Landshare Feature Preview: Tokenized House Flipping

Landshare
4 min readAug 22, 2022

One of our most long-awaited features is just around the corner — Tokenized House Flipping! For decades, savvy real estate investors have earned significant profits from buying, renovating, and reselling properties. Traditionally, the house flipping process required large sums of money, technical skills, and months of hard work.

With our upcoming Tokenized House Flipping feature, we are bringing this highly lucrative investment type to the blockchain for the first time ever! Don’t stress yourself out finding the right contractor, budgeting for repairs, or getting the property sold — simply invest as little as $50 and let the Landshare team handle the rest. Redeem your House Flipping tokens for a lump sum when the process is complete, giving you all the benefits of flipping properties with none of the hassle.

What is House Flipping?

Before diving into our newest feature, it is important to understand what house flipping is. At its core, house flipping is when a real estate investor purchases an undervalued house in need of repairs, performs renovations, and sells it for a profit. The period between the purchase and the sale is generally between a few months and a year, depending on the amount of construction required. In most cases, we expect the process to take 3–6 months from start to finish, but this number can vary greatly.

House Flipping works because properties that need repairs are often undervalued. Most homeowners are not interested in a project and want something that they can move into right away. Many passive investors want properties that are rental ready. This creates an opportunity for hands-on investors who are willing to take on homes that need a bit of a face lift.

For more details on the process behind house flipping, check out our Rules of House Flipping Medium article.

Why House Flipping?

At Landshare, our goal is to offer real estate investment options that appeal to every type of investor. While our rental properties are excellent as a long-term hold, many investors are looking to realize their ROI in a shorter time frame. This is where house flipping fits into our ecosystem.

Rather than holding Asset Tokens and collecting rent each month, our House Flipping tokens will be redeemable for your share of the profits upon completion of the flip. This means your returns will be fully realized in a matter of months, all at once. With a lump-sum ROI of 8%–20%, our house flipping feature offers an excellent short-term investment opportunity.

To put this into perspective, let’s take a look at an example House Flip:

  • Duration: 4 months
  • ROI: 15%
  • APR-equivalent yield: 45%

In this example flip, the returns are equivalent to a stable 45% APR investment held over 4 months. For investors looking for safe short-term investment options, our House Flipping feature will be hard to beat!

How does Tokenized House Flipping work?

If you are familiar with our Tokenized Asset offerings in the past, the Tokenized House Flipping feature will be familiar to you. Fundamentally, both of these features involve the tokenization and fractionalization of real estate assets. If you’d like to learn more about this process, check out our Tokenized Asset blog post.

For a quick summary of how the Tokenized House Flip will look, here is a step-by-step breakdown:

  1. Landshare creates a new legal entity responsible for the ownership, renovation, and sale of the property. The ownership units of this entity are converted to tokens.
  2. A limited number of tokens are sold to investors to help cover the renovation costs of the property.
  3. After the renovation is complete, the Landshare team puts the property up for sale on the open market.
  4. When the property is sold, token holders can redeem their House Flipping Tokens for their share of the sale proceeds through the Token’s redemption feature.

What is the difference between Tokenized House Flipping and Tokenized Assets?

Both of these investment opportunities fundamentally rely on the tokenization of real estate assets. However, there are several key differences.

Holding our standard Asset Token grants an ownership stake in the underlying asset and passive rental income based on the number of tokens held. In other words, it is mostly designed as a long-term investment that generates steady returns over time. Asset Tokens can also be traded between users, staked in NFTs, and will be useable in our upcoming loan feature. Overall, Asset Tokens are the best choice if you are looking to generate a passive income stream over time.

House Flipping, on the other hand, is designed as a short-term investment opportunity. Rather than holding tokens and collecting rent each month, House Flipping tokens will be redeemable for your share of the profits upon completion of the flip. In general, our House Flipping tokens will offer better returns in the short term, with APR-equivalent yields of 45% or more. Since House Flipping tokens are one-time redeemable, they will not be tradeable, stakeable, or have NFTs.

Conclusion

Tokenized House Flipping is a major addition to the Landshare ecosystem, providing a lucrative short-term investment option to go along with our other offerings. House flipping has massive potential, and by being the first platform to bring it to the blockchain, we are opening it up to everyone for as little as $50.

We look forward to releasing our first house flip very soon. Be sure to follow us on Twitter and join our Telegram group for the latest news and announcements on when this new feature will go live! You can also view our current Tokenized Asset offerings at https://app.landshare.io/property-details.

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