For Ben's and Alex's 1st AMA on Discord, they covered several topics, such as real estate investing, Beta release, blockchain tech and more!
AMA - 29.12.2021
On the website it mentions crypto and I was just wondering does this mean the properties we’re buying are crypto-related?
Yes, the ownership of the property is turned into an NFT that we fractionalise into smaller pieces. These pieces are fungible tokens that can be traded for one another. In addition, these tokens have rental rewards.
When is the beta iOS app expected to be available?
It’ll be available in the next coming days.
Will it work on iPad? MacBook?
No, not yet. It doesn’t take a lot of time to enable it, but it won’t work initially.
When will the android beta happen?
Don’t know yet. If the iOS app works fine and there’s a real demand for a Proptee, then we’ll quickly launch the Android version too.
How does one get the beta tester role?
Being active in the community and inviting your friends is the best way to become a beta tester.
Is there any way we can increase our chances of being chosen to test the beta?
Invite your friends and be active.
I could've sworn beforehand you guys wanted to be FCA Approved before launching? Is this still the case and if so why not?
Yes, you’re absolutely right. Initially, we wanted to launch an MTF (multilateral trading facility) in the UK, but as we dived into the legal challenges alongside Brexit and Covid, it became obvious that a highly regulated MTF is very expensive and would kill most of the yields for investors. Moreover, it would take us at least 3-5 years just to launch the MVP.
During this time, cryptos started to become mainstream. As we’re early crypto adopters and believe in blockchain technology, we’ve made the decision to rebuild our backend to it. This opened up a lot of opportunities and our product became fundamentally better.
For instance, now anyone who passes our KYC can invest, they don’t have to live in the UK (we would love to give the opportunity to disadvantaged people around the world to be able to access and benefit from a great and safe real estate market across Europe and the world), plus we can list properties from anywhere in the world.
Is our money protected in any way? What happens if Proptee goes out of business?
We're registering for authorisation in the EU (Lithuania) and not in the UK for now. So, we're supervised by the Financial Crime Investigation Service in an EU member state. We don't have FSCS money-back guarantee, but we keep all the funds in separate accounts in euro and USD stablecoins, so they cannot be taken or lost by anyone.
Yes. We keep all the properties in a separate company, so if something happens, e.g. Proptee goes out of business, then a 3rd party will come in, sell the properties and you will get your money back. Regarding the money, we create a wallet for every user, so if we go out of business, you will still have the money in your wallet.
Will you ever do crowdfunding?
We really want to do some sort of crowd offering. If it’s going to be crowdfunding or a token sale, we don’t know yet. We’ll definitely give you access to Proptee as we believe that everybody here deserves a chance to participate in our success.
Is it just a REIT?
No, these are individual properties that you can invest in. We wrote a Nothing Fancy post about this recently. Check it out here.
Do you not think for UK investors particularly that utilising Lithuania may alienate customers who look for the FCA as that ‘trust’ element when considering where to put their money?
Yes, we were concerned about this, but ultimately we’ve seen other trusted companies being registered in Lithuania (e.g. Revolut) and this is the only way a great product can be built in the current legal framework.
How does Proptee make money? Do you guys have a pitch deck we could take a look at?
We have an old pitch deck that we have sent to a couple of people already. If you want to have it, feel free to reach out to Ben or just email him at [email protected].
- Listing fee for property sellers to sell their estates on Proptee.
- On the B2C side: We charge commission on trades after the first €1,000 and plan to launch a premium account in the future, where users can get commission-free trading, access to properties earlier and other things. We might charge a Proptee listing fee during an IPO.
- Regarding B2B, we plan to release our API so that other companies can offer real estate investing to their clients using our properties.
I’m particularly interested in how the NFT will work. The fees involved, what happens if all the tokens are not sold for a property, how the resale of the token works. Questions around liquidity.
I think we’ve already answered the first part of this question. What happens if tokens are not sold for a property? This is really simple, once you buy a token and we cannot sell the rest, then we de-list the properties and give you your money back.
Liquidity is a really important question. Liquidity can be low at the beginning (not as low as traditional real estate investing) but will increase as more people use the app. We are keeping our eyes on interesting trading solutions which can provide higher liquidity. One of those is AMMs in decentralized exchanges.
Why did you go with crypto-type "investments" and not with, for example, physical shareholders of real estate?
There are rules around shared property ownership that restricts us from offering physical shareholding of real estate to investors. It’s not possible to update the land registry every second there’s a trade. Other companies tend to do it with SPV companies. They buy 1 property with 1 ltd company and the issue shares or beneficial shareholding agreement on top of those shares. We wanted to have it decentralized and allow global settlement without us being in the middle, so we put every property in a separate company and issue tokens on blockchains.
If I ask the 1st question can I be a beta tester of Proptee?
Yes, sure! :D
Who are your competitors?
It’s hard to say as there are a few different categories. There are property crowdfunding, REITs and property funds. From these categories, we sit in between property crowdfunding and REITs. However, if we have to pick, I’d say our biggest competitor is Property Partner. We spent significant time analysing their product and strategy.
So pleased with your progress. Could you talk a little about investing in digital land via Proptee in the future?
Thank you ❤️
We’d love to bring all of you the opportunity to invest in digital land and different kinds of metaverses. However, the value of virtual lands fundamentally comes down to the quality of the game. If it’s fun to play, people will play it and therefore land will be worth a lot. If the game sucks, nobody will play it eventually and lands will be worth nothing. We’re considering launching a digital REIT in different metaverses, to diversify and hedge against a few going out of business.
Have you got a minimum order value? And what kind of fees are you proposing right now? So are you buying the underlying property and sharing the revenue with the holders?
No minimum order value. The minimum order is 1 token. Typically, 1 token is worth around €1, so that is the minimum order value.
Yes, we’re buying the underlying property.
What rights would holding the NFT bring and what would stop Proptee from just selling the property for some reason. In basic terms who controls the assets and what insurances are in place to protect the assets from damages that sort of thing.
Ownership of the NFTs means rental reward rights as well as owning a piece of digital asset that has value.
For major decisions, we’ll ask the holders to vote, but the assets are mainly controlled by us and our real estate team. We have building insurance on all the assets listed on Proptee. Moreover, we put 10% of the monthly rent into a so-called Energy Fund, so if anything happens to the property, that safety fund will cover the repairs.
Will there be a minimum withdrawal amount? For example, if you wanted to withdraw property income
There’s only a minimum withdrawal amount for crypto transactions. No minimum for fiat.
How many years have you been working on Proptee? Will you have a YouTube channel? I found out about Proptee via a Freetrade/Trading 212 YouTube channel
Around 1 year. We had to reinvent ourselves a couple of times already.
We would love to launch a YT channel once we have a bigger team. Right now, we’re 100% focused on the product.
See you at the next AMA in 2022