Homebase paves new way to home ownership on Solana
TL;DR:
- Startup Homebase has tokenized its first single-family rental property in McAllen, Texas, on the Solana blockchain via a smart contract tied to an NFT created for the purpose, called “Homebase 1 [The Cardinal].”
- Homebase raised $246,800 in about two weeks from 38 participating investors, including 30 non-accredited investors, with the minimum investment for the sale reported to the SEC being $500.
- The tokenization was undertaken by Homebase, a crypto startup that spent seven months getting just the legal and compliance details of its real estate offering ready for the market.
The real estate industry has always been an attractive investment option for individuals with some extra cash to spare. However, the market has been out of reach for most due to high prices, leaving investors struggling to find alternatives. The advent of blockchain technology and the creation of non-fungible tokens (NFTs) has revolutionized the real estate investment industry. One startup, Homebase, has capitalized on this to tokenize its first single-family rental property in McAllen, Texas, on the Solana blockchain.
The tokenization was undertaken by Homebase, a crypto startup that spent seven months getting just the legal and compliance details of its real estate offering ready for the market. The total amount raised was $246,800 from 38 participating investors, including 30 non-accredited investors. The minimum investment for the sale reported to the SEC was $500. The tokenization, which supported USDC and ran on the Solana blockchain, was undertaken via a smart contract tied to an NFT created for the purpose, called “Homebase 1 [The Cardinal].”
Domingo Valadez, the company’s chief executive and one of three co-founders, spent about five years working for Google before leaving to start up Homebase with two additional co-founders in early 2022. Living in the pricey Bay Area, Valadez realized something: he “still couldn’t afford anything in the Bay Area after working at Google for five years.” Despite working tech hours and earning a tech salary, Valadez said buying a property at the time was out of the question. The US housing market has slowed in recent months, with some analysts eyeing an even more dramatic drop in residential and commercial property prices on the horizon.
Tokenizing real estate is a means of crowdfunding, Valadez said. Homebase aims to give more power to individuals when they truly have ownership around their assets. By tapping Solana and ensuring compliance with related SEC regulations, Homebase thinks it can provide a viable alternative, even with real estate prices where they are. The end goal is to create a product that makes money and helps homeowners, as well as investors, in the process.
Homebase essentially captures a spread on the transaction. The startup put in a small amount of its capital, which Valadez said was designed to ensure an alignment of financial interest. Backers can then freely buy and sell their Solana NFTs on the open market, and underlying smart contracts tie those transactions to their corresponding equity stakes in the home. Homebase’s second tokenized offering is already in the works.
