Interland Blockchain-based Real Estate Solution
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Interland Blockchain-based Real Estate Solution
Abstract This white paper takes a deeper look at the underlying issues in ongoing conversations about the global housing deficit today. It examined the performance and prospects of the real estate industry in the face of a fast-changing global economy, establishing the marked growth the sector has experienced in terms of earnings and impact on human development. Despite such growth, the bigger reality on ground is that challenges such as the inability to access mortgage facilities, low property appraisals, complex government regulatory setups, increased selling costs, low property appraisals, lack of transparency, the complexity of government regulatory setups, and privacy concerns due to disclosure of personal information persist. These challenges, the paper submits, have the capacity to undermine every other human and technological development effort in the future, especially in the face of growing world population figures, if nothing is done to meet them urgent. The paper then moved to discuss the way forward, pointing to emerging technologies as the ultimate answer and canvassing the revolutionary use case proposition called the Interland blockchain-based Real Estate Solution. The Interland Project leverages Blockchain decentralized protocols, cryptocurrency, and smart contracts functionality to proffer comprehensive housing solutions to investors and consumers across the globe. The project design involves providing a platform which pays token holders direct dividends from every project completed through a novel equity sharing formula. The unique selling point of the project lies in the ability of the platform to create an economy where real estate projects and processes are driven by a more participatory arrangement which gives allows small-scale players to operate like traditional big investors. Furthermore, tokenizing its platform offers a unique way of liberating the industry from fiat limitations and by creating a transparent project execution model which is both self-sustaining and self-regulated at the same time. In addition, the paper also sheds light on the operational framework of the Interland project, highlighting the key features of the unique value proposition/benefits of signing up to the platform. Details of the platform Dapp/Portal as well as an outlay of its crowdfunding project, explaining the expected coin cap and token distribution are also given. .
Table of Contents 1. Background 1.1 The Problem 1.2 The Market Opportunity 1.3 The Blockchain Proposition 2. The Interland Solution 2.1 About the Project 2.2 Target Market 2.3 Value Proposition 3 How Interland Solves Existing Industry Problems 3.1 A Tokenized Community 3.2 A Tokenized Equity Sharing Formula 3.3 A Tokenized Marketplace 4 Operational Framework 4.1 The Interland Portal/App 5 Operating Terms 6 Project Financing 6.1 Token Details 6.2 Token Distribution 6.3 Allocation of Funds 6.4 Why Invest in Interland ICO? 7. Road Map 8 Conclusion 9. Disclaimer
“Beyond finance, real estate is perhaps the most obvious industry primed
for being upended by blockchain technology.”
Jeremy Gardner, Blockchain Capital1. Background
According to Abraham Maslow’s Hierarchy of Needs, shelter is one of the most important needs
of mankind, alongside other physiological needs such as food, water, air, sleep, and sex. (1) He is
absolutely correct because, virtually all other needs require the space shelter provides to make
meaningful impact to the life of man. As a result, the task of creating accommodation has been a big
aspect of human growth and civilization.
Today, the real estate economy has grown to become the most profitable asset class in the
world, with an economic value of over $217 Trillion. The key driver of this growth in revenue
has been the rapid growth in human population, with current figures standing at a whopping
7.6 billion. 74 percent of revenue within the economy is attributed to homes that people live in,
with an ownership spread of about 2.5 billion households. (2)
1. Wikipedia https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs
2 Savills.com World real estate accounts for 60% of all mainstream assets
http://www.savills.com/_news/article/105347/198559-0/1/2016/world-real-estate-accounts-
for-60--of-all-mainstream-assets
1.1 The Problem
At the moment, the evidence from the sum of all available data on the global housing situation
is: there is an acute shortage of affordable housing for a population growing in leaps and bound.
As such, regardless of the economic returns on real estate development so far, the challenges
on ground have the capacity to create even bigger problems in the future.Buttressing this point, Citi.io capture it thus: “The most severe aspect of the global housing
crisis by far is the housing situation faced by some 850 million people—more than the
populations of the U.S., and the European Union combined—who live in informal settlements.
