Frequently Asked Questions
- Who can invest using OwnProp?
You must be an accredited investor to invest presently. In the future, we will open up investments to non-US persons and bring in non-accredited investors as well.
You are accredited if any of the following are true:
- $200k+ Annual income for the last 2 years. $300k+ Household income for the last 2 years.
- $1M Net-worth excluding your primary residence.
- Series 7, 65 or 82 License Holder currently in good standing
- $5M+ in assets as an LLC not formed for the purpose of investing.
- With all accredited investors by the standards above.
For further information on Accredited Investors visit: https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3
- How are my tokens valued?
OwnProp tokens are backed by their corresponding real-estate asset and track to their appraised value. The price of Bitcoin and Ethereum have no impact on the value of each OwnProp token.
- What is a blockchain?
A blockchain is a distributed ledger that records transactions in an immutable way. Because transaction history is constantly and simultaneously verified by users all over the globe - the risk for fraud is greatly reduced. Almost all cryptocurrencies transact on a blockchain and there are many use cases beyond cryptocurrency, including real estate transactions.
- What is a token?
Tokens are digital assets created on a blockchain. Each blockchain has a native coin, for instance, Bitcoin for the Bitcoin blockchain and ether for the Ethereum blockchain. Assets built on existing blockchains are referred to as tokens. In OwnProp’s use-case, the tokens will represent physical real estate assets and this ownership will be recorded on top of the Ethereum blockchain. All transactions of these tokens will also be recorded in this immutable way.
- Why use a blockchain platform over a centralized solution?
In short: better provenance, security, and accessibility. Ownership is secured on the blockchain, an immutable ledger that records all transactions. It makes our platform accessible to a wider audience and able to integrate with other platforms in DeFi. As titles and government services digitize, OwnProp will be ready to integrate with them. In future: blockchain will provide the ability to collateralize your asset much more smoothly in various DeFi platforms, giving a hard asset to borrow against instead of the current more volatile standard of borrowing with cryptocurrency as collateral.
- Why does real estate need tokenization?
We at OwnProp believe that all real estate benefits from tokenization for the following reasons:
(1) Creates the opportunity for a marketplace to buy, sell, or trade tokens of real estate
(2) Reduces/Eliminates intermediaries
(3) Increases liquidity of traditionally illiquid assets
(4) Increases access to fractional ownership
(5) Decentralization creates trust and security
(6) Allows real estate transactions to truly become peer-to-peer
(7) Allows investors to diversify their risk
- What are the biggest cost savings for the fractional investor?
OwnProp offers flexibility in purchase size and significantly lowers friction. Fractional investors don’t need title insurance, a closing attorney, real estate brokers, inspectors, appraisers, etc.
- Where are my tokens stored?
OwnProp uses best practices for securing private keys and will maintain custody of the tokens on behalf of the user.
- What are the tax implications?
Cryptocurrency is treated as a commodity and a property depending on the circumstance. The LLC that one owns by holding OwnProp tokens is considered a real estate asset, therefore this token is considered a security by US tax law.
- How will I be paid dividends?
Dividends will be paid via ACH initially and eventually will be paid via distributions of USDC to the user’s wallet.
- Can I use crypto to purchase tokens?
We accept USD for all purchases presently via Plaid, payment in cryptocurrency will eventually be implemented.
- What standards/blockchain will the contract and tokens use?
An ERC-20 standard contract on Ethereum. It is upgradable and we will continue to add audited custom features to better serve our users.
- How many tokens will be issued?
Each property has a different number of tokens issued, determined by OwnProp and the property’s Sponsor. Each project will also have a different PPM that will determine the terms of the investment opportunity.
- Is there a minimum for investment?
The minimum purchase is one token. OwnProp’s first listing was $100/token. While we intend to keep future listings in a similar or lower range, this is subject to change depending on each property listing’s unique requirements.
- Are you going to allow the buying/selling of tokens on platforms like sushi or uniswap?
OwnProp will operate its own alternative trading system in the future. Initially, OwnProp will be the custodian of all user tokens.
- How are the properties chosen to be listed on OwnProp?
OwnProp leverages industry experts to vet every sponsor and property in order to only provide the best investment opportunities to its users. We partner with the best sponsors in the industry and have them bring us their best investment opportunities, which we confirm to be up to our standards independently, after which we start the process for listing on OwnProp.
- Who is responsible for maintaining the property?
The real estate asset is controlled by the general partner stated in the property documentation. By buying a token, you become a limited partner in the real estate offering.
- Are the tokens considered securities?
Yes, tokenized real estate is considered a security. We at OwnProp are determined to be fully compliant with all that designation entails.