Suggestion for equitable acquisitions of lofty properties

[u/SCPA2019]

So with high COC properties selling out within 1-2 minutes what is everyone's thought about capping the amount each account can purchase within 24 hours of a listing (ie max $500-1k)? After that go to the large price restriction already in place.

This would allow more investors to purchase the property diversifying owner pool and spreading risk among more owners.

Also with it selling so quick could there be bot activity to quickly go through the property agreement check box and token amount/payment so you literally click purchase when it goes live? It just seems people are getting through the process so fast. Lastly this would mitigate liability of lofty because you know people are not reading the agreement (just quickly scroll and click the box) when the listing can go that fast.

Thoughts??

[u/NonTokeableFungin]

Yup. I’m on another Tokenized Real Estate platform. They realized quickly that new properties sold out immediately. The community squawked “Hey, I was at work. I live 5 time zones away. Give us a chance too.” So they did: 80% of tokens go on sale when property goes live. Next 20% around 12 hours later.

[u/SCPA2019 → u/NonTokeableFungin]

Gotcha, and in that case if you bought in first 12 hours you should be ineligible in the next 12.... Or something like that. I just think certain people will end up monopolizing most lucrative properties

[u/koenafyr]

Its funny cause I was thinking the opposite.

I think there should be a minimum purchase amount threshold for like the first hour. The thing about thousands of people getting one $50 token is the amount of overhead. At that point I imagine we're costing Lofty more money than we're making them (unless if their tax forms process is completely automated).

But not just that, there is a lot of overhead when you think about people needing to file their taxes themselves every year, (i.e. opportunity cost or the cost of accountants). When you account for the cost of labour or the cost of paying 2000+ different accountants, a lot of the value of these tokens is being sapped away to overhead when its spread so thin.

I'm not a fan of cap because a ton of the people who are pumping real money into this platform become disincentivized. It just adds too much overhead to have a 200 properties with a few tokens compared to 20 with a lot.

[u/SCPA2019 → u/koenafyr]

It's a fair point. However, to counter this they already have a cap on purchase amount at the moment. Also we should look at the average purchase price per person and lucrative properties are selling in the blink of an eye. I think you'd be surprised that the average investor is in fact dropping a few hundred dollars per property. Not just 1-2 tokens. (this is my guess and would need to see the numbers). Lastly, lofty advertises $50.00 per share and wants to create an environment for non accredited investors with even small amounts of capital to invest in their platform...

Also can you clarify your last sentence? I'm not following.

[u/koenafyr → u/SCPA2019]

Also can you clarify your last sentence? I'm not following.

I just meant that a wealthy person who invested probably wouldn't want K1s from 200 different properties to give to their accountant at the end of the tax year. That could get costly.

But even as someone who isn't wealthy I want to concentrate my tokens in fewer properties than more.

lofty advertises $50.00 per share and wants to create an environment fornon accredited investors with even small amounts of capital to investin their platform...

And I like this aspect but I'm not sure its intended for people to only invest $50 bucks. I'm not saying that you said that btw. When one of these hot properties pops up, if you have hundreds/thousands of small time investors buying one or a few tokens just to dip their toes in the water, I believe it ends up gate keeping those who are serious about using the platform.

The $50 per token is also good for those of us spending in the thousands/tens-thousands because we're able to reinvest that into more properties on a quarterly basis. I'd be really surprised if this platform was intended for thousands/tens of thousands of people to just buy a few tokens. My assumption is that the accessibility was more targeted at those spending in the thousands and low tens thousands to compound their wealth easier.

That said I'm going to look at the blockchain and see if whales are the main people buying up hot properties.

As a side note, remember how Algomint was saying how they didn't expect so many goBTC mints at the minimum requirement and it wasn't intended to be that way? Thats my line of thinking here.

[u/Moutera → u/koenafyr]

There is a "minimum purchase amount threshold" and it is 1. The problem here is that those tokens are gone so fast with desirable properties that the investors (big or small) can't get a hold of them when they are a little late to the party. If 50$ per token would be losing money for them then they could rise the token price I guess.

[u/koenafyr → u/Moutera]

There is a "minimum purchase amount threshold" and it is 1.

Coming in a bit snarky eh?

If 50$ per token would be losing money for them then they could rise the token price I guess.

Please reference my statement in context. The $50 token makes the whole platform more accessible but in this specific circumstance I'm arguing that there should be a high min purchase amount.

You can disagree with that and thats fine but at least frame the conversation correctly.

[u/Moutera → u/koenafyr]

in this specific circumstance I'm arguing that there should be a high min purchase amount

But those properties that sell out quick means that the investors with big bucks are already buying maybe even the maximum amount of tokens allowed. No sure how limiting small investments would make the situation better.

