Real Estate on Blockchain.
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Made in Germany

Our Mission

Revolutionise the US$228 trillion asset market by making global real estate investments highly accessible, simple, transparent and affordable for every person or company on earth through our own fully compliant blockchain based investment platform.

Our solution
By utilising blockchain technology in the real estate industry, we will solve problems faced by both investors and real estate developers.

Problems Faced by Investors

High investment fees

For direct real estate investments, the transaction costs are very high and include for example the property acquisition tax, the commission for the real estate agent, and legal fees for the notary and the entry in the land register. Generally, investors pay up to 15% of the property sale price in fees.
Investing in property funds also usually requires high participation and management fees to be paid.

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Limited access to investments

Access to real estate investments is limited due to large investment ticket sizes, lack of specialist knowledge and timing. Only a select few can afford to buy investment properties directly. This is the reason why most private investors do not get good quality deals and decide to invest into other asset classes.

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Lack of liquidity

Direct real estate is an illiquid investment. Investors cannot quickly or easily buy or sell properties. It is time consuming and hard to find a potential buyer for a property if the cash is required at a short notice.
In terms of indirect investments, closed-end property funds, generally, are even less liquid as the investor is usually locked in for the fund duration. Whereas open-end funds offer some liquidity, this can be major issue for those funds that invest in underlying real estate, as they may not be possible to liquidate the underlying holdings in time to meet the liquidity demands of the investors.

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Lack of transparency

Due to complex legal and tax systems in different countries, plus specific local market knowledge that cannot be easily attained - investments often can not be made by the investor themselves. There are multiple third parties involved in the investment process. Each party protects their share of the market and requires fees for any action, primarily because there is lack of information or knowledge in the market.

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Indirect real estate investments

Open-end and closed-end property funds have high fees and in many cases the performance has not been satisfactory. Property shares are highly volatile in the stock market, which means that despite a positive development of the real estate market, negative returns can occur. Finally, investors have no direct control over the investment decisions and often do not receive a regular feedback on each of the investments.

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Slow and prone to errors

The process of investing in real estate, either directly or indirectly (through a fund structure) can take up to a couple of months due to all the parties involved. Having more intermediaries leads to an increase in time spent and increases the margin of error.

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Problems Faced by Developers

Expensive financing

Finding the right financing structure for real estate projects can be very time-consuming and cost-intensive, which requires a lot of knowledge in the financing industry.
Banks charge interest rates for debt financing and high transaction fees.
Due to Solvency II regulations, financial institutions like banks demand some significant part of the financing to be equity. Using funds as equity means that these funds cannot be utilised for a longer period or other projects.

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Limited access to investors

Most real estate developers do not have a large network of their own investors and alternatives to traditional bank loans. To finance their projects they have to go to a bank or pay brokers to find investors for them. Both options are expensive.
Alternatively, developers can seek investors on their own and get a better deal, however, it is very time consuming. In addition, they often can only target a local market and do not have the resources or knowledge to attract international investors.

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Offline processes

The real estate industry is still very much driven by offline processes. Countless piles of paperwork that need to be checked, filled in, signed by multiple parties. It is inefficient and leads to human error. A lot of developers still do not make use of lean digital processes and the multiple advantages of the web. This also includes marketing tools which have been state of the art for years. The kinds of digital tools that facilitate and speed up business processes..

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Why is Blockchain Useful for the
Real Estate Industry?

Market Liquidity

The tokenisation of real estate properties and portfolios makes it possible to make illiquid assets liquid. Delays in being able to convert an asset into cash for a fair market value can cause concern for holders of these assets. Therefore, investors demand a ‘liquidity premium’ for illiquid assets, in which their funds are locked up over long periods. Since the listing on stock exchanges is expensive and time consuming, most real estate investments are not listed and as such are not very liquid. An automated tokenisation process of properties with a direct connection to a secondary market leads to increased liquidity.
Finally, unlike traditional stock markets, token exchanges are currently open 24 hours, 7 days a week, allowing 24/7 liquidity.

