A Smarter, Simpler Approach to a Private REIT with Competitive Fees and Blockchain-Powered Liquidity
This fund retains the core advantages of a traditional private REIT—steady income, long-term appreciation, and tax efficiency—while leveraging blockchain technology and smart contracts to reduce complexity, increase transparency, and enhance liquidity. Through The Deed Protocol, we tokenize ownership interests and streamline real estate operations in ways that benefit both property owners and investors.
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Private REIT Structure Legally structured as a private REIT, the fund adheres to the same regulatory framework and tax advantages as traditional REITs, providing security, transparency, and tax-efficient income distribution.
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UPREIT Contribution Model Property owners can contribute real estate to the fund through a 721 exchange, receiving tokenized OP Units in return. This allows contributors to defer capital gains tax while gaining access to a diversified, income-producing portfolio.
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Tokenized Shares via The Deed Protocol Instead of paper certificates or illiquid shares, investor interests are recorded as digital tokens secured on a blockchain. These tokenized shares represent ownership in the fund and are tracked using The Deed Protocol, enabling instant transferability, transparency, and compliance.
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Each token is designed to track the Net Asset Value (NAV) of the underlying real estate portfolio, maintaining a value near $1.00. This is known as a “soft peg” — not a fixed rate, but one maintained through smart contract mechanics, token issuance, and buyback reserves.
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This design simplifies how investors measure performance and liquidity, much like mutual funds priced at NAV. As NAV increases through rental income or property appreciation, token holders receive new tokens pro rata, increasing their position value without changing the per-token price.
Unlike traditional private REITs, this fund offers potential liquidity:
- Token transfers may occur within approved secondary markets, curated stablecoin pools, or through internal swap mechanisms.
- The soft-pegged token model makes value tracking easy and supports investor confidence in secondary markets.
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General Partner (GP) Role The GP is responsible for acquisitions, asset management, and fund strategy. Their compensation is tied to investor performance, and they receive no performance fee unless the 8% hurdle is met.
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“Skin in the Game” The GP maintains a 20% equity interest in the fund, aligning their financial outcomes with those of the LPs (investors). The better the fund performs, the more the GP earns — and only after you do.
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Blockchain-Powered Reporting Through The Deed Protocol, investors can verify ownership, track transfers, and monitor performance on-chain, ensuring a level of transparency that traditional REITs often lack.
- General Partner (GP): The fund is managed by a General Partner who sets the strategy, oversees acquisitions and development, and ensures operational performance. The GP also acts as the property manager, earning a 7.5% fee on gross rental income, consistent with industry norms.
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Dividends: As required by REIT law, the fund distributes at least 90% of taxable income to token holders. These are paid as digital dividends and taxed as ordinary income.
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Capital Appreciation: Instead of increasing the token price, appreciation is reflected by additional tokens issued to investors. For example: If the NAV rises by 10%, an investor holding 10,000 tokens will now receive 1,000 more — increasing their total to 11,000 tokens, still priced at ~$1 each.
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Liquidity via Tokenization: Unlike traditional private REITs, this fund offers the potential for secondary market liquidity. Investors may be able to buy/sell their tokens on curated stablecoin pools or compliant secondary marketplaces, giving them more control over exit timing.
We’ve consolidated industry-standard practices into a clear and aligned compensation model:
| Fee Type | Amount | Based On | Purpose |
|---|---|---|---|
| Fund Mgmt Fee | 1.25% annually | NAV (Net Asset Value) | Covers fund operations, administration, compliance, token infrastructure |
| Property Mgmt Fee | 7.5% | Gross rental income | Standard rate for leasing, maintenance, tenant relations, and day-to-day ops |
| Performance Fee | 15% (after 8% return) | After investor hurdle | Charged after investors (LPs) receive an 8% preferred return (“waterfall”) |
This avoids fee stacking, rewards performance, and mirrors compensation structures seen in leading real estate syndications and private equity funds.
