UPDATED, May 14, 9:15 a.m: Miami real estate investor Remy Jacobson is a cryptocurrency enthusiast.
But when the Initial Coin Offering – the crypto equivalent of an IPO – craze came and ended at the start of 2018, Jacobson and his brother, Marc-Jean, wanted to create a way the average investor could invest in digital currencies in a less volatile way.
The Jacobsons launched a crowdfunding platform called RealT that allows cryptocurrency investors to invest in real estate assets, starting with rental homes in Detroit, Michigan. The company is expanding next to Cleveland, New Orleans and South Florida, Remy Jacobson said. Jacobson heads the Aventura-based development firm J Cube Development.
Through RealT, investors can browse real estate assets they would like to invest in. Using dollars, they invest in properties and receive a share of their investment in ERC-20 tokens, which are used on the Ethereum platform. Based on their token share, owners then collect income from the rent that the property generates, according to a press release.
A three-bedroom, one-bath home in Detroit is currently available on RealT for $63,750, which costs 1,000 tokens. Investors can purchase tokens for $63.75 apiece.
Through ownership of an LLC, investors receive an interest in the properties. That gives token owners the ability to physically enter and visit the property with proper notice to tenants, according to the company’s website.
“For real estate investors, this creates liquidity overnight. If they want to list the property within a matter of days, they could get the sale in tokens,” Jacobson said. “It is a really effective tool for landlords.”
South Florida has been home to a few known cryptocurrency deals. Earlier this year, a downtown Miami office building leased to WeWork was expected to sell for $65.5 million in a deal that will be financed through one of the largest known cryptocurrency real estate auctions of its kind. Bitcoin investor Michael Komaransky sold his Miami home nearly entirely in cryptocurrency last year, for about $6 million.
Digital currency still remains highly volatile, and while it’s been used in smaller real estate deals, it has yet to become an industry-accepted form of payment.
Remy Jacobson’s J Cube Development owns the property at 4141 North Miami Avenue in the Miami Design District. He’s expecting to close on a construction loan for that project soon, he said. In 2018, he sold a 30,000-square-foot property at 2217 and 2233 Northwest Miami Court in Wynwood to hotel developer Quadrum Global for $8.55 million.
Correction: A previous version of this story incorrectly stated the value of each token.