A real estate firm in Los Angeles, California, has come up with a new way to fund real estate investments that literally cashes in on the investment trends associated with cryptocurrency. The company, Aperture Real Estate Ventures, will launch a real estate-backed cryptocurrency at the end of February. The currency will be called Property Coin (PCX), and proceeds from its sale will “go toward growing Aperture’s real estate business, which uses proprietary technologies to spot and then invest in undervalued properties in metro areas across the U.S.,” reported the National Association of Realtors (NAR).

Aperture representatives said that the currency will be available for purchase using the U.S. dollar, bitcoins, and Ethereum. “Unlike many cryptocurrency offerings, Property Coin’s proposition is 100 percent straightforward. 100 percent of the net proceeds from sale of Property Coins will be used to invest in properties and loans identified by our proprietary software and our experienced team,” said co-CEO of Aperture, Andrew Jewett, in a public statement. He went on to explain that half of the profits on those real estate ventures will also be immediately reinvested into other real estate-related investments in order to create “natural price appreciation” for Property Coin holders.

At present, Aperture plans to focus investments in the United States. However, investors can purchase Property Coin from any location and, “when future property market conditions are appropriate, Aperture will look to invest in global property markets,” the company stated. The company buys residential properties to fix-and-flip and also makes loans to other real estate investors. It launched in 2016. Aperture hopes to raise $50 million via Property Coin sales in order to “finance loans, purchase hundreds of homes, revitalize neighborhoods, and bring new affordable housing to local communities across North America.”

The company offers a timeline and game plan for its fundraising efforts. The timeline estimates that the group will begin purchasing properties and underwriting loans as early as March of this year and estimates that it will begin liquidating those investments as early as the second and third quarters of 2018. Aperture states it hopes to “continue growth and the reinvestment of proceeds from property and loan liquidations” into Q4 2018 and beyond.

At present, it is not entirely clear how Property Coin will perform in the short- or long-term, of course, since it is an entirely new currency. However, real estate investors considering investing in this or any cryptocurrency should, as always, do plenty of due diligence to determine what, if anything, is backing their investment. The premise behind Property Coin is an attractive one since the issue with many cryptocurrencies is that they have little, if any, real assets backing them. However, the value of this currency will hinge on the successful investments of the company issuing it, so there is certainly still some risk involved.

Investor Insight:
Real estate is one of the safest forms of collateral for any investment, including cryptocurrencies. However, this is still a new form of investing and should be approached with caution.

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  • Carole VanSickle Ellis

    Carole VanSickle Ellis serves as the news editor and COO of Self-Directed Investor (SDI) Society, a membership organization dedicated to the needs of self-directed investors interested in alternative investment vehicles, including real estate. Learn more at SelfDirected.org or reach Carole directly by emailing Carole@selfdirected.org.

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