The map below from the Bloomberg Global City Housing Affordability Index shows that as bad
as the housing affordability crisis is in expensive cities, it is even worse in the rapidly urbanizing
cities of the Global South, where rents as a share of income average 100 percent, 150 percent,
200 percent, or even higher. The most expensive and desirable cities in North America and
Europe are far more affordable by comparison” (3)
3. https://www.citi.io/2018/04/18/the-global-housing-crisis/
Besides the external challenges posed by factors such as climate change, forex fluctuations and
uncertainties in political relationships, the internal issues within the real estate ecosystem have
assumed bigger dimensions and now call for a different approach towards resolving them.
Amongst other things these problems include:
• High Barrier To Loan/Mortgage Qualification T
• Poor Investment Opportunity• Inefficient Title Transfer Process
• Increased Selling Costs
• Low Property Appraisals
• Lack Of Transparency And
• Complexity Of Government Regulatory Setups
• Privacy Concerns Due To Disclosure of Personal Information.
At different levels, these challenges have defied several decent efforts by governments,
industry operators and investors over the past decade and have cast a shadow over the future
of affordable housing.
At the core of all these challenges is the issue of centralized systems and bureaucracies
controlling industry activities. It is therefore not surprising that many of the existing approaches
have not yielded results, because many of them are offshoots of the status quo. The only way
out is through creating a decentralized economy where real estate projects and processes are
driven by a more participatory arrangement which gives opportunity to scale players.
1.2 The Market Opportunity
“Real estate has rewarded investors with strong returns in a world of falling interest
rates and established business models. The positive outlook for the global economy
is an encouraging sign that the rewards will continue for some time to come” (4)
Emerging Trends in Real Estate “The global outlook for 2018”
The challenge of providing affordable housing and a better approach to solving existing
problems represents a huge opportunity for industry operators who can think out of the box.
The fact that real estate caters to population dynamics makes it future even bigger in terms of
revenue earnings than what currently obtains. With world population figures expected to hit
8.5 billion by 2030, 9.7 billion in 2050 and 11.2 billion in 2100, (5) the opportunities for bigger
market expansion are immense.Whether we look at it in terms of the present or against the compass of the future, the size of
the market opportunity in the real estate economy is bigger than can be imagined. Against the
backdrop of today’s housing deficits, the fact that nearly 900 million people around the world
live in slums, lacking access to adequate water and sanitation or adequate housing implies
there is still a lot of ground to cover. This figure is set to even increase, by 2025, to an estimated
that 1.6 billion people if industry operators and investors fail to seize the opportunities that
abound today.
From a futuristic point of view, the picture is even bigger. According to a report on the
TheConversation.com, the world needs to build more than two billion new homes over the next
80 years. While all of that may seem so far away, the truth is that the possibilities suit the real
estate ecosystem because of the long-term thinking that that drives the sector.
With all these encouraging stats, the only thing left is the innovation needed to harvest the
numbers of the future. There is an urgent for industry operators to think beyond the box and
embrace fresh ideas such as emerging technologies in the digital space. One of such ideas is
blockchain technology, whose emergence a decade ago has already being touted as the next
big thing after the coming of The Internet.
4 https://www.pwc.com/gx/en/industries/financial-services/assets/pwc-etre-global-outlook-2018.pdf
5 UN DESA – “World population projected to reach 9.7 billion by 2050
www.un.org/en/development/desa/news/population/2015-report.html1.3 The Blockchain Proposition
A decade after Satoshi Nakamoto launched the Blockchain technology; it has already caused a
major disruption in the world of fintech. Already, beside the Bitcoin reference point, use cases
have already evolved in real estate, medicine, energy, education, social media and ecommerce.