Investor contributes: $100,000 Receives: 100,000 tokens (valued at ~$1.00 per token)
- Properties generate 10% gross rental income → $10,000
- 7.5% property management fee ($750) → Net: $9,250
- 1.25% fund management fee on NAV ($1,250) → Net: $8,000
- 8% preferred return met → GP earns no performance fee
📥 Investor Return: $8,000 (~8.00% yield)
Since the hurdle is met but not exceeded, no performance fee is taken
- Rental income increases → 11% yield = $11,000
- NAV increases 5% → Receives 5,000 tokens (still pegged at ~$1.00/token)
- PM fee (7.5%) = $825 → Net: $15,175
- Fund fee (1.25%) = $1,250 → Net: $13,925
- Preferred return = $8,000 → Excess = $5,925
- 15% promote on excess = $888.75 to GP
- Net to investor: $13,036.25
📈 Effective Yield: ~13.04%
If the NAV increases 5% due to property appreciation:
- Investor receives 5% more tokens: 100,000 → 105,000 tokens (still pegged at ~$1.00/token) Your ownership position grows without creating tax liability or requiring valuation recalculation.
| Traditional Private REIT | This Fund |
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| Multiple, opaque fees | Transparent 1.25% + 7.5%, no fee stacking |
| Paper-based or illiquid shares | Tokenized ownership, recorded on blockchain |
| Manual 1031/721 property exchanges | Instant, tax-deferred exchanges/contributions via DeedNFTs |
| Limited exit options | Redemption options with potential secondary liquidity |
| Opaque transaction mechanics | On-chain transparency via The Deed Protocol |
| GP gets paid regardless | Incentive-aligned fees after 8% hurdle |
| Manual closings, delayed reporting | Real-time, on-chain settlement, traceable ownership |
This fund is not only focused on producing stable rental income but also on driving long-term value creation through community development, smart infrastructure, and modular home accessibility. Our approach enables us to act as both developer and lender, which creates strong return potential while serving an under-addressed market.
- Multi-purpose zoning and modular home expansion
- Transforming raw land into mixed-use, modular, regenerative communities
- Incorporating sustainable building practices, off-grid technology, and smart infrastructure
- Driving long-term appreciation while generating income along the way
This approach balances consistent dividend income with capital appreciation, reinforcing the value of investor tokens and helping maintain the soft peg to NAV.
This growth-focused approach supports token value growth and acts as a natural hedge against fluctuations in token liquidity or real estate cycles.
The fund acquires undervalued or undeveloped land in key high-growth or affordable markets. Once acquired, we oversee the entire land planning and development process, including:
- Designing community site plans and parcel maps
- Installing essential infrastructure: roads, grading, water systems, septic, power lines, and etc.
- Zoning and entitlement approvals to support residential mixed-use
- Establishing pads and utility-ready lots to reduce construction friction
This vertically integrated approach allows us to add significant value to the land while maintaining long-term control over the development lifecycle.
To help meet urgent housing demand in urban areas and generate near-term returns, the fund will pursue a dual-pronged infill development strategy focused on:
- Acquiring vacant infill lots in cities for modular/tiny home placement
- Entering long-term ground leases with homeowners to place Accessory Dwelling Units (ADUs) in backyards
This approach complements our master-planned developments by generating incremental income and helping cities achieve state and local housing mandates (such as California’s ADU expansion laws), while creating shared upside for landowners and investors.
We identify homeowners with large or underutilized backyards (typically 3,500+ sq ft lots in urban/suburban areas) where a modular ADU (300–700 sq ft) can legally be placed. These homeowners agree to ground lease a portion of their land for 10–30 years, allowing the fund to place and operate an income-producing rental unit on their property.
The homeowner retains full ownership of their home and land, benefits from appreciation and lease income, while the fund builds and manages the ADU.
