Transcription
Foreign. [Music] Thanks for joining us again on Kryptonize. I have a returning guest, and uh, we're going to talk about a project of his. And we'll get into that in just a minute. But what we're doing in this kind of new, quasi-series, uh, is exposing the good, the bad, the ugly, the greatness of tokenization in whatever project it might be, whether it's real estate, equity, debt, artwork, what have you. And today, it's going to be real estate. So, with that, uh, Lewis, I don't think you need to introduce yourself, uh, too much. But, you know, you do have a background in tokenizing real estate projects in Australia. So, uh, let's take it from there. What, what project are you, uh, have you tokenized? And, uh, let's just start with a background on that.
Yeah, so we, we are tokenizing real estate here in Australia, um, focusing on, um, luxury investment properties. Um, so we, we've tokenized two properties, um, single-family homes. Um, so one's been in Brisbane. So we're on based in Brisbane, but also we do a lot of commuting into the Gold Coast, which is the sunny, the sunny beaches of the Gold Coast, which is sort of down south from us, 100 kilometers down south from us from Brisbane. So we tokenized our second property there called the Dolphin Property, the Brick Dolphin in terms of its, um, exact name, token name. But, um, so again, we, we tokenized that property, uh, sort of late last year, the Dolphin Property. And, um, and it was a lot of learnings that we, we took from it from, given obviously always learning, um, from the first one, the second one. And, and I think there's some great, um, some learnings in terms of people looking at tokenizing and, and even obviously in terms of people who are looking to invest in tokenized real estate. So, yeah.
All right. And, uh, you've got one in particular that we want to talk about called the Dolphin, right?
Yes.
And could you guys just give us a background of that project and why either you or somebody else decided to tokenize it?
Yeah, look, in terms of, yeah, our business at Brick BC is to take a nice real estate property. So that, that is our business. So our objective is to, to do 20, 20 to 20 each month, at 20 each year, should I say. Um, so these are just the first cats of the ranks. And, uh, the Dolphin Property, again, the very, the very similar features that the type of properties we've tokenized. So the Dolphin Property is, uh, yeah, it's a $2.6 million dollar total cost, um, US dollars. And, you know, I always like to making sure we're talking on the same currency. So when I talk about dollars, it's always US dollars. And so, so that's a total cost of $2.6 million dollars. So we tokenize it. We basically, it's 40,000 tokens that make up that series. And anybody from anywhere in the world can actually buy on our platform tokens in in that property token series. Um, so we're with the, again, why, why do we tokenize? I mean, we've been doing, I've been doing real estate, there's myself, my family for, you know, around 30 years investing in property. So, so again, it was time to take the journey to, um, yeah, obviously with banks continue to be challenging. The old system of buying traditional real estate for the everyday person is challenging. So we thought, why don't we get people on a journey with us and be able to benefit from that, you know, what real estate brings, but now anybody can have access to it that, you know, this has been hard in traditional real estate. So the Dolphin Property, as I said, second property. And, and having the ability to to buy, you know, for as little as $80 into a token, um, it's, that's, um, you know, whether you're from a developing country, developed country, anywhere in the world, you can start the journey in real estate, through this tokenized real estate.
Did you tokenize this property to raise money, or had you already bought the property and that you just wanted to provide, uh, equity for yourself or for the, the investors?
Yes. All properties that we tokenize, so basically we have an arrangement with the, with the seller. Whether, you know, this one, the Dolphin is actually, is a, is a build developer. So we have agreed on the price. So basically, once all tokens are sold, where we sell, settle more property. So we, we basically, 100% of the property is owned by token holders. So obviously we have to share a part in it, as in ourselves. But, so there's no debt involved at all. So it's basically 100% owned by token holders. Um, so there's no worry, you need to worry in terms of interest rates and all that stuff that goes with obviously having debt in the mix. It's all, I'm debt-free.
Okay. Uh, it's interesting. So, so you raise money, you have an agreement with the seller, you issue tokens, and, and I know it, pretty probably haven't, uh, liquidated this property yet, but what are the expected benefits? Why, why would a developer and owner, anyone do it this way as opposed to the traditional way?
Well, in terms of, um, I'm, I'm fortunate that obviously with the, the contacts I've built over the years with the build developers in the construction space. So basically I said, I want that property. They've got a lot of, actually, this particular, um, house works, they've got a series of 15 properties over the next 18 months that they're building and selling. And, and I just, I want that on there. And, um, so for my seven days relationships with people. And to be able to grab those, um, from, from a developer perspective, why aren't they doing themselves? Well, it's, um, I mean, in his scenario, it, um, he's, he'd rather focus on the traditional way because he can sell properties, yeah, regardless. Because here in Southeast Queensland, we've got some good, um, some good, uh, uh, environment and since what's happening in property, um, and especially over the next 10 years with our Olympics here in 2032, Brisbane Olympics. So we've got a lot in terms of migration, Olympics. So we've got a lot of, so we're expecting these properties to get four times its value from last year in terms of our forecasting, and that's been conservative. So as a developer, from his perspective, that the who we're buying this, they can sell the property regardless. Um, and they're just going to keep focus on the traditional model. But I think any sort of, any any developers looking sort of to consider your commercial real estate property, we start talking about this sort of your, your five-story, you know, 30 units and plus. I think in that space, it provides a great, um, a great case scenario to tokenize real estate because, you know, we all know dealing with banks, it's challenging. We start talking about sort of borrowing 30 million, 50 million, 80 million, it starts getting challenging. So I think from a, from that perspective, I think it's a great case study for any developer to consider if they're doing those sort of projects. Um, again, in terms of single-family homes, available like this one here, it's just doing single-family homes and building and selling straight away. It's probably hard, hard a card case for him too. Is why would he do it when this model's working? But definitely in terms of the developers doing the sort of the bigger end stuff, it definitely, uh, there's a case for it.