And the list is growing, especially as the suitability of blockchain cuts across any activity that
involves going through a third party to verify, store, and access data to complete an exchange
of money or data. The allure of the technology lies in the unique value proposition of
decentralizing systems and simplifying complex operating models by storing information in a
shared virtual ledger owned by users (called nodes) on the blockchain network. Any change to
that ledger -- if someone transfers money or updates a legal contract, for example -- is
cryptographically verified and then reflected across the entire network, visible to everyone. (6)
Speaking about the far-reaching impact of Blockchain, Kage Spatz, CEO at Spacetwin, noted:
“for most users, the beauty of blockchain will be in the unknown. Just as most of us are
unaware of how 4G technology works or how silicon is processed to produce central processing
units, we continue to use our smartphones on a daily basis. Similarly, blockchain will be a
perfect “backstage” to many changing technologies and will impact the way we educate,
manage, consume, govern and communicate” (7)
The focus of this paper, therefore, is to show how Interland leverages this technology in a
pioneering effort to change the game and deliver better value to its market.
6 Andrew Gazdecki “Five Ways Blockchain Could Change the World”
https://www.forbes.com/sites/forbestechcouncil/2018/09/07/five-ways-blockchain-could-change-the-world/#50c4603573d7
7. Kage Spatz, “Eight Ways Blockchain Will Impact the World beyond Cryptocurrency”
https://www.forbes.com/sites/theyec/2018/03/09/eight-ways-blockchain-will-impact-the-world-beyond-cryptocurrency/2. The Interland Solution 2.1 About the Project Interland is a Real Estate Development Company which specializes in the use of cutting-edge technologies such as Blockchain cryptocurrency and smart contracts to proffer comprehensive housing solutions to investors and consumers across the globe. The project design involves providing a platform which pays token holders direct dividends from every project completed through a novel equity sharing formula. Specifically, the platforms make it possible for investors to invest in real estate industry through Blockchain technology by creating a shared assets ecosystem where property would be owned by multi owners through the equity they have invested into purchasing coins. The ecosystem guarantees users an opportunity divest investment on its projects with as low as 1% of a property for as many properties, with the added bonus of being able to offer their ‘fractional property ownership’ for sale whenever such users want and exit the investment at the fair market value, even when other co-owners are holding onto their ownership. The ideology behind Interland is to change the narrative around the global housing deficit with the goal of helping people become homeowners by simplifying the buying process, lowering the cost of acquiring the property as well as monthly housing cost, while enabling sound investment opportunities for investors. The inspiration for the vision is drawn from the
different painful experiences of its team members while tackling housing problems and an aggregate of similar experiences around them. As a measure to ensure these issues do not continue to undermine the decent efforts of people all over the world while applying for loan/mortgage facilities or processing rent and other property transactions, the research that birthed Interland commenced. The result is a platform that takes the pains of housing away by simplifying processes and open fresh vistas of wealth for everyone involved in the real estate economy. Powered by the blockchain, anyone can now experience the power of a true global village by using Interland tokens to purchase or receive payments for properties and rents from one part of the world to the other. The platform seeks to tokenize the industry by the issuance of digital coins which help to provide liquidity to the real estate industry. Furthermore, Interland platform is a breath of fresh air within the real estate ecosystem because its project provides the highest level of transparency in transactions through sharing of profit of the net revenue with distributed to owners. 2.2 Target Market Launch-wise, the fund will choose the most valuable place to invest, such as Hong Kong, San Francisco, New York, Beijing, and other such top environments, with plans to invest in commercial buildings in the first stage in the pipeline already. The focus at the beginning of the
project is to invest in markets that have strong long-term growth potentials and a strong economy. The Interland Project marketplace always looks out for these indices because we want to safeguard users’ investment as much as we want to solve housing problem. 