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  • Welcome to Lofty's FAQ 👋
  • FAQ
    • What is Lofty?
    • How does the Lofty Marketplace work?
    • Which payment methods can tokens be purchased with?
    • Can non-US citizens participate?
    • Can I sell my tokens anytime?
    • How does Lofty make money?
    • How do taxes work?
    • How does governance work?
    • How are repairs handled?
    • How often do I receive rental income?
    • How do I withdraw my rental income?
    • Do I benefit from depreciation?
    • Will I lose my tokens if Lofty AI goes out of business?
    • As an owner am I liable if any lawsuits / accidents occur at the property?
    • Who manages the properties?
    • What is your Property Manager's process and tenant selection criteria?
    • Are Lofty properties purchased using debt?
    • Who owns the properties that are being listed on your platform?
    • How long after I pay will I receive tokens in my Algorand wallet?
    • Does the price of Algorand affect the price of Lofty tokens?
    • What is an Algorand wallet’? Why do I need one?
    • Which blockchain is Lofty AI using to tokenize properties?
    • How many tokens can I purchase in each property?
    • Can I do a 1031 Exchange with Lofty properties?
    • Who legally has ownership of these properties?
    • How is token appreciation determined over time?
    • How do we ensure each LLC owns the deed on its property?
    • Do I have to submit my ID before I can participate?
    • Why do I need to fill in personal information, and is it encrypted?
    • Why is my ID verification taking so long?
    • How can I track the performance of my property?
    • How long are properties held before they're sold?
    • Do you have 2 Factor Authentication (2FA) available?
    • What happens if a property doesn't sell fully by the deadline on the website?
  • Glossary
    • IRR
    • Cash on Cash return (CoC)
    • Cap rate
    • Appreciation
    • Net Operating Income (NOI)
    • Diversification
    • Operating Expenses
    • CapEx
    • Single-Family
    • Duplex
    • Triplex
    • Quadplex/Fourplex
    • Capital Gains Tax
    • Closing costs
    • MLS
    • HVAC
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  1. FAQ

How does the Lofty Marketplace work?

Lofty is not a fund. We do not purchase properties, flip them, and then sell them on our website.

Instead, we are a marketplace like Airbnb, eBay, or Amazon.

The Lofty marketplace consists of buyers (token holders) and sellers (people who want to sell their properties). Currently, there are less than 5 sellers who are permitted to list properties on the Lofty marketplace. These sellers have years of experience rehabbing and selling turnkey properties with a great track record.

Here is how our marketplace works: Step 1: A seller submits their property to be sold on the Lofty marketplace. The property is either approved or denied based on factors like occupancy status, condition, location, rental history, and more.

Step 2: Once approved, the property is put under contract by a newly formed LLC. The LLC is then tokenized into individual $50 tokens on the Algorand blockchain.

Step 3: A professional property inspection company will inspect the property and provide a report. If repairs are needed, the seller will make the repairs before closing or provide a credit to the LLC.

Step 4: The property is listed on the Lofty marketplace. Once the property is fully funded, the LLC will close on the property with the Title Company and the deed will be transferred to the new LLC.

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Last updated 3 years ago