For Retail Investors
By tokenizing large-sized high-quality dividend-generating commercial real estate debt or equity projects, Robinland provides retail investors a financial product that is both an inflation hedge and a stable source of fixed passive income, one that fills the gap in their existing portfolios.
This differentiates Robinland from 90% of fractional real estate investment products out there, which mainly focus on equity and suffer from price risk and rental payments fluctuations.
Debt is intrinsically a fixed income product governed by a legal contract, meaning that the borrower is obligated to pay certain yield, e.g. 8-10% according to a schedule, or else the underlying collateral, land, will belong to the investors, i.e. you.
By also sourcing the most secure type of debt - first lien senior loans with full recourse, Robinland essentially eliminates most risk on the table, and provides you with a hassle-free hedge against inflation & diversification for your existing portfolio.
These are investment opportunities previously gated by large institutions, inaccessible to the masses. 90% of our competitors focus mainly on single families, which retail investors can already access themselves.
The reason why commercial real estate is a better investment vehicle is its stability - take regulation as an example, politicians love changing regulations surrounding single families to make a buzz. They rarely bother to touch commercial real estate, for example, regulations surrounding REITS haven't changed in the past 20 years.
Commercial real estate prices are also more stable than those of residential, which suffer from irrational purchasing behaviors brought out by retail investors.
With smart contracts and a decentralized ledger on blockchain, investors will get paid the right amount automatically whenever Robinland gets paid by real estate borrowers (details in the next section)
A smart contract is a piece of computer program that specifies what events shall happen under what circumstances, and is immutable, and fully transparent. Having your ownership in the underlying debt asset as token also means that it is stored in your wallet, rather than a database controlled by a centralized entity.
The use of smart contract and a decentralized ledger further strengthens the real-world contract Robinland already entered into with the borrowers, empowering the fixed passive income paid to you.
We have a strong legal team internally and are represented by top law firms in the US such as Cooley. We go to extremes to ensure that we legally comply with all security laws, which are different from 90% of our competitors in the area.
STO - security token offering is the only legal process to bring interest-bearing real world assets on-chain in the US, and exactly what Robinland adopts in the process. As long as we are providing an instrument with return, we are issuing a "security", and need to comply with local regulations regarding security offerings. And given that we are offering on-chain tokens, that will mean we fall under the "security token" offering umbrella.
Under the STO, we simply issue a Reg D private placement fund to collect funds from retail investors and then invest that into the real estate debt project. Next, we issue tokens that represent the investors' ownership in the SPV (special purpose vehicle) which holds the loan. This is a battlefield tested procedure, and both our COO and General Counsel have firsthand experience operating Reg Ds.
Under a Reg D, after the first-year lock-up period, investors can sell the tokens to non-accredited investors, but in total there cannot be more than 2000 investors or 500 non-accredited investors for each Reg D offering.
With the use of blockchain technology and smart contract, it is extremely easy to keep track of such information, such that the tokens can be resold anywhere while the interests are always distributed to the right person in the right amount and each Reg D does not go over 2000 number of investors or 500 non-accredited retail investors even when the tokens are resold on exchanges outside of our platform.
This means our investors can enjoy liquidity like they are trading stocks on Robinhood thanks to the use of blockchain technology and smart contract!
Good to know: depending on the product you're building, it can be useful to explicitly document use cases. Got a product that can be used by a bunch of people in different ways? Maybe consider splitting it out!