2.3 Value Proposition The unique selling point of the Interland Project lies in the simplicity of the value proposition to use the tested blockchain technology to create a decentralized economy where real estate projects and processes are driven by a more participatory arrangement which gives opportunity to small-scale players just like big investors. To that extent, the Interland solution enters the scene as a game changer for the industry. Furthermore, tokenizing its platform offers a unique way of liberating the industry from fiat limitations and by creating a transparent project execution model which is both self-sustaining and self-regulated at the same time. The key features of this value proposition are listed below. • Dividends for Holding Tokens: Interland launches one of the very few Property Development Companies which pays their token holders direct Dividends from every project completed using on its platform. • Voting Rights: The platform gives token holders to vote on which projects should be pursued and which should not. This level of democratic governance is made possible through the integrated blockchain technology. • Extra Layer of Security of Property Documents: Property ownership data are not only issued via land registry but also written onto the Blockchain for transparency. By default, blockchain transactions are immutable and irreversible. • Future Proof Developments: Interland platform strategy ensures that its real estate developments offer a guarantee on dividends to all layers of investors regardless of what happens during Boom & Bust property market situations. • Multifunctional community Dapp (Portal): The platform is presented in an easy to understand Dapp/Portal with integrations which help investors monitor activities by showing past/previous/future projects along with ROI per development
3. How Interland Solves Existing Industry Problems As a projected dedicated to solving the global housing problems and the challenges facing the real estate development space, the team driving Interland have come up with a clear-cut formula that answers to all the issues. (Refer to 1.2 The Problem above). These steps are: • A Tokenized Community • A Tokenized Equity Sharing Formula • A Tokenized Marketplace 3.1 A Tokenized Community Interland solves a combination of the identified challenges by offering its platform as a community that gives control of data back to users through the use of blockchain. Users get rewarded from advertising to everything real estate. Key Features • One place for owners, investors, buyers, agents, and advertisers to connect • Opt-in for anonymous email advertising and get rewarded Interland tokens. • Personal data is recorded on blockchain for complete data privacy. 3.2 A Tokenized Equity Sharing Formula Interland solves a combination of the challenges by offering a shared assets formula called Equity Sharing where property would be owned by multi owners through the equity they have invested into purchasing coins. Equity Sharing is a new way to own rental investment property without the having to worry about tenant issues/vacancy since the tenant is actually ‘Owner Occupant’ who will be taking care of the property for all investing co-owners. It enables lower cost of ownership for the owner and creates a stable and diversified real estate ownership opportunity, similar to the mortgage loan, for investors, while making housing payment more affordable and real estate ownership more accessible. The primary purpose of the equity sharing ownership is to help applicant (owner occupant) with funding the property. As an investor, you gain potential property appreciation, in exchange for lower monthly rent, as compared with the market mortgage or rental. Ownership for investors are placed under Trust Agreement, to simplify the maintenance, so there is no need to put multiple owners on the property deed & title Process
Under this arrangement, the buyer purchases the residential property jointly with investor’s
fund, under Equity Sharing Agreement. The buyer then applies for funding and becomes the
sole ‘Owner Occupant’ and the only person with occupancy right, while investors obtain
beneficiary ownership under Trust.
An existing homeowner can also sell ‘portion’ of his/her property to investors. Buyer/occupant
pays the investors ‘rent’. The buyer also pays marketplace a monthly service fee. Investors
purchase fractional ownership, not stock or investment fund.
Comparison between Interland Equity Sharing Formula TIC (Tenancy in Common)
• It is pertinent to note that Equity Sharing does not permit investors (non-occupants) to
take occupancy and is governed specifically by Equity Sharing Agreement, as a way for
investors to help Owner Occupant to achieve homeownership, while TIC is a co-
ownership between two or more owners formed for various business or investment
purchases.
• TIC ownership for residential typically means multiple physical units, but there is only
one deed, while TIC ownership for commercial property typically means a form of
association for investment managed by a sponsor or general manager.
• Equity Sharing for residential property, on the other hand, requires Owner Occupant to
maintain the upkeep of the property solely.
• In Equity Sharing, there is no concept of general manager or limited partner, as each co-
owning investor has equal decision-making discretion to individually approve contract
renewal, sell fractional ownership, or keep ownership and there is no management
decision required.
• Equity sharing ownership is recognized by the US Internal Revenue Service as a form of
‘rental investment property’ for investors.
Comparison between Interland Equity Sharing Formula and Time Share
• Equity Sharing is quite different than Time Share. Time Share is a form of ownership for
all owners to purchase and enjoy the vacation home together, and each owner gets a
certain amount of time each year to live at the property.