| Step | Description |
|---|---|
| Homeowner signs ground lease | Fund leases 400–850 sq ft of backyard for 10–30 years |
| Permits & placement | Fund manages permitting, installs utility hookups, and places ADU |
| Ownership | Fund retains ownership of the ADU and rights to rental income |
| Revenue Stream | Amount |
|---|---|
| Rent from ADU | $1,850/month (typical for 1-bed ADU in CA/urban markets) |
| Homeowner ground lease payout | $350/month base + 10% of gross rent = $530/month total |
| Net to Fund | ~$1,320/month before property management and ops |
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After lease term, ADU may:
- Be removed and relocated by the fund
- Be sold to homeowner at depreciated cost or residual value
- Convert into shared ownership structure through tokenized asset distribution (if allowed)
Assumptions:
- ADU Cost (delivered & installed): $85,000
- Monthly Rent: $1,850
- Homeowner Payout: $530
- Fund Net: $1,320/month
- Annual NOI (before fund ops/PM fees): ~$15,840
- ROI Year 1 (unleveraged): 18.6%
- Breakeven: ~5.5 years
If financed with 60% LTV (at 7%):
- Debt service: ~$4,300/year
- Cash-on-cash yield: 25%+
| Income Stream | Amount |
|---|---|
| Ground Lease (Base) | $4,200/year |
| 10% of Rents (Royalty) | ~$2,220/year |
| Total Annual Passive Income | ~$6,420/year for unused backyard |
Plus:
- Increased property value due to added unit
- No out-of-pocket costs for construction
- Can exit or extend lease with optional buyout/flexibility
- Lower capital requirements per unit compared to full land+structure developments
- Faster deployment (~30–90 days from permit to placement)
- Access to dense, high-demand urban rental markets
- Allows the fund to scale rapidly while diversifying income
- California (Senate Bills 9 & 13, and AB 68) has strongly deregulated ADU placement on residential parcels.
- Cities like Los Angeles, San Diego, Portland, Austin, and Seattle have fast-track ADU programs.
- Many programs allow pre-approved modular builders, reducing regulatory friction.
This aligns the fund with public policy, ESG goals, and investor mandates for sustainable housing solutions.
By pairing our long-term land/community developments with infill ADU deployment, the fund creates two income engines:
- High-yield near-term cash flow (ADUs and modular infill)
- Long-term capital appreciation (planned communities with infrastructure control)
Both support the growth of the fund’s NAV and creates cashflow for dividend sustainability.
We partner with vetted modular, tiny, and manufactured home builders to increase housing supply and affordability within these communities. These home types are in high demand but are often excluded from traditional lending programs due to:
- Limited Fannie/Freddie conforming support
- Unconventional appraisals or valuation methods
- Perceived asset depreciation vs. appreciation dynamics
This creates a financing gap, which our fund directly addresses.
To serve this unmet market demand, the fund also operates as a direct lender or underwriter for homebuyers purchasing tiny (ADUs), modular or manufactured homes in our communities.
We offer:
- Flexible financing options backed by fund assets and token-based liquidity
- Terms that align with the buyer’s income and local affordability
- Security instruments backed by the home and underlying land lease or deeded lot
This model gives the fund control over two of the three key elements of home construction:
- The Land
- The Financing
- (Not the raw materials, but we partner with trusted builders)
By controlling land and lending, we reduce buyer friction, unlock new value, and generate an additional stream of secured income for the fund.
As our land and home assets appreciate, the fund can strategically leverage the increased NAV to:
- Secure asset-backed financing to reinvest in new communities or acquisitions
- Recycle equity into higher-yielding projects
- Expand our lending capacity for future buyers or infrastructure
- Facilitate token buybacks or special dividends to reward LPs and stabilize the token peg
Appreciation is not just a gain on paper — it becomes a tool for controlled and compounding fund growth.
Our strategy allows us to create value not only by buying and holding but by building, financing, and enabling entire communities to flourish. We believe this model:
- De-risks each investment through infrastructure control and planned growth
- Captures developer margin while still operating under a REIT structure
- Provides social and economic impact by addressing affordability and financing gaps
Ultimately, this structure produces dividends from rent, loan income, and appreciation, while using blockchain-enabled liquidity and transparency to modernize the real estate investment experience.
This is a new generation of private REIT — one that keeps the time-tested benefits of real estate investing but adds modern, digital efficiencies that solve legacy problems.
- Stable, tax-advantaged income from dividends & capital appreciation
- Investors gain passive income, long-term appreciation, and enhanced liquidity.
- Property owners get a tax-efficient path into a diversified REIT portfolio.
- The GP remains aligned through “skin in the game” and performance-based compensation.
- Blockchain brings transparency, faster execution, and simplified ownership tracking.
It’s still Real Estate. It’s still a REIT. It’s just faster, smarter, and built on real value