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Interview with Vladimir Shmidt, CEO of Alt.Estate
Can you introduce Alt.Estate to us?
Alt.Estate is a blockchain platform to trade tokenized real estate. It allows anyone to become a real estate tycoon and easily build a global portfolio with a small check. It was created by a highly professional team with a background in IT, investment, and marketing, who had $400M worth of real estate deals last year. We benefit from our advisory board with worldwide expertise and transactions in real estate worth more than $3B. Alt.Estate Protocol is at the core of the project, it is ‘ERC-20’ for real estate and has a potential to become an industry standard.
Now you are working on licensing, so when it is completed, can any user tokenize a property?
The current top-priority jurisdictions are UK, EU, US and then Japan. As soon as all the legal work is finished, any user or institutional player would be able to tokenize its property. In the meantime, we have tokenized three apartments, and users can already purchase the fractions.
Will Alt.Estate own the legal title of the tokenized properties?
Our team worked a lot on the legal structure. According to EY research, 85% of investment properties in USA belong to trusts, so this model is widely accepted and allows for multiple beneficiaries of the property. We’ll have a crowdfunding model, where every legal title is owned by SPE – Special Purpose Entity or Segregated Portfolio Company with separate cells for each property. When a property is tokenized, Alt.Estate issues SQM tokens, each of them equals 1 sq.m. of it. Every token represents a fraction of SPE which owns this particular title. It means that the tokens are attached to the property ownership contract, so a user possesses fractions of the SPE. When the blockchain technology is applied widely, SQM token will become a legal proof of ownership by itself and we won’t have to use this trilateral scheme. However, it doesn’t depend on us, but on the blockchain implementation in various jurisdictions.
Can fractions of the listed properties be only bought with ALT tokens? If not will both crypto and fiat be accepted?
In the future all payment types will be accepted, so fractions could be bought both for crypto and fiat.
Will there be a possibility to sell the properties on the open market?
Of course. Users can sell the property entirely or partially on the Alt.Estate platform with secondary liquidity.
Can long-term or short-term rental properties be listed?
Yes, all types of rental properties can be listed on Alt.Estate. We have already launched a working prototype with three apartments in the major real estate markets: US, Japan and EU listed and tokenized.
How will the properties be maintained and dealt with? Who will make decisions on property refurbishment?
Most of the properties will be managed by third parties, usually professional management companies. At first, these companies will be selected by Alt.Estate. Later we expect token holders to have an opportunity to change the company through a voting system. As the community grows, Alt.Estate will offer alternatives and we hope to see some managers on the Platform. The same is for refurbishment, a management company or a person will be responsible.
In the unlikely case that the platform vanishes after a few years in operation, will there be an easy way for the token holders to manage their tokens?
In short, it doesn’t matter for token holders if Alt.Estate exists or not. Within our legal structure, ownership rights are confirmed via a SPE, and in case the platform stops operating, a user still owns these fractions. He can hold them, transfer peer-to-peer or sell on an exchange. Also all the deals and rights are registered on the blockchain, so there are no risks, and fraction owners do not get affected.
Will Alt.Estate have its blockchain protocol? Can you describe it in a nutshell?
Yes, we plan to have it by Q2 2019. Our tokenization Protocol is a combination of smart contracts (20 are developed already), technologies and legal structures used on the Platform and offered as a turnkey solution to developers, brokers, investment companies and other property owners to access new markets and sell their property or raise financing faster and on better terms. Real estate market players could use Alt.Estate’s built in ready-to-use widget without the cost of creating their own infrastructure. It will allow them to save a lot of money and increase sales, while we benefit from their marketing budgets and get 10X leverage.
What are the main ICO dates? What is the soft/hard cap for this project?
Alt.Estate’s ALT pre-sale starts on March 30, 2018 and will last until April 10, 2018. Public token sale will run from May 1 to May 31, 2018. Hard cap is $30m, and the soft cap is $1m.