All Lofty properties are listed by 3rd party sellers and you are expected to conduct your own due diligence and research on the properties listed on our marketplace.
After you click on a property you're interested in, you can view pictures and conduct due diligence on the property by clicking on the different tabs, which include:
Let's walk through each of these tabs in more detail.
The Details tab gives a high-level overview of the property.
You can view pictures, bedroom/bathroom count, square footage, property type, and whether the property is occupied or vacant.
The Investment Summary section breaks down the total price of the property as well as the token price and the number of total tokens.
Total Investment = Token Price x Total Tokens
Below that, you can view a Description of the property which typically includes lease terms, renovations, and more.
Underneath the property description is a Google Map so you can see exactly where the property is located, and view the Street View.
The Financials section breaks down all the financials used to underwrite each investment property.
Let's start with the first set of financials below:
Total Investment Value: the total price of the property after adding up the purchase price and all the fees. This value is divided by 50 to determine the number of available tokens.
Underlying asset price: The price the property is put under contract for by the DAO LLC. This number can increase/decrease over time based on token appreciation / depreciation
Closing costs: Costs paid to the title company when transferring ownership from the previous owner to the DAO LLC owned by the token holders.
Initial maintenance reserve: Each property has a maintenance reserve which is used for any unexpected repairs. If any portion of the maintenance reserve is used, it is replenished using 10% of the cash flow.
Vacancy reserve: The vacancy reserve is in place to maintain the flow of rental distributions if the property were to become vacant.
Lofty AI listing fee: Our business model involves taking a 5% listing fee on each property.
Total returns (IRR): This number is calculated by adding the Projected Appreciation and the Cash on Cash return together. It is an estimation of the total returns of the property for year 1.
Projected Appreciation: A measure of the estimated increase in value of an asset over one year.
Cash on Cash return: The cash return on an investment compared to the amount of cash invested. For example, an investment with cash distributions of $50 on a $1,000 investment has a 5% cash on cash return.
Cap rate: The cap rate is the Net Operating Income (NOI) divided by the purchase price. The cap rate is an indicator of the risk and return of a property. It tells you the return of an investment before financing costs.
Annual gross rents: The rental payments the tenant has agreed to pay for the next year via their lease agreement.
Property taxes: Taxes paid by the owner of a property. It is calculated by a local government where the property is located.
Homeowners insurance: A form of property insurance that covers losses and damages to a property, along with furnishings and other assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.
Property Management: The oversight of real estate by a third party. Property managers are responsible for the day-to-day operations of the real estate, from screening tenants to arranging for repairs and maintenance. Owners pay property managers a fee or a percentage of the rent generated by the property.
Annual LLC administration and filing fees: Each Lofty property is owned by a DAO LLC. It costs around $600/year for administration and filing fees for each DAO LLC.
Annual cash flow: The profit the property makes annually.
Annual gross rents - Expenses
Monthly cash flow: The profit the property makes monthly.
(Annual gross rents - Expenses) / 12
In the section above, you can see your projected returns based on the number of tokens you purchase.
Under Projected returns per token you can adjust the three sliders to see your projected returns.
The chart does not take yearly rental increases or vacancies into account.
All properties have a Documents section where you can review specific documents pertaining to the property.
Click View Documents and you will be taken to a page like the one below:
Once you click on the asset link, you will be able to view all of the documents in Dropbox which you may also download.
All of this information is publicly available to both investors and non-investors.
This section walks through how the buying process works on the Lofty marketplace.
Here, you will see a timeline starting with the property being put under contract by the DAO LLC and ending with the Token Offering being complete.
This section of the property page gives an overview of the market the property is located in along with a historical growth chart for both Rent and Appreciation.
Learning about the market a property is located in is a very important step in due diligence, and we recommend you conduct your own research to see if this is a market you're interested in investing in.