I learned about Lofty.ai a couple of months ago on the cryptocurrency subreddit but did a search here and couldn’t find any posts about first-hand experience. So, I figured I’d do a test myself and post the results here. To be clear, this is not a promo and I’m not recommending Lofty.ai. I’m just detailing my experience for others who are interested.
For those unfamiliar with Lofty.ai, it’s a real estate investment firm that assigns fractional ownership of real estate using tokens on the Algorand Blockchain. Since they use the Algorand Blockchain you’ll need to set up a MyAlgo crypto wallet. The properties are then rented, or already rented, and you receive daily rental payments that match your ownership interest.
Here’s my experience:
A property became available back in October. The total investment was $141,950 and they were offering tokens at $50 each. This property had a total of 2,839 tokens available to purchase.
I purchased two tokens for a total cost of $100 on October 21, 2021. So, I’m 2/2,839 (0.07%) part owner of this property.
Every property has a bunch of metrics that come along with it. Things like monthly cash flow, maintenance costs, appreciation, and IRR. I won’t list everything but here are a few for the property I invested in:
Total Investment (IRR) 17.2%, Appreciation 11%, Cash on Cash Return 6.2%, Cap Rate 6.2%.
I began receiving daily rent payments of $0.017 on October 23rd and I’m now up to $0.28. This comes out to almost 6.2% cash on cash return. I can cash out my rent payments anytime to my bank account but I’ll probably wait until my Lofty account balance increases.
In addition to the rent payments, I still have my two tokens currently worth $100. If I’d like, I can sell these tokens back and relinquish my interest in the property. The value of these tokens varies depending on the appreciation of the property. Assuming the 11% appreciation is accurate, these tokens should be worth $111 next year.
I don’t have personal experience with this yet but Lofty submits a K1 form to the IRS and will send me a copy. At the end of the year I get to depreciate my portion of ownership in the property.
That’s my experience with Lofty.ai up until now. I hope this helps others who are curious!