Yeah. Oh, I, I can see the case is pretty clear for me, especially, uh, with the liquidity you're giving your LPS, the transparency, all of the things that can be done mostly on-chain, which frees up a lot of paperwork. So, uh, there's quite a few things. What, what I think is missing, and we as an industry have to figure this out, is how to give, because they have to spend money to set this up, how to get them more money at the end of the day, this is the developer or the owner, than they would if they went a traditional process. Yes, it helps LPs, it helps everybody. I guess it helps the developer, the owner, because of the transparency and the way that they could, uh, just send information out via the blockchain, via wallets that people have. That's cool. And there's a lot less check writing. But, um, you know, there's got to be a way that they can make more, more money as a result of tokenizing. Then this thing is going to catch on like, like wildfire.
Okay. So, um, I, I do want to thank you for sharing this use case. Is there anything else if somebody's watching this, they should know when deciding to tokenize or not? Is there a fine line? Hey, tokenize this, don't tokenize that? I know you talk about single-family residences, but, uh, yeah, you're talking to directly to do owners and developers. What do you tell them?
Well, in terms of like, if you look at just knowing, um, oneself property, it is, it's because the costs involved in obviously the research, it guys, and the consultants and so forth, it's not viable to just do it oneself. I think if you're going to do it, you've got to do it as part of your whole business model as a developer. It has to be part of your, or your business model that you do year after year, using this as, um, definitely as one of the means how you actually funding your projects. Because actually, I had somebody that I asked me, how can I, I got this property and I tokenized, um, yeah, I want to get equity out of it. Tokenized 25% of it. Sit down. It's not, this is not a one-stop situation. This is, we've got to be a business that's going to be continued. Because obviously the cost involved. But look, in terms of at the value that's looking at, looking at tokenizing, uh, again, it's not easy because at the end of the day, it's, um, you know, you, one, you've got to sort of choose one in terms of what blockchain is going to tokenize, in terms of getting your consultants around you, because that's important, especially at the initial phase. As you know, we use these issues in terms of who created our platform to tokenize our properties. So again, talking, having those little discussions with people like that. But in terms of, um, you have to build community. You've got to be involved to also educate. Because as, as you know, Mark, in terms of just because somebody trades crypto doesn't mean it's a, they're going to transition to tokenized real estate. So it requires a lot of learnings. We've obviously been doing that well for two years in terms of educating, providing what is tokenized real estate. And our first point of call was trying to educate, um, people who actually invest in crypto because they understand blockchain, they understand the fundamentals of it. Which comes with its other in terms of how well, how do you convince somebody who's making, you know, 10, 10x and 20x, 100x on cryptos to come put some money there on tokenized real estate? So that's the challenging. But the conversation is an easy conversation. We try and educate somebody who already knows about blockchain. So again, it's that, you've got to put in the time to educate and provide, you know, content and, and getting getting onto people that are providing some great content and sharing their content like you are, Mark, like SDN Markets are doing. So people like that that we all have to collectively continue to educate. That's fine. So it's, um, it's not easy because, or else everybody else will be doing it. It's about, but if you're a developer that's looking to use that's part of your business model, as a proper developer, there's certainly rewards in terms of you, you know, yeah, make this part of your long journey since what you're doing.
Yeah, yeah. I mean, that's a great point. I mean, you should either tokenize their entire business or tokenize, uh, a portfolio. Because then I could see, you know, if you got a portfolio of properties in an LLC here in the states, and you tokenize that, then it's, I think you can leave some tokens left over for yourself in order to profit even more.
Yeah, absolutely.
This isn't legal advice.
No, it's not legal advice. But, um, what I've seen, uh, some of these developers are moving more towards that model so they can keep some tokens for themselves and not just what percent they own of the property because it's a portfolio or because it's their business now. It's more of an equity situation. So interesting.
Yeah. We'll have to see how it all, uh, develops. But with that, uh, Lewis, I, I wanna thank you for being on the show again. Thank you for talking about your project, the Dolphin. And, um, look forward to, uh, staying in touch with you.
It was a pleasure, Mark. Always a pleasure. You take care.
Hello, Kryptonize fans. I've got a special token that I'm recommending for you. You've been following this show. We don't play any games. It'll tell you what tokens we like, what we don't. We have guests that come on and try to convince us. And, you know, the drill. But this one's a sure winner. And that is TetraGuard. [Music] [Music]