Accessibility / Property tokenisation

Real estate investments are usually only accessible for large investors. By tokenising real estate properties and portfolios the real estate market is also opened up to retail investors, who did not have the same access before. The investors benefit from access to a previously closed market with transparent information and leaner, more cost-effective online processing. This low barrier to entry for retail investors gives them the chance to create a portfolio and to optimise asset allocation. This also includes cross-border investments, which would be simpler than ever before.

Transparency

The blockchain immutably stores the history of all transactions and data. The records are not only held by a single centralised entity. In the case of a public blockchain, all information is always available to anyone who has access to it, and is virtually unchangeable. In the case of a private blockchain, the data is still stored immutably, however, access to the information may be controlled. This gives an unique opportunity for transparent real estate deals and will increase the level of trust between all participants. There are numerous pieces of information and data, which could be stored on the blockchain to increase transparency, e.g., who owns the property and independent valuations.

Smart Contracts

By eliminating middlemen and intermediaries, blockchain technology, i.e., smart contracts, allows more efficiency to be brought to outdated processes. In the case of bond settlements, for instance, traditional parties, such as banks, paying agents, trustees and Clearstream become increasingly obsolete. The issuance of securities is very cost intensive since a lot of legal structuring and administrative work is involved. Smart contracts not only lead to a reduction of time but also fees and opportunity costs. Executing predefined actions also helps to have less errors, duplications and human inefficiency. Lower costs for intermediaries could potentially result in a higher return for investors.

Automated Compliance (KYC/AML)

Today, there is no standard for the process of businesses needing to verify the identity of their clients, whether they are an online business or a financial institution. These processes are the so called ‘Know your customer’ (“KYC”) processes designed to prevent money laundering (Anti-Money Laundering, or “AML”). The requirements differ from jurisdiction to jurisdiction and clients usually have to identify themselves multiple times if they would like to use the services of a different provider. The blockchain gives the ultimate opportunity to store identities which could be used across different services, and do so in a way that leaves the control of that data up to the customer themselves.

Interoperability

In the current centralised world, data, services, assets and so on often exist only within each service providers walled garden. Applications don’t work across platforms (Mac, Windows, Android, for example). Similarly, it can take a number of steps to exchange, say a small segment of your long term savings account for this month’s rent, if it’s even possible. With decentralisation and tokenisation as central tenants of the blockchain ecosystem, the ERC20 token standard, for example, provides the opportunity to create a standard for information exchange between different systems, and potentially in the future for standardised exchange between tokenised assets.

Reduced Transaction Times

Local and cross border transactions can be executed immediately on the blockchain. Having a lot of intermediaries in all processes is very time consuming and of course increases fees – everyone wants to earn something on these deals. Blockchain technology not only makes it possible to have real time updates between all parties but also allows the near to real-time trading of ownership interests and to significantly lower costs. In capital markets, the term “settlement” describes the transfer of ownership from a seller to a buyer. The ownership of equities, for instance, usually changes hands only T+2 days after execution of the order. Blockchain technology allows for immediate settlements, which leads to far lower uncertainty and counterparty risk.

How Will iEstate Solve These Issues?

In order to provide solutions to these problems, we are aiming to implement blockchain technology in several phases, since, due to technological and legal constraints, not all the blockchain use cases can be implemented straight away. Furthermore, this phased process will allow us to expand our business model to an international scale.

1
Phase One:

Crypto payments integration and defining Smart Contract use-cases

As a first use case, iFunded will enable investors to initiate payments for real estate project investments with crypto currencies including ETH, BTC and others.
We will also develop smart contract based solutions to automate processes, and eliminate intermediaries, making investments faster, more secure and more profitable for both investors and developers.

2
Phase Two:

Property tokenisation platform

A platform to allow the tokenisation of investment projects will be built. Offering a compliant Security Token Offering (“STO”) for real estate developers who want to access a larger investor market and promote their projects on an international level. Also using smart contract technology to improve the settlement cycle.

For international investors, tokenisation of properties, enabling fractional ownership, will open up an access to the largest asset class, create an additional diversification potential and provide the liquidity that was not there before.

For real estate developers and asset managers, iEstate, together with selected partners, will provide a full-cycle tokenisation service covering technology, legal, tax and marketing topics.

