What RealNOI does
We enable investors to purchase the future rental incomes.
We transform stable, recurring revenue streams into high-quality financial instruments. Leveraging advanced modeling and data analytics to create innovative investments backed by real, predictable income.
We focus on cash-flow
Why Focus on Cashflow and not on Brick and Mortar?
It’s a very good question and one of the first we get. Most people don’t understand the nuts and bolts of a Mortgage so here is our attempt to explain and answer the question.
When mortgage banks review the viability of a mortgage, they look for the following:
They look to have a physical asset that they can take and resell if the loan goes bad.
They make sure that any income from the underlying property can also be taken.
They look for corporate or personal guarantees for the loan amount.
Now let’s talk about what happens in real life, when a mortgage goes bad.
Foreclosing on a property can take years, and while you are in the process you have to reserve money from your balance sheet against the bad loan. Most lenders sell bad loans at steep discounts because it’s just not worth the effort. Most borrowers default because of issues that are not connected to the property. So the underlying rental income from the property is still there.
The underlying rental stream is the basis for the value of the property and provides the funds to pay back debt. So it’s the most stable part of the project. When a bank lends money they put a lien against the rental income. When a loan goes bad the owners typically declare bankruptcy and the rental stream gets listed down as an asset that is now involved in the bankruptcy. The lender must enforce its lien and make a claim on that asset. That involves lawyers and courts and takes time. And you may not be successful.
We focus on cash-flow
The RealNOI method is simply better!
We purchase 20 years of rental income right up front. Our investors own it. So the property owner cannot put into bankruptcy or try and redirect it somewhere else. It ours. If you want it back you can repurchase it. Otherwise, for the duration of our agreement, as an owner, you have no rights to it.
We fund more money upfront. A lender will only fund a portion of the value of the property. And they have other requirements that limit the amount that they will fund, like debt service coverage ratios. We purchase the future rental income, with all of its increases and vacancies. We have a model which we run to determine what the most likely case is for rental income over the next 20 years. We take into account the possibilities that people won’t pay, or that the unit may be renovated, or that renters will pay more because rents go up, and so do expenses so we account for that. When we are done with our model we calculate a reasonable return for the investor, anywhere from 5% to 7% and we use it to make an offer. Our offers are typically about 35% more than you would get on a conventional loan.
We make the proceeds available to everyone, not just a select few. Our platform allows investors to get the benefit of one of the most stable investment classes, a class that traditionally has a minimum buy-in of $1MM, for just as little as $100.
Currently, only 155,000 investors are involved in a $7 Trillion dollar market. They all have big balance sheets. They make billions of dollars by keeping individual investors away from the real estate finance market. But use the money you put into a bank, so you are really lending the bank money, it’s actually listed down as a liability on their balance sheet. They pay you virtually nothing to use your money, and they in turn purchase mortgages with your money. Those mortgages yield 5% so they earn as much as 5% profit on your money while paying you virtually noting. That is banking.
With RealNOI you pocket the profits the bank normally reserves for themselves.
Because we do each rental stream independently and create $100 pieces, investors can diversify risk better. I can buy 25 pieces of rental streams from buildings in dozen of markets, in any currency so that I don’t have to worry about one market changing. Investors can diversify their risk.
The RealNOI difference
We approach real estate investing differently than how others do.
RealNOI differentiates itself from other platforms in several key ways, particularly in how it approaches real estate investment.
Tokenization of Rental Income Streams
RealNOI.io innovates by allowing investors to purchase future rental incomes from properties listed on their platform. Instead of buying the property outright or traditional shares in a REIT, investors can acquire tokens representing specific rental streams, net of property expenses. This approach democratizes access to real estate income without the need for direct property ownership.
Focus on Cash Flow Stability
The platform emphasizes the stability provided by diversified cash flow streams from multiple properties. By investing in the income rather than the property itself, RealNOI mitigates risks associated with property value depreciation, offering a more predictable income stream based on rental agreements. Their model leverages over 30 years of property financial data to calculate future rent and expenses, aiming for a stable and sustainable investment return.
Use of Blockchain and Tokenization
In partnership with Chintai Nexus, RealNOI has launched a tokenized real estate platform that converts traditional real estate cash flows into digital assets. This not only provides liquidity and accessibility but also ensures transparency and compliance through blockchain technology. This integration of DeFi (Decentralized Finance) principles into real estate allows for international investment participation and potentially reduces costs associated with traditional real estate transactions.
Inclusivity and Global Access
RealNOI aims to remove barriers to entry for real estate investment by enabling global investors to participate in U.S. real estate markets without the constraints of traditional ownership restrictions. The platform uses a model where the focus is on the “use” of assets rather than ownership, which aligns with the global trend of making investment opportunities more inclusive.
Portfolio Diversification
By offering investments in micro cash flow streams from various properties, RealNOI encourages portfolio diversification. This can lead to higher risk-adjusted returns as individual micro-investments can be combined to form a more resilient overall investment portfolio. The platform’s structure allows for scalability, where investors can incrementally increase their exposure to successful cash flows.
