Jointer Offers Tokenized Venture Debt Backed By Cross Collateral
By Posted by rescuemission and Community Contributor
Mar 23, 2019 | 1:07 AM
New lending vehicle sets to provide access to $13.98 Trillion USD in locked equity on the blockchain. Former Vice Chairman of the Nasdaq, David Weild, "Jointer's new tokenization approach presents a better solution that has the potential to disrupt the real estate industry."
Today, CRE lenders invest to receive 4%-15% returns variable to risk and usually without cross collateral. Utilizing industry expertise, AI, and blockchain, Jointer developed a low risk property lending solution for hard money, soft money, and mezzanine lenders which provides them high returns, instant liquidity, and cross collateral. Cross Collateral
When it comes to lending funds for commercial real estate, collateral for the money invested is important. Investors want to know that they have a stake in a store of value providing them an extra layer of protection.
Currently, most lenders receive collateral in the single property they invest in or the income (not both) and some lenders receive no collateral at all.
Jointer's process triples the collateral for all that lend funds. Since lending is a venture debt based, investors receive collateral in Jointer as a company, the properties Jointer tokenizes, and the income streams associated with those properties.
The Commercial Real Estate industry has never been friendly to liquidity. Currently, some soft money loans will span over 10 years. If lenders need to liquidate, they can sell notes which is time consuming and usually at a discount.
Focused on simplifying the real estate process, Jointer created a buyback program to provide investors instant liquidity. By acting as a market maker, Jointer is able to make all tokens available to be instantly sold back to the Jointer system.
The industry standard for lenders ranges for 4%-15% based on the property they invest in. Compare that to investors that lend money to Jointer by purchasing debt tokens and receive up to 20% ROI per year based on an index with zero specific property exposure.
How does it work?
Jointer identifies lucrative properties using an AI and deep underwriting approval process. Jointer purchases some of the free equity from those properties but keeps the current sponsor in place since their focus is on value-add additions. At the same time, Jointer issues security tokens that represent digital debt notes to borrow funds from lenders. Lenders receive cross-collateral from all the income streams of all the properties, including the equities themselves, and Jointer as a company. At any time, lenders can redeem their token and liquidate the note.
Learn more about Jointer and a shared tokenized tomorrow.
This item was posted by a community contributor. To read more about community contributors, click here.