Current Settlement

iEstate Smart Settlement

With the Smart Settlement in place we will be able to save on costs and transfer these savings to our investors offering higher interest rates for our projects. Settlement process will now take hours rather than multiple business days.

3
Phase Three:

International tokenised real estate portfolio

Be the first to create and tokenise a residential real estate portfolio in Germany, in cooperation with a well known and experienced real estate asset manager. Further expansion into the commercial market and finally including other European countries.

German Residentional Properties

Portfolio size:
€50 - 100m

German Commercial Properties

Portfolio size:
€150 - 200m

Created with Sketch. European Properties

Portfolio size:
€300 - 800m

iEstate is not just an idea.

It is based on the existing and successful business: iFunded.

iFunded is a digital real estate investment platform offering direct and indirect real estate investments for institutional & private investors.

iEstate will build on the successful iFunded platform, leveraging in-house knowledge and skills, to ultimately create a transparent and liquid global real estate market.

Learn more about iFUNDED
18

Projects funded

€90 million

Total projects volume

€18 million

Raised capital

Our Roadmap

As pioneer in the real estate investment market, we are working hard on the mission to provide easy, digital access to real estate investments for all since 2015.

2015
iFunded was founded

Legal setup was established. A renown real estate developer joined as a Co-Founder.

2016
First real estate project gathered €1m

Platform was launched and our first real estate project in the heart of Berlin gathered €1m in investments. Leading German VC invests 7-figure amount.

2017
Placed Germany’s largest crowd investment project

Banking licence partnership was signed. Placed Germany's largest crowd investing project with a total investment volume of €49m and a stock listed bond of €10m.

2018(Q1)
Business expansion

Expanding the business to institutional investors and property sales. Offered a portfolio bond of €25m.

2018(Q2)
iFunded goes blockchain

Research and conceptualisation of blockchain integration. Legal research and planning.

2018(Q3)
Whitepaper development

Expansion of the advisory team. Whitepaper development and signing necessary partners and development of smart contracts.

2018(Q4)
Phase 1

Integration of crypto payments. Research smart contract use cases.

2019(Q1)
Phase 2

Integrate smart contracts to improve a settlement cycle. Build a platform allowing to issue regulated asset backed tokens - STO (Security Token Offering). Issue first tokenised property investment.

2019(Q2)
Phase 3.1 - Residential portfolio

List tokens on security token exchanges. Create and tokenise a German residential real estate portfolio.

2019(Q3)
Phase 3.2 - Commercial portfolio

Create and tokenise a German commercial real estate portfolio.

2020
Phase 3.3 - European portfolio

Expand the portfolio to other European countries.

What is the team behind it?

Our team consists of experienced Entrepreneurs with a Successful Track Record and Deep Real Estate Know-How. We have 100+ years of experience in the fields of real estate, finance and technology.

Michael Stephan Michael Stephan CEO / Founder
Jan Sell Jan Sell COO
Sven Baatz Sven Baatz Investment Manager Real Estate & Finance
Markus Wilk Markus Wilk Project Manager and Customer Relations
Dominique Turay Dominique Touray Team Assistance
Vitali Balajevs Vitali Balajevs Product Manager and Operations
Osmar Matos Osmar Matos UX/UI Designer & Front-End Developer
Vladimir Zhitkov Vladimir Zhitkov Full-Stack Developer
Lena Martin Lena Martin Executive assistant

Advisors

Einar Skjerven Einar Skjerven Co-founder
Prof. Dr. Nico B. Rottke Prof. Dr. Nico B. Rottke Spokesman of the Board, aamundo real estate group
Cédric Köhler Cédric Köhler Managing Partner at Creathor Venture
Christian Weniger Christian Weniger Partner at Creathor Ventures
Dr. Matthias Hirtschulz Dr. Matthias Hirtschulz Senior Manager at d-fine GmbH
Dr. Michael Nave Dr. Michael Nave Director & CEO of EVAN Group
Torsten Pfeifer Torsten Pfeifer CEO & founder of Treuenburg Group
Prof. Dr. Sandner Prof. Dr. Sandner Head of the Frankfurt School Blockchain Center

Partners

d-Fine
Frankfurt School
Blonde 2.0

Events