9 februari 2018

by Martin van der Linden

Looking at the past century, the way people in The Netherlands acquire their property has not been shifting much. Of course, in the nineties and the early 2000s we all were seduced with exotic financial products, but they were all based on mortgage. Other than in for example Germany, which has her own system to encourage home ownership, this is not stimulated in The Netherlands.

So basically, there are two ways to buy a house: with your own saved money, or with a mortgage (preferably backed with own money or security from parents).

Primary assumptions

At Walnut Ventures we wanted to developed an extra channel for acquiring property.

We researched to see if we could use an Initial Coin Offering (ICO) in a way that a potential home owner can profit from it. We looked into it from three perspectives:

./. It should be affordable and flexible to the potential home owner;

./. It should offer a profit, but also security to the investor;

./. It has to be a legal construction in The Netherlands.

From these point of view we found a way that is specifically regulated in The Netherlands, and looks a lot like Financial Lease. In Dutch it is called ‘Huurkoop’. Since this is not an easy term to pronounce, we use the slightly incorrect term ‘Lease’ in this brochure and all other documentation.

How does it work?

We check the potential home owner. Know your customer. We collect data that is also required when you apply for a mortgage. Why? Because we need to make sure that the lessee (the home owner) is legit and capable to pay the lease.

After establishing a complete and correct dossier we organize an ICO. We produce a whitepaper that gives a full insight on value of the property and the quality of the lessee. Based on the whitepaper we issue a specific token that covers value and acquisition costs of the property.

When the ICO succeeds, the tokens are issued by the Walnut Treasury Foundation, the foundation that Walnuts founded for issuing tokens and controlling and managing assets. Next, the Foundation buys the property.

The lessee closes an agreement with the Foundation, that acts as a Lessor for this agreement. When signing the agreement, the economic ownership shifts towards the lessee, so he can use the property. The legal ownership of the property stays with the foundation as a pledge to the tokens.

Schematically, it looks something like this:

The Asset Backed Tokens

The Tokens that are issued have the specific property they are issued for as pledge. Their value is established at the ICO. Every month, the interest is added to this value. The tokens will be entered onto exchanges, so they can be sold or bought.

The lessee pays on a regular bases an amount to the foundation, consisting of interest and redemption. The foundation uses this payment to buy back tokens. The foundation does this for ICO value and added interest.

When all tokens are bought back, the lease is finished and the legal ownership changes to the lessee. He now legally owns the property.

Selling the property when there are still outstanding tokens

When the lessee wishes to ’sell’ the property, an appraisal is made by a sworn in appraiser. In this way we can establish that the price that is offered for the property is correct and there is no attempt to disadvantage the tokens owners.

If the value of the property transcends the ICO Value, the profit is shared over all tokens. In this way, everyone profits from the raisen value and the selling transaction.

When the value is lower than at ICO, the lessee is obligated to buy the coins back at ICO value. In this way the investors in the tokens have a ground level.

Only when transactions are handeled in a proper way, the foundation hands over the legal ownership of the property.

Why invest in housing?

We believe that everyone that can reasonably afford it should own their own house. If we as a community can work something out that helps families to move to a surrounding where they can raise their children in a safe and responsible way, we at Walnut believe we should contribute.

Why lease your house?

Not everyones circumstances allow them to obtain a mortgage or have own money. We want to offer an extra channel to see if we can realize your dreams. Without loosing sight of the financials, but with reason. We are obliged to our investors to do so.

Interested in investing in an ICO?

We will be launching the first ICO soon. Please subscribe to our newsletter and checkout social media to keep informed. When we launch this ICO, please read the whitepaper carefully. If you have any questions, do not hesitate to ask.

Interested in leasing your house?

Please contact us, so we can inform you in detail.

Suggestions?

We would like to hear your comments, remarks, criticism. We believe we could learn from that. Please contact us on social media, telegram or by e-mail.