, an LLC is formed to take ownership of the property. The LLC is then tokenized into individual $50 tokens on the Algorand blockchain.

Step 3: An property inspection expert company will then evaluate the property and provide a report. If any repairs are needed, the seller will make the repairs before closing or provide a credit to the LLC.

Step 4: The property is finally listed on the Lofty marketplace. Once the property is fully funded, the LLC will close on the property with the Title Company and the deed will be transferred to the new LLC.

Properties on Lofty.AI

Lofty has multiple properties listed from the area around Chicago and they expanding into other geographies as well. The rental yields are between 8 and 10%. Factoring in the capital appreciation people can expect 15%+ IRR on their investment. Complete details of each property are available on the platform. The rent is accrued on a daily basis and added to the wallet.

Lofty.AI Governance System

Token holders vote on all decisions of the properties they’re owners of. These decisions may include when to increase rents when to sell the property, whether to evict a tenant or offer them cash for keys and more. All co-owners must fill out a survey after their first investment specifying the decisions they’d like to make in certain situations.

The winning decision is decided by a 60% Supermajority vote and the winning vote is sent to the property manager who carries out the decision

Lofty.AI Team and Funding

Lofty has a large team with strong experience in finance, real estate, and technology.

The team is backed by some top-notch investors

Is Lofty Safe?

Lofty.AI has made fractional real estate very simple and easy for regular investors. The platform uses blockchain technology for that however it is not a crypto platform and hence does not face any crypto volatility risk.

The major risk of the investment is similar to that of investing in real estate. Due to the lower minimum requirement of USD 50, it is easier to diversify and reduce risk.

How to invest in Lofty.AI

Get 25$ Bonus

Investing on Lofty is fairly simple. Below is the list of steps one needs to follow to get started.

Step 1: Use the above link to register and complete the KYC process( get USD 25 bonus if you invest USD 300)

Step 2: Activate the Algorand Wallet provided by the platform (Remember to save the key phrase which will help you if in the future you forget the password)

Step 3: Transfer algorand to Lofty Wallet from any exchange (Binance etc ) for very small fees.

Step 4: Choose any property and invest using the algorand in your wallet

Lofty.AI Alternatives

There are not many alternatives for Lofty in the tokenized real estate space. Realt offers tokenized properties in the USA but the listing is fewer as compared to Lofty.

In the conventional Fractional real Estate, you can invest in Platforms like Reinvest24 globally and MYRE Capital in India

Conclusion

Lofty.AI is an innovative platform and has a lot of potential. You do not require opening a foreign bank account for Lofty which makes it quite easy for investors who are not looking for large investments. I have invested a small amount across a few properties and will be monitoring the performance. Will update my investing experience in my monthly post.