Tokenizing a Real Estate Empire with RealT

Problem

Investors in RealT were facing difficulties with their distribution payouts in USDC on the Gnosis Chain. They had no easy way to reinvest that income into buying new RealTokens. 

RealT's attempts to get existing payment processing partners to support crypto payments on Gnosis Chain were unsuccessful, and the available alternatives were costly and complex. The challenges included:

• Lack of support for crypto payments on Gnosis Chain by existing partners
• Difficulty in reinvesting distribution payouts
• Inability to set up bill payments in xDAI in addition to USDC, leading to a poor user experience
• High fees charged by other platforms for processing crypto payments

Solution

RealT found a comprehensive solution in Request Finance, which addressed all the above challenges:

• Request Finance enabled the simplicity and speed of accepting payments in xDAI, allowing RealT's customers to reinvest their distribution payouts.
• It also made billing RealT's users in crypto easy, with a pricing plan that was far lower than any alternatives.
• RealT uses Request Finance to accept payments on Gnosis Chain, in USD stablecoins like USDC when investors want to buy new real estate assets or insurance products in RealT. This is the primary way their users receive distribution payouts from their tokenized real estate assets, so it is critical that they are able to easily spend those stablecoins in-app.
• Request Finance now serves as a payment gateway in RealT's checkout process. This required them to write a custom gateway plugin for WooCommerce. At checkout, a Request invoice is generated, along with a polling job to check the Request API for updates. Orders are updated based on poll responses.

Increased customer base, lower transaction costs

Michael Courvoisier, COO at RealT, initiated the integration, and their Lead Web Engineer, Ben Hoverter, ensured its technical feasibility and handled implementation.

The process involved three basic steps: 

(i) setting up the Auth0 credentialing call

(ii) setting up the invoice creation call

(iii) setting up the invoice status poll

The integration provided RealT's customers a little pressure relief when subscribing to new property listings, as they don’t have to be 100% certain that their wallet is properly funded before checkout, since they have some time to finalize their payment. Those factors significantly improve quality of life for everyone.

“Since we started using Request Finance, we have seen an uptick in new customers, a larger average basket at checkout, and lower transaction fees. It makes billing our users in crypto easy, and the 0.1% fee charged by the platform is far lower than any alternatives out there. The responsiveness of the support team has been tremendously helpful, saving us hours of labor along with customer frustration.”‍

Jeremiah Wagstaff, CEO and Co-founder at Subspace Labs

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About RealT

Some of the best startup founders are seasoned industry insiders. Armed with intimate insights into the workings of an industry, they are best positioned to revolutionize the way things are done at the world’s largest and oldest trades. And few can claim to be as old - or as resistant to disruption as selling real estate. That’s exactly what two brothers, Jean Marc Jacobson and Remy Jacobson, are doing with RealT - a blockchain-based real estate tokenization platform. 

It would be an understatement to say that the Jacobsons know a thing or two about real estate. Jean Marc, the eldest of the pair, began his career in real estate in 1993, with Remy joining him seven years later. Nearly three decades on, they have successfully amassed an impressive real estate portfolio. Together, the Jacobson brothers say they currently own and manage an estimated 18,000 units in Montreal, Canada.

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While realtors rarely make the headlines for innovation, the pair have always been eager early adopters of new technologies. As early as 2011, they set up a Bitcoin mining company and launched the world's first Bitcoin Embassy two years later - a space where Canada’s crypto-community and startups came together to form a blockchain hub in Montreal.

But it wasn’t until late 2018, when clarifications from the U.S. Securities and Exchange Commission (SEC) around token regulations enabled the Jacobson brothers to marry their love for both blockchain and real estate. At the time, utility token initial coin offerings were all the rage. But the brothers saw a clear and compelling opportunity to tokenize smaller real estate assets to make them more accessible, and liquid to smaller investors. 

Listing real estate assets on a stock exchange through traditional real estate investment trusts, or REITs, is incredibly complex and costly - limiting the size and type of assets that could be made available to smaller investors. But by tokenizing shares in a limited liability company (LLC) that owns a title deed to a property, smaller yet equally attractive assets can also be collectively owned by token holders.

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The platform allows investors from all over the world to own a slice of real estate, with as little as $50. RealTokens are a digital representation of ownership in the LLC that owns the deed to the property. Each property on RealT has its own set of unique, ERC-20 RealTokens associated with it.

More importantly, RealT eliminates the hassle, delay, fees and paperwork typically involved in renting out or selling a property. This is thanks to DeFi innovations like stablecoins, and decentralized exchanges that facilitates secondary trading of RealTokens. 

Token holders can receive their distribution payouts via cryptocurrencies like USDC from the asset management company, or buy or sell their RealTokens in 2 clicks. Integrations with leading DeFi protocols like Uniswap and Swapcat allow peer-to-peer exchanges around the clock, slashing the time to purchase real estate from a minimum of 30 days, to just 30 minutes with RealT. 

Today, RealT has become a market leader in real estate tokenization. Launched at the end of 2019, RealT has built a loyal and ever-growing community of over 7,500 active investors in 125 different countries, and more than 18,000 registered users. RealT has already tokenized over 200 properties in the United States worth over $45 million, ranging from single-family homes to larger multi-family apartment buildings. 

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Despite all this, the Jacobson brothers aren’t content to merely democratize access to real estate investments. They have been hard at work enhancing the in-app experience for investors. In March 2021, the company partnered with leading crypto wallet provider, Mt Pelerin to develop the RealT mobile wallet, which lets investors using RealT to manage their real estate portfolios easily, and transfer their sale or rental income directly into their bank account. 

In addition to the basic insurance that already covers things like fire and water damage for all of RealT’s properties, a partnership with the decentralized insurance protocol, Opium Network, allows RealT’s users to buy insurance against the loss of rental income from such business interruptions.

Over this year, the RealT team has been expanding the DeFi services available to investors. In early 2022, they launched the Real Market Maker, or RMM, a borrowing platform allowing RealTokens to be posted as collateral. For the first time in history, investors are able to borrow against their real estate collateral in a privacy-preserving, permissionless manner. By the year’s end, RealT will launch its governance token, REG, in order to gradually decentralize control over the protocol.

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Like every other disruptor, RealT has grown to be bigger than just the visionary pair that co-founded the company. The current team of about twenty, have specialized competencies in critical components of the entire value chain. 

On the ground, the team has specialists to oversee the day-to-day asset management activities like assessing and tokenizing properties, managing tenants, and rent payments. Compliance is also a core pillar of the company. Sherri Perlski, CFO & CCO of RealT, formerly leading divisions of investment funds such as Black Rock, Natixis, and ensures RealT remains in line with US (SEC) and French (AMF) regulations.

The company also has a strong team of experts in the DeFi space like their COO, Michael Courvoisier, who also advises various projects, like Jarvis Network and Mt Pelerin, as well as their advisors, Anton Bukov and Sergej Kunz - co-founders of the decentralized exchange aggregator, 1inch.