Property Financials

In this section, we share all financial data pertaining the home and our projects of what we believe returns will be over a 5 year holding period.

Financial Summary & Definitions

• Total Investment Value is the final price of the home including Homebase fees and the capital maintenance reserve amount. Home tokens trade with both these fees included in the token price.

• Underlying Asset Price is the market value of the home

• Homebase Closing Fee (4%) is the fee that Homebase charges on the sale of the home for all the services done to get the home on-chain and fractionalized

• Maintenance Reserve (5%) is the amount of money held in an escrow account on behalf of the LLC which is utilized whenever improvements to the property is needed. Whenever there’s a delta between required reserves and actual reserves, it is refilled via rental income from the property.

• Total Returns (IRR) is the projected average annual growth rate of your investment in this property over a 5 year hold period (includes rent and appreciation).

• Projected appreciation is the estimated increase in home value each year.

• Average 5 year ROI is the average projected return on investment over a 5 year time horizon based on rental cash flow minus expenses

• Cap rate (capitalization rate) is a rate of return commonly used to evaluate real estate investments. It is calculated by dividing the net operating income (annual cash flow) by the value of the asset (home price).

• Monthly Gross Rents is the full amount of rent paid by the tenant each month

• Vacancy rate is the projected period of time in which the property will not have a renter. This is primarily for risk mitigation

• Monthly utilities is the projected utility cost for the property each month which includes water bill, electricity bill etc.

• LLC Franchise Tax is the yearly expense required to pay to the State of Delaware for managing the property via LLC

• Property Management Fee is the monthly cost paid to local property managers to take care of the property.

• Total Monthly Costs is the sum of all projected expenses for the property each month including but not limited to:

  • Utilities

  • Property Management

  • Repairs

  • Vacancy

  • Property Taxes

  • Insurance

• Expense to Income Ratio is the total monthly costs divided by your monthly pre-tax income (rent).

• Monthly Cash Flow is the net operating income expected on the entire property each month. Effectively, rent minus expenses.

Within the property financials page is also a returns calculator. Using the sliders or data entry on the right side, you can adjust the number of tokens to be purchased, annual appreciation expected, or the annual cash flow. The calculator will output cumulative returns including cumulative appreciation and cash flow.

To view the marketplace, go to app.homebasedao.io.