Proprietary Algorithm for Financial Projections
RealNOI employs a proprietary algorithm for predicting future rents and expenses, which is developed from extensive historical data. This analytical approach helps in providing more accurate projections, thereby enhancing investor confidence in the platform’s offerings.
Property Qualifications
Analytics and Experience ensures that only quality RentStreams are listed.
Our underwriting models are complex and are focues on reliable preditable cashflow. Each submitted property must meet strict requirement and terms must be agree to prior to listing a property on RealNoi.
Monthly rental amount
A property must have an history of receiving rent payment for rentable unit in the amount of no less than $1,000 per month, and no more than $4,000 per month, in order to be considered for listing.
Property management
A must me managed by a 3rd party property manager who has been approved by RealNOI, who has extensive property management experience, understands the local markets and uses the lockbox process to collect rents.
Demographic Evaluation
We look for properties with 100+ units in secondary markets.
Market Value Analysis
We use a proprietary algorithm to forecast future income and expenses based a historical analysis. Our modeling evaluates rent adjustments, population, industry, maintenance, catastrophic events, and insurance factorks, amongs many others.
Market size
The Multi-Family Commerical Financing Market is huge.
The United States generates over $700 Billion in rent a year. Europe is similar. Asia is four times as big. Add them together and you have about over $2 Trillion in available rental streams.
Since our product is a 20-year product, it brings the number we need to do that whole world down to $20 Trillion.
Redistribution of wealth
We empower the masses to take a bit out of banking profits!
RealNOI moves the hundreds of billions of dollars earn by the bank from this lukrative sector into the hands of the masses.
Who is the traditional investor
Who is the traditional Real Estate investor.
Pension Funds, Insurance companies, the government. It’s the safest place to put vast amounts of money. Most loans in real estate get the safest ratings from Rating Agencies like Moody’s.
Because its such a great investment, individuals are the last man on the totem pole when it comes to availability. In fact, just try and buy a commercial mortgage on your own… you can’t do it.
Reliable cash-flow - minimal risk
We calculate the future rent and expenses using a proprietary algorithm.
Property Owners view RealNOI as far superior financing vehicle compare to the traditional financing methods offers, so we get you access to great location, geographic diversification, growing markets, maintained properties, and performance history.
Each token represents a portion of rent generated by multifamily properties, providing consistent returns even in volatile markets.
Enjoy consistent 5% returns with the potential for additional performance bonuses when hold time benchmarks are met.
Unlike typical bonds where early refinancing or repayments disrupt investment timelines, RentStreams ensure consistent yields across the full term, minimizing reinvestment risks.
Although we strongly recommend to hold the RentStream tokens until the end of the 20 year term, especially considering that full ROI is achieved in year 12 and last 8 years of payments are 100% profit, it is not a requirement.
Liquidity can be had by either trading the held RentStream tokens on the secondary market place, or thru a buy-back by RealNOI.
By offering investments in micro cash flow streams from various properties, RealNOI encourages portfolio diversification. This can lead to higher risk-adjusted returns as individual micro-investments can be combined to form a more resilient overall investment portfolio.
The RealNOI platform’s structure allows for scalability, where investors can incrementally increase their exposure to successful cash flows.
RealNOI aims to remove barriers to entry for real estate investment by enabling global investors to participate in U.S. real estate markets without the constraints of traditional ownership restrictions.
The RealNOI platform uses a model where the focus is on the “use” of assets rather than ownership, which aligns with the global trend of making investment opportunities more inclusive.
The platform emphasizes the stability provided by diversified cash flow streams from multiple properties.
By investing in the income rather than the property itself, RealNOI mitigates risks associated with property value depreciation, offering a more predictable income stream based on rental agreements.
Our models leverage over 30 years of property financial data to calculate future rent and expenses, aiming for a stable and sustainable investment return.
The terminology we use
RealNOI terms.
LoanLord
In our world and on our platform, investors are called LoanLords. In the traditional world those investors would be LandLords, but we don’t work with land, or bricks or mortar. We deal in cash flow. When we make a loan to a property owner, we take all of the cash flow minus the expenses. That has its rewards and its risks. But our LoanLords know that we have priced out each loan in a safe secure way using methodologies that have been tested and back tested.
RentStream
A RentStream is a specific right to collect Rent from one individual apartment. Its the basis for valuation of our program. Each apartment is analyzed and a 20 year projected cash flow is created for it. We take into account, move in and move out months, vacancies, refits and renovation, repairs and maintenance. Plus we add in rental increases. So its a pretty complicated calculation, leading to a projection, resulting in a valuation.
Investment Risk
Investments always carry risks, including potential loss of principal. In tradtional multifamily lending the biggest risk to investors are changes in the Federal Reserve Rate, which changed the loan rates in the market. This results in change sin capitalization rates and before you know it, that $10 mm building is only worth $7mm. The underlying cash flow is still the same, just the way the value was calculated changed. Its unfair to investors and to owners, so we changed that and made it more stable. Please review all risk factors before investing.
Platform Usage
Users must adhere to our guidelines and refrain from any unauthorized activities on the platform.