• Equity Sharing, on the other hand, does not give investors occupancy right. Investors
earn passive income and do not have to worry about property maintenance, while still
have actual real estate ownership and still have management control of the property,
which is very important since it provides many tax benefits that come with owning real
estate.• It is a new way to own rental investment property without the hassle of worrying about
tenant issues/vacancy since the tenant is actually ‘Owner Occupant’ who will be taking
care of the property for all investing co-owners.
The key features the equity sharing formulas are:
• Makes it easier to buy, sell or invest digitally
• It is a new way to achieve homeownership.
• Owner Occupant and investors become co-owners of property.
• Make housing payment more affordable and real estate ownership more accessible.
• The goal is future mortgage refinance: save for future buy-out, with monthly payment
from owner to investors recorded on the blockchain.
• Create a stable, transparent, diversified real estate ownership opportunity for investors.
• Equity sharing payment is lower than traditional mortgage and leasing, as our business
model allows us to pass the saving to buyers.
• Monthly Payment does not increase during the during of the equity sharing agreement,
except when property tax increases more than 5% annually
3.3 A Tokenized Marketplace
Interland marketplace is a real estate marketplace which connects buyers or existing
homeowners with investors to purchase a single property using Equity Sharing ownership. This
marketplace is offered as a secure & simple and is designed with a view to scaling to absorb a
wider range of real estate solutions and locations.
Key features are:
• Opportunity for Homeownership
For homebuyers, it provides an opportunity to achieve homeownership through a two-step
process: purchasing the property with investors together as Equity Sharing ownership and
refinancing into traditional mortgage after three years.
• Flexibility to sell your home.
o Sell your entire property to marketplace investors and buyer.
o Sell a portion of your equity to Equity Sharing ownership, including paying off
your mortgage
o For buyer hoping to get funding to achieve homeownership
o Seek investors who are looking for a stable rental investment backed by real
estate.
o For a homeowner looking to sell all or fractions of the propertyo List, sell, and either: Stay as occupant if selling fractions of property or Move
out if selling the full property
o For investors looking for stable rental real estate properties
• Review, approve, purchase property starting from 1% ownership, and manage online.
4. Operational Framework
4.1 The Interland Portal/App
As is obtainable with standard blockchain-driven ecosystem practice, Interland has its own
operating DApp which delivers great user experience for web and mobile operating systems.
This app essentially offers the Interland community several functionalities which include:
1. An in-depth view of upcoming development projects;
2. Live development projects with predicted ROI;
3. Previous development projects;
4 Upcoming & previous Charity’s donations;
5 Voting rights; and
6. Native ERC20 Token storage
5 Operating Terms
“Cash out Future Purchase Investment” Feature
It is a unique real estate investment opportunity offered by the marketplace and made simple
by Interland technology. Investors will give cash to existing homeowners, in exchange for a
‘future purchase’ in within a fixed contract date in the future at a risk-adjusted discount of
current appraised property value, therefore realizing the property appreciation. There is no
monthly cash flow, unlike equity sharing purchase together with home buyers.
The benefits of this feature include
• Reduce risk
• Investment starts from 1% ownership
• Diversify your portfolio across multiple properties• Leveraged returns
• Utilize homeowner's mortgage and get a leveraged return from 3x to 5x of invested
money
• Liquidity
• Equity sharing marketplace offers investors liquid investment backed by a real asset,
unmatched anywhere
• Full transparency
• Manage your portfolio and ownership with complete control
• Please see Invest page for example and additional details
‘Owner Occupant’ in Interland Equity Sharing Formula
An owner-occupant, in the Interland Equity Sharing Formula, is a buyer or existing homeowner
who completes the closing process and shares home equity under the equity sharing
agreement, who then becomes the only owner with occupancy rights of the property.
Investor
There are always two distinct parties on an equity sharing ownership: owner occupant and
investors. Buyer or homeowner who wants to take ownership and occupy the property
becomes Owner Occupant, while investors do not have occupancy rights and always provide
the fund and remaining equity.
Interland Referral
Referral within the context of Interland platform takes place when a registered investor invites
the new investor to join our marketplace. The new investor makes an investment in Equity
Sharing ownership.