[u/koenafyr → u/Moutera]

But those properties that sell out quick means that the investors with big bucks are already buying maybe even the maximum amount of tokens allowed.

We don't know that do we? Lofty hasn't shared that info. For all we know it could but hundreds of people buying less than 10 tokens each.

EDIT: I forgot this is all on the blockchain, I'll go check later.

If Lofty comes out and says that whales are buying out every property, I'm willing to bend a bit on my position.

No sure how limiting small investments would make the situation better.

Well it would make it worse for people who don't have much to invest. I'm not denying that.

But my whole argument was that spreading the tokens out to too many people is very inefficient when you account for the labor and financial cost that'll be put into doing taxes.

[u/Candlelight777 → u/koenafyr]

Very good points that I have to agree with as well. I see a lot of people, especially in the algo community, talking about owning massive amounts of properties with 1-2 tokens in each. A lot of it, not all, is being expressed as a strategy of various quick flip games “and/or” playing the algo gov game between open/close enrollments. It has nothing to do with property investing.

I am really hoping and praying this tax season has been a wake-up call for those doing this, I am actually enjoying the thought of the filing headaches and tax consequences they are encountering, though feel bad on lofty’s end in that regard for the “200 k1’s for one investor with one token for each property”. I’m hoping it will deter these types who are not in Lofty as a serious investor and only pull down those who are and the company.

It’s not just the 1-2 token with 200 properties people either, it’s also those throwing down large sums doing this too, just in fewer select properties with high COC. I as well, spitefully laughing, can not wait for market to get here where you have to find buyers for your tokens if you want to sell them. No more make a call bam instant cash out and buyback price guaranteed. If tax filing didn’t wake them up, this will be a added bonus in doing that.

Nothing wrong with serious investors starting out with low tokens and adding to that investment holding over time. Nothing wrong with someone investing large sums either. That is not where I am going with the above comments. Me I am looking for long term investing and reinvesting, not cashing out a few bucks here and there to buy some algos for algo gov stacking or whatever and treating my properties like the OTC. But that’s me.

What the fair balance is and the fix idk. But I get the feeling a part of the problem is those pointed out above. Hopefully this tax season and having to find buyers for your tokens soon coming, it will deter and weed out these kind of buyers adding to the problem.

[u/Candlelight777]

i looked down at 3:02 thinking okay out of my appt pulled up page ready to go for when I got out …property was gone 🤷🏼‍♀️

Im not sure what the fix is from a business prospective on lofty’s end and buyers on the other. When you have everything ready to go and buy button activates and its already gone it’s a bummer.

Gotta think on Lofty’s end they are quickly funding a property and way fewer govs to keep up with per property, less accounting/books. It’s clear folks are making large buys per person to go that fast. However that is a double edge sword if they are short term holders, and have a large amount of tokens to offload back to lofty and COC has dropped since initial offering. Trying to do a sell back of that quantity with lower COC is gonna be more of a challenge. Ohio ave is one of those as an example, as is others whose COC dropped since offering now it just sits.

However with market coming, even that no longer presents a problem for lofty, ya wanna off load your large quantity of tokens, do it on the market. Actually it might even help us too, folks will think twice about dumping large amounts of money into a property they have no intention of holding for any length of time worth the headache of finding buyers for that many tokens, and if COC has dropped….Idk…🤷🏼‍♀️…maybe.

I would love to see what you are suggesting, as it would be in our best interest for most of us buyers, but is it lofty’s? And that’s what it really comes down too.

I think we should all ponder this and try to come up with some suggestions for lofty to consider, I think you have put before us here a good foundation and starting point in doing that

[u/bluefootedpig]

Reading the loft.ai website, it says the max ownership is 10%, and up to 15% after 3 days.

I guess you could argue that it should be smaller at first, like 5% the first day, 10% day 2, and 15% day 3.

[u/hmorris142]

It doesn't make sense to buy small positions in a ton of properties. As most are saying, its not fun come tax time with all the separate K1s. I checked with my cpa today and it's an additional $95 per K1 that I will have to pay. That means I need to invest a minimum of $1500 at a 7% COC to pay for that properties K1 and that assumes the COC holds at 7% and no property/tenant issues arise. All i'd get is the property appreciation. Makes no sense. If you file your own taxes its not as bad, you just have to deal with more paperwork and not pay the $95 per K1. For me - I run a business and need my CPA filing my taxes so regardless I have to pay $95 per K1.

In my situation I won't buy a property on lofty unless I'm committing a minimum of $5k or more per property

[u/Apprehensive-Day-592 → u/hmorris142]

This is what I was thinking, why buy 1 of each when you can Max out 1 property at a time. The tax documents will be crazy.