🧺Fractfolio (REIT)

Introduction

FractIt is evolving the landscape of real estate investment by introducing a REIT-like token, that brings together the benefits of fractional ownership and diversified real estate exposure. Each REIT token issued by FractIt represents a basket of fractional property shares, providing investors with a diversified portfolio in a single token. This innovative approach makes real estate investment more accessible, liquid, and transparent.

How It Works

Token Composition: Each Fractfolio (REIT) token, such as Hydra, will be composed of fractibles from multiple tokenized properties on the FractIt platform. For instance, Hydra could represent the following property shares:

• Property A: 15% of a $2 million property = $300,000

• Property B: 35% of a $1.5 million property = $525,000

• Property C: 50% of a $2.5 million property = $1,250,000

Total value of the properties backing Hydra = $2,075,000

If an investor puts $100 into Hydra, their share distribution would be:

• Property A: $14.46 (15%)

• Property B: $25.30 (35%)

• Property C: $60.24 (50%)

Price Pegging: The value of each Hydra token is pegged to the collective market value of its underlying properties. As these properties appreciate in value, the value of Hydra will reflect these changes.

For example, if the combined value of these properties increases by 10%, the value of each Hydra token would also increase by 10%.

Issuance Process:

• Initial Purchase: During the issuance of Hydra, FractIt will acquire and hold the underlying fractional property shares i.e fractibles, backed by real estate, ensuring the token is fully collateralized.

• Transparency: Detailed information on the property composition, token allocation, and valuation methodology will be publicly available, ensuring complete transparency.

How Holders Will Make Money

1. Rental Income: Holders of Hydra will earn a proportional share of the rental income generated by the underlying properties. Let's assume the rental yields for the properties are as follows:

• Property A: 6% annual rental yield

• Property B: 7% annual rental yield

• Property C: 5% annual rental yield

Based on a $100 investment:

• Property A: $14.46 * 6% = $0.87 per year

• Property B: $25.30 * 7% = $1.77 per year

• Property C: $60.24 * 5% = $3.01 per year

Total annual rental income from a $100 investment in Hydra = $5.65.

2. Capital Appreciation: Assume that over the course of a year, the properties appreciate as follows:

• Property A: 15% appreciation

• Property B: 20% appreciation

• Property C: 10% appreciation

Capital appreciation for a $100 investment:

• Property A: $14.46 * 15% = $2.17

• Property B: $25.30 * 10% = $2.53

• Property C: $60.24 * 20% = $12.04

Total capital appreciation = $16.74

3. Expected Total Return: Combining rental income and capital appreciation over the course of a year:

• Total Expected Return = $5.65 (rental income) + $16.74 (capital appreciation) = $22.39

Therefore, the total expected return on a $100 investment in Hydra = 22.39%

Fee Structure for Fractfolio

FractIt will charge fees for various activities related to REIT tokens, including:

1. Issuance Fee: A one-time fee of 2.25% will be charged during the initial issuance of each Fractfolio (REIT) token.

2. Trading Fee: A 2.25% transaction fee will be applied to every buy, sell, or trade of the REIT tokens on the secondary market.