Interland Referral Bonus
This is an in-built mechanism within the platform which helps build a strong community, which
is the key to solve our housing problems. The idea is to share a good cause and help buyers
achieve homeownership and lower housing costs.
Invest in Future Purchase
Within the context of Interland platform. Future purchase simply refers to a ‘futures contract’
purchase real estate. Under this arrangement, the investor provides cash to the homeowner, in
exchange for agreeing to purchase the property in the future at a risk-adjusted discount in
today’s value. The investor doesn’t own the property presently and doesn’t need to worry
about property maintenance and not responsible for property expenses.Mandatorily, the terms of investment in a future purchase contract are: Length - Typically 7 to 10-Year Contract. The contract can be traded at any time to another investor. The homeowner is required to buy back the contract or property will be bought by an investor or Interland or foreclosure process would be started. The Interland Token, ITL The Interland native token, ITL is an ERC20 standard crypto asset which is the unit of account or currency for payments on the Interland Platform, both in the mobile or web experience. It is offered via Airdrop to users for participating in the Interland project to perform different activities within the community such as payments, donations, and voting on charity rights. 6 Project Financing In the true spirit of a decentralized and self-sustaining ecosystem, the Interland project has put up an ICO crowdfunding program to raise 50 Million US Dollars via a public sale of 500 million native tokens. This sum is to be raised via crowdfunding that is billed for the 3rd Quarter of 2018 as slated in the Roadmap. The details of the crowdfunding program and the distribution of fund to the ecosystem as well as the breakdown of expenditure on the project are given below. 6.1 Token Details Symbol ： ITL Total supply： 110,000,000 1 ETH = 2000 ITL (Pre-sale) Target ：55000 ETH 6.2 Token Distribution 60% token sale 15% hold by the foundation 10% owned by founder, employers 15% early investor 6.3 Allocation of Funds
5% - Land Purchase Funds
5% - Construction Funds
10% - Marketing Fees
38% - Admin & Legal Fees
38% - Architectural/Planning Fees
5% - Blockchain R&D
6.4 Why Invest in Interland ICO?
The Interland platform presents everyone wishing to buy the future by tapping into the
immense opportunities the project holds. Among other things, the Interland ICO crowd sale will
deliver the following value to investors and platform members:
• Everyone can invest virtually.
• Comprehensive due-diligence and protection: comprehensive property data leveraging
machine-learning, transparency, and lower barrier to entry.
• Invest actual real estate, not just backed by real estate
• Diversification and wealth-planning: enjoy monthly rental cash flow, equity appreciation
and tax benefits that come only with real estate ownership, and worry-free
7. Road Map
This roadmap captures the project aspirations. Each Quarter represents a phased process which
provides clarity and simplicity, both for comprehension and execution. The focus for 2019 and
2021 calendar years are represented below:
Q1 2019 Whitepaper release and ICO presale
Q2 2019 ICO public sale
Interland Platform Prototype
ITL Token list on exchange
Q4 2019 Main Platform launch
2020/21 Platform launch at 10+ countries8. Conclusion The imperatives of providing a lasting solution the global housing problem calls for technological intervention. To that end, the Interland project is a welcome development because it steps in at a period when the real estate development economy, just like government institutions, has run out of ideas for the way forward. By leveraging its platform on Blockchain technology, Interland’s innovative real estate development brings democracy to the ecosystem by providing a platform that pays token holders infinite direct dividends. Now, Now, everyone can own a house as well as contribute seamlessly to solving a global problem just by holding the ITL token. It doesn’t get better.
Disclaimer This Whitepaper document is meant to serve as an INFORMATIONAL ONLY with regards to the Interland Blockchain-based Real Estate Solution. All the views expressed herein are neither compelling nor binding on the reader. Use of any fact or view expressed herein is solely at the discretion of the reader. Furthermore, the complete document or any part thereof and any copy thereof must not be taken or transmitted to any country where distribution or dissemination of this Interland Whitepaper is prohibited or restricted. If such happens, the reader is solely responsible for any consequence arising therefrom. No part of this Whitepaper, including this section, is to be reproduced, distributed or disseminated without the express written permission of the Interland Board.
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