The first ever Tokenized House Flip is now fully renovated and ready for sale! To get a complete overview of the renovation process, check out our Follow the Flip series starting from Part One. Alternatively, you can head over to the Landshare App and see before-and-after pictures of each room, the renovations carried out, and the visual transformation.
What’s next? It’s time for the token redemption for the holders of our Tokenized House Flip Asset Tokens!
With the completion of the renovations, the Landshare team has obtained an appraisal of the property for a thorough market analysis. To view the appraisal report, click here.
The initial financial estimates for this property were:
We’re thrilled to share that not only did we stick to our budget, with total renovation costs totaling $41,444.87, but the target sale price has surpassed expectations! The appraisal for the property ended up above initial target, reaching $300,000.
In a typical property sale, the average realtor fee comes in at roughly 6%. A 6% realtor fee takes a big chunk out by itself, but coupled with closing costs of ~$1,800 it really changes the net return of a sale. After factoring in those figures, the net sale of a $300,000 property would be $280,200.
In order to avoid these expenses, the property is being sold in a direct sale. As direct transactions avoid the expense and hassle of a traditional closing, the final sale price is often slightly lower than the appraised price, but after factoring in fees and closing still ends up yielding a higher return. The final net sale price for this property is $285,000.
For a comprehensive financial breakdown, including the price per asset token, see the tables below.
Sale price: $285,000
Total investment: $181,444.87
Property tax: $2057.82
Total Return: $101,497.31
Capital gains tax (21%): $21,314.00
Initial price per token: $50
Total tokens: 4770
Gross token value: $59.74
Net redemption price per token: $55.27
To summarize, the token price is determined like this:
Token value = $285,000 (sale price) / 4770 (total tokens) = $59.74
This represents the effective return of the flip on a per token basis. The flip incurs a capital gains tax of $21,314.00 which is distributed across each token evenly. The net redemption value of each token is therefore as follows:
Redemption value= $59.74 - $21,314 / 4770 = $55.27
How does token redemption work?
Token redemption will occur when the property transfer is finalized. Currently, we anticipate this to be between February 27 — March 3rd, or roughly 2 weeks from now, with an exact date to be announced soon. The house flip tokens will automatically be transferred from each holder’s wallet, and all holders will receive their payout in BUSD. Token holders will not need to take any additional action during this redemption process.