The concept of fractionalized real estate has been trending more since the advent of fintech platforms, but blockchain technology now unlocks new ways of owning, collecting and sharing property ownership. BFF spoke to Lilo cofounder and CEO Emily Chan and Poolsuite founder Marty Bell to learn their visions.
Edited excerpts:
I was born and raised in Australia for the first 18 years of my life and moved over to the U.K. for my studies, and I've sort of been here ever since. I have a legal educational background and studied law at Cambridge and then went on to complete my Masters in Law and Finance at Oxford. I then did a very brief stint in New York with the UN doing some strategic planning, and then I decided to start off my career in finance. So that's sort of where my exposure to real estate really kicked in. I was investing in European real estate for a number of banks and private equity funds. First for Goldman Sachs in London, and then I moved to Apollo in London, investing out of their flagship European fund.
Earlier this year, my current founder and I founded Lilo. Essentially, what we're doing with Lilo is carving out a new property tech (prop-tech) asset class which we call invest and experience. This essentially enables people to make fractional investments into high-end real estate focused on main cities worldwide. They are investing into fractional real estate, and their shareholding has a dual aspect: The first is the investment ownership portion whereby the value of their share increases alongside an appreciation in the market value of the property. And then there's the utilization portion whereby each fractional owner gets exclusive access over the property for their prorated portion of the year. So 1/8 fraction for example would grant you exclusive access to the property for 45 days in the year. So those are the fundamental tenets of what we're building out with Lilo. The ultimate vision is carving out a new asset clause where real estate doesn't just become an outright ownership product, but rather becomes a more liquid product and essentially becomes a collectible, which is really where the Web3 and the blockchain world comes into play.
Hi, I'm Marty Bell. I'm from the Highlands of Scotland, but I live in Lisbon. I run a fairly eclectic company called Poolsuite. We're best known for our suite of music apps called Poolsuite FM, which are like a virtual escape, ultra summer music and very highly stylized in a 1980s super summer aesthetic.
Out of that, we've launched a sunscreen company called Vacation, which is getting pretty big, and on top of all of that, we recently launched an initiative called ManorDAO where we want to acquire a Grand Manor estate — likely somewhere in Europe —along with our community, to own a physical space. This is an IRL manifestation of the Poolsuite brand world so that people who have been listening to the music websites for years, who have bought into vacation can come and actually see the brand world in real life and immerse themselves in it for days or weeks at a time. It's been a dream for years, and we're trying to work out how we piece together all these new and novel building blocks that are emerging in Web3. We know we can piece them together to own this space with our community and be able to raise something like 5 to 6 million EUR to put that together. It's definitely a big challenge, but one we're excited to solve.
We bring fractionalized real estate into the Web3 conversation by understanding that tokenized real estate is not purely an investment product, but it can also be an experiential product and one that contributes towards an expression of our identities. One core application of this is community, but also tokenization on the blockchain.
What I find interesting about this is it enables a new real estate asset class to be carved out and that's real estate as a collectible. What we found is it enables people to use the collectible structure to express their unique identities in the same way as we saw them do with collecting sneakers with NFTs and investing in crypto, but instead of instead of making it a purely emotional decision, they're able to use this collectible structure while placing their capital into an asset class that has proven its resilience and stability over time.
Yeah, I definitely get excited thinking about flipping shares of real estate as in Lilo property. If I could swap one of my shares in Lisbon with someone else's share in Tokyo and then I could go and stay there for 45 days because we've just done a quick transaction swap in our wallets and I can now somehow open the door of this apartment in Tokyo with an NFT that's in my crypto wallet — that starts to get incredibly exciting.
Unfortunately, there's many regulations that will stop that from happening, but it's exciting to think that we could get there sometime in the near future.
On the on the community side, I just think what we've seen in the formation of DAOs in the last in the last year and the way that people have started to form capital to be able to do something as ambitious as acquiring a Grand Manor estate or, if you look at the likes of LinksDAO, which I think raised something like $10 million over the course of about five days to acquire a a golf course. There's just these whole new ways to fund things. There was Kickstarter, there's Patreon, and I just think Web3 is this whole new way of being able to pull much larger sums of money and then track that ownership on chain.
That said, it's not quite true fractional ownership yet. You'll get a token from the DAO, which is technically governance that you're getting. It's not true equity in a property or whatever the DAO owns, but it's as close as you can get right now without breaking securities laws.
But yeah, I would say the the new ways to form capital between a lot of people is particularly exciting to me.
I think it's people that don't necessarily have the funds to go and invest in a property abroad or the down payment for a place of their own. And it might even be someone that doesn't have the funds to invest in a share of a property with Lilo, but someone who's very excited to feel part of something and can put up maybe $1,000, $500 bucks, and even if that only gives them a couple of days every year, they get to be part of the whole journey and the story of following along with the process. The entertainment part of it is so huge. [For comparison,] there's some Patreon accounts and YouTube channels that have hundreds of thousands of subscribers. There are Patreons earning something like $30,000 per month just for people to follow along with no other perk than getting behind the scenes videos of people doing these ambitious properties abroad.
So I think it's people who are deeply interested in new ways of doing things, new ways of living. They like to dream about what their life might be like if they were to be able to go and buy a Chateau in France instead of living in London or in New York. So that's definitely not a data-driven answer, but some just general feelings from from our community.
The fractionalized real estate product is still relatively nascent and avant-garde, right? It's still very much an emerging product in the in the the whole context of the traditional real estate industry. And so that means that what we've found is the typical investor drawn to this kind of new asset class, they tend to be embodied by an early adopter striving to become pioneers of a new asset class. And we often see these people are digital nomads looking to become part of a global decentralized community, and they're sharing experiences and collections around the globe, and they also hold a certain affinity for the concept of decentralization and define notions that end up disrupting traditional industries. These people seek to build their identity through their investments and create joy on a personal level through these collectibles. So it's highly likely, therefore, that they have actually already made investments in other collectibles either on or off the blockchain as well. That's what we've found through looking at our potential customer list at Lilo.
For more insights, listen to the full conversation with Emily and Marty
This is not financial advice. If you don't want to spend money investing in crypto or Web3 — you don’t have to. The intent of this article is to help others educate